Commercial and residential real estate sectors are among the hardest hit industries as the world remains under restrictions due to the coronavirus pandemic. The impact was massive and widespread and caught everyone by surprise.
For instance, nowhere in the landlord-tenant agreements can you read guidelines on how to conduct oneself in case of crippling pandemics. However, property management services must take it upon themselves to adapt and introduce changes to limit exposure and protect both current and prospective tenants.
The pandemic grounded the world’s economy to a halt, even if the numbers have not yet reflected the long-term impact of COVID-19. According to the forecast published in April this year, the property management market is projected to hit $25.54 billion by the year 2025 from the $13.3 billion in 2017. Although the annual compound growth rate was estimated to be 8.5%, there should be some adjustments to the estimate considering how the real estate market was badly hit this year.
Property managers can immediately implement the following approaches:
- Social distancing during repairs/visits — The Canadian government continues to update guidelines and recommendations on how to deal with COVID-19. Property management services are actively working with health departments and government agencies to minimize transmission and slow down the spread of the virus. According to Health Canada, individuals should stay at least 2 meters/six feet away from others. Property supervisors or repair technicians should be oriented on this guideline to make sure they do not put themselves and others at risk.
- Protection of yourself and tradespeople — You can take advantage of technology to protect your people. For example, virtual tours are an excellent way to still show the available space without necessarily bringing interested clients to the property itself. Virtual tours can either be live or pre-recorded videos that are uploaded to your website or social media pages. Employees are also advised to wear face masks, particularly indoors. For instance, coughing will produce 3,000 droplets, and it only takes 1,000 droplets to infect someone. Screening protocols should also be enforced, particularly workers who live in COVID-19 hotspot areas. The maintenance manager can inspect the property via Zoom or Facebook Live to also minimize contact. Work-from-home arrangements will also ensure that non-essential employees do not need to be onsite. Again, this will lessen the number of people gathered together.
- Protection of the tenants — Distribute flyers or put up posters at strategic locations that can easily be read by tenants. The reading materials should contain new rules and guidelines amid the COVID-19. The safety rules should also include the property employees, the delivery staff, security personnel, and visitors. For instance, tenants may be instructed to limit the number of visitors until further notice. You should also install hand sanitizers and non-contact temperature scanners on entrances and high-traffic areas. Routinely disinfect and sanitize surfaces on bathrooms, elevators, door handles, HVAC, and the like. Digital contracts will also help protect both tenants and landlord and will allow you to stand out from the pack.
- Consideration of tenants’ financial situation — Property managers should also keep abreast of government programs. For example, PM Justin Trudeau announced the Canada Emergency Commercial Rent Assistance, which, among other things, covers 50 percent of the rent for up to three months for commercial property owners. However, there is no specific program designed for residential tenants. There is the Canada Emergency Relief Benefit that will grant $2,000 aid to workers impacted by COVID-19. Ultimately, renters would have to talk to the property manager or the landlord to delay payments if they can prove their troubled financial situation. Work out viable payment arrangements with your tenants that will be mutually beneficial to both parties. With regards to rent collection, online payments are the best option to avoid face-to-face interactions.
- 24/7 Emergency Response Service — Property managers should have installed a response system that can be activated at a moment’s notice. Make sure to conduct simulation exercises to perfect the system so that when the event occurs, the individuals on the front line are ready. One scenario you should be aware of is what happens when one of your tenants tests positive for COVID-19? What are the steps you need to undertake in terms of sanitation, coordination with healthcare personnel, and assuring the other tenants that their safety is not at risk? Also, tenants and employees should be oriented on informing the property manager when they are experiencing flu-like symptoms so they can undergo testing immediately.
- Create or Review Crisis Communication plan — A pandemic has all the characteristics of a crisis. The communication plan will guarantee that everybody is following the rulebook from the property manager, property supervisor, employees, tenants, and visitors. Everybody should know what to do to avert a crisis, manage a crisis, and make sure it does not happen again. For large businesses, a crisis communication plan is essential to manage bad PR. Your occupancy rate might be at risk if word gets out that your safety and control measures are not up to par, which contributed to an outbreak in your property. An effective strategy is not rooted in the post-event scenario but rather takes into account the proactive measures that prevent the event from occurring in the first place.
The property manager must not forget some of the more complicated aspects of management, such as making sure your insurance is up to date to factor in the epidemic, contractual obligations, risk assessment analysis, or quarantine protocols.
Although the future is not clear with regards to the vaccine for COVID-19, it is not good business to operate under a cloud of pessimism. When the world survives the pandemic, some of these strategies and approaches can continue to be adopted as best practices for property managers. For real estate investors, adopting all the protocols and measures under the new normal can be a headache. That is why it is crucial to hire property management services with all the necessary systems in place.