If you just looked at it from a strictly financial standpoint, you’d conclude that landlords have little reason to improve loyalty with their tenants.
After all, rents for homes and apartments actually increased by 2.8% in this year’s first quarter as occupancy rates rose to 95.5%.
Here’s the thing. The first few months of this year were basically a disaster, but savvy landlords know that things can turn at any moment. The fact is, we may see a softening in the months ahead.
In other words, this is the time for landlords to get proactive.
And that’s just where Modern Message comes into play. This is a sleek online and mobile app that landlords use to build customer loyalty.
It already serves an amazing 1.8 million residents in more than 5,000 communities in all but one U.S. state.
The Virtual Neighborhood
Now then, there’s just no doubt we are headed into a recession. And by all accounts, it could be a tough one.
In February we had an unemployment rate of about 3.5%, the best since 1969. But in the last two months, as many as a record 30 million Americans have filed for unemployment, with a rate now at roughly 14.7%.
And while jobless figures have really improved of late, they are still the kinds of numbers that make rental owners and managers nervous.
If they need to evict a tenant for unpaid rent, it could take a while to find someone else who has a good job and the ability to sign a lease, not to mention come up with a security deposit.
Turns out, the founders of Modern Message weren’t really worried about that when they founded the firm back in 2012. The idea was to create a loyalty program for student housing.
Flash forward to today and you see that the business now counts dozens of major home and apartment rental clients all over the country.
In fact, Modern Message is now used by more than half of the country’s top 50 apartment managers, as rated by the National Multifamily Housing Council.
And it’s no wonder because Modern Message engages residents in the comings and goings of their building through a fully interactive and mobile user interface.
With fun activities like virtual cooking classes, online contests, or volunteer programs, Modern Message builds loyalty and binds the residents of an apartment complex together.
The platform also offers rewards for participating that can be exchanged at Amazon, Target, or Best Buy, boosting resident loyalty.
One recent program offered reward points for a virtual art class led by another resident, with canvases distributed to the doors of those who signed up. You can see how this would work to create a community.
Giving out some small rewards is nothing, compared to the benefits. Apartment managers who use Modern Message see fewer residents move out – and more referrals, cutting down the cost of filling empty apartments.
A Savvy Cloud Play
The company behind Modern Message is RealPage Inc. (RP), which acquired the engagement platform earlier this year for an undisclosed sum.
That’s long been RealPage’s very successful strategy: grow and strengthen the firm’s portfolio of products and services for apartment managers through bolt-on acquisitions.
Quite a few of them, in fact.
Since mid-2002, RealPage has acquired more than 45 companies in the apartment analytics and digital services space, all complementing with and expanding the firm’s capabilities.
Any problems with the wider economy seem to already have passed the company by. RealPage has already recovered to a price near its all-time high, while web traffic is higher than before.
Not to mention that total revenue for the most recent quarter was up 18% from a year before.
The company operates here in North America, as well as in Europe and Asia, serving more than 12,200 clients across the globe.
It offers apartment managers digital services that can do everything from screening rental applicants to handling online rent payments.
It features engagement platforms for current residents, including Modern Message, and even marketing and analytics tools to help acquire new renters as efficiently as possible.
And it couldn’t be offering this at a better time. With a deep recession looming, good tenants may soon be scarce.
Even though RealPage reports slightly higher rental occupancy this past quarter, at 95.8%, than a year prior, at 95.4%, rent growth is slowing.
Rents rose 2.8% in the first three months of the year, down from 3.3% in the first quarter of 2019.
With these headwinds coming, landlords are already looking to boost loyalty and increase referrals to prepare for leaner times.
RealPage’s many services, including the reward and engagement platform Modern Message, is a perfect solution.
Over the past three years, RealPage has grown its earnings per share by 34%. At that rate, the firm is on pace to double in price in just 21 months.
But with the economy slowing, let’s be conservative and project a double in three years.
With the need for online services in real estate and elsewhere only going up in the future, RealPage is the tech leader you can count on to grow your wealth.
It’s a great example of how innovative breakthroughs are invigorating the age-old industry of real-estate. In a recession especially, real estate needs an extra edge to really maximize its moneymaking potential.
And the kind of digital innovation that RealPage brings to the table can give that high-tech advantage basically anywhere.
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Cheers and good investing,
Michael A. Robinson