Back in 2020, nobody could have imagined how COVID-19 would affect the way people work, live, and carry out their day-to-day lives. In a matter of weeks, the world around us changed in indescribable and massive ways. Even in a bustling metropolis like New York City, people no longer have the ability to meet up, socialize, shop, work, or dine the way they could before.
The new world we live in involves office closures, cautious travel, and mandates that require employees to work from home. Rather than heading out to eat at restaurants or traveling across the globe, people are now watching their bank accounts much more closely. Spending is going to the essentials, and even how we acquire those things has changed in tremendous ways. Online ordering and delivery are both experiencing vast amounts of popularity.
For those who offer residential rentals, the business landscape has also changed in ways that can’t be ignored. Fewer tenants, dropping rental prices, and the new normal has made the job harder than it ever was before coronavirus. That doesn’t mean that there’s no way to succeed – there is. Those who are successful will be those who work hard and take advantage of strategic marketing that is known to work.
The Effect of Coronavirus on Commercial Business
If you live, work, or spend much time in New York City, you likely already know that the streets don’t look the same today as they did a year ago. Even in areas that boast some of the most expensive real estate around the globe, like the heart of Manhattan, coronavirus has had an alarming effect. Someone walking down the street can expect to see tons of vacant commercial businesses even a year after the pandemic started to wreak havoc on the city (and the entire world).
An example of this can be found on Fifth Avenue’s popular and acclaimed location between 42nd and 58th streets. Based on recent surveys, about a quarter of the storefronts in that area are closed and no longer available for business. This is a considerable change from the constant movement in the area by customers heading into shops to enjoy high-end shopping experiences. What was once a space filled with traffic is now closer to a ghost town.
Not all of these businesses are for lease and out of the running forever, but it still establishes a vision that is far from what you expect of the city’s hottest spots. Some companies, like Tiffany and Co, plan to come back to their location later in 2021. Other storefronts are being leased by new clients who believe that better days are coming soon. However, some blocks are rather bleak, and the future seems uncertain. Nobody knows precisely how this will pan out in the future, but we do know that it’s creating new problems for landlords and property managers.
How Change to Commercial Businesses Affects Rentals in NYC
With more businesses closing locations in popular areas of the city, it has created difficulties for those who rent residential buildings. The enormous numbers of discounts and vacancies have attracted renters to neighborhoods in boroughs they may have never lived in before. However, even dropping prices haven’t stopped the evictions that have rolled through the city, especially for those considered most vulnerable.
Based on an article from the New York Times, Manhattan rental prices dropped from a median of $3,509 a month in March to $2,776 in November of 2020. This unbelievable drop is a 12.7% decrease in prices compared to the year before. It also happens to be the most significant price drop that has been seen in Manhattan since the Great Recession, which had prices that dropped about 10%.
The lack of commercial businesses has also created declines in other boroughs of the city. For instance, Queens and Brooklyn saw decreases of about 6% to $2,100 and $2,400 respectively, compared to the same time the year before. While data is not as clear on the Bronx and Staten Island, both areas have also experienced decreased rental prices to get people in so landlords and management companies can stay in business.
As someone who rents out residential properties, this can create a lot of stress. It might make you wonder what kind of options you have to bring in new residents until the consequences of COVID-19 are no longer widespread. The reality is that even with mass vaccination becoming an option, rent may remain lower than it was before coronavirus hit the streets. But this isn’t the only solution to staying in business. If lowering rental prices is only part of your strategy, or you want to try other options, we’ll share some solutions later in this article.
The Current Challenge with Residential Rentals
Over the last several years, real estate investment has been an excellent source of returns and cash flow. With only a small amount of additional risk, a person could move into the rental sector and gain more money than doing other things like dabbling in corporate debt. However, the outbreak of coronavirus has changed reality and turned it on its head. Real estate players at all levels have experienced hardships that would have been unbelievable a couple of years ago.
People who provide services are still working to ensure they can mitigate health risks for their customers and employees. Developers often can’t get access to permits, and even if they do, there are significant construction delays in bringing projects from dreams into reality. Simultaneously, residential building operators and owners are dealing with reduced income and have concerns about how tenants will make their rental payments every month.
Those who own and operate real estate in the boroughs of NYC need to be aware of long-term effects that may be in place due to coronavirus, even after the virus is less of a concern than it is today. Every landlord needs to be prepared for the downturn’s effects, especially when residents ask for rental abatement and concessions. Someone who rents out several businesses can choose to implement the same process in each building, but considerations need to be made regarding residents’ well-being and safety.
How Digital Solutions Can Revolutionize the Rental Market
Before COVID-19 was a word on everyone’s lips, the real estate industry was already making significant moves into offering digital services and processes for tenants. With the new normal, including the lockdown of physical spaces and social distancing, this has become even more important. Digital processes that offer exceptional customer experience are crucial for landlords and building owners who want to succeed in 2021.
Some of the most common usages of digital solutions for rentals include virtual showings and open houses, virtual and augmented reality, and targeted omnichannel sales. Each of these options can make it easier for a potential resident to find a suitable space. If you’re offering rentals, being on the cutting edge of this kind of technology could make the difference between succeeding and failing, with the pandemic still making changes around us.
However, some additional products and services can help NYC property owners ensure they make it through the months ahead of them. One of those is a digital resident referral program, like the one offered through Cityhive. While you might be aware of referral programs for companies like banks, retail stores, and service providers, this is an option specifically for those who offer homes for those who work and live in New York City.
Why Use a Resident Referral Program
We’ve talked about how COVID-19 has changed the landscape of commercial business. Tons of stores are closed, and many employees are working from home. People have lost their jobs and may be struggling to make ends meet. This has led to decreases in rental prices by property owners looking to ensure their units are filled. It’s a frustrating and confusing time for landlords and property managers, but there are ways to stay ahead of the pack.
A resident referral program is a system that offers incentives for people who move into your apartments or condos. It also features rewards for current tenants who convince someone else to move into your building. With incentives and discounts becoming a common way to fill housing in New York City right now, this is one of the best options out there.
The incentives can range from rent discounts to cash bonuses or other prizes that current and potential tenants will appreciate. It’s entirely up to you what kind of incentives are in place, and you can base that on what residents, for a specific building, are most likely to value.
Digital solutions for the issues we can be facing have become the go-to. People are doing more of their daily tasks online than ever before because it adds safety and security to their routines. With Cityhive, both you and your residents can take advantage of great solutions when it comes to making referrals, redeeming incentives, and ultimately filling units faster.
So how does it work? It’s an easy process. Cityhive offers an online platform that lets a landlord or building manager do the following things:
- Choose and implement incentives
- Register vacancies in a building
- Notify current residents about an opening
- Get referrals to fill a unit that is currently vacant
- Manage leads to bring in new tenants
The way Cityhive performs is by letting you register your building’s vacancies. The platform will then notify all of the existing tenants about the opening. The people who are making successful referrals can easily track their incentives. If they refer someone who moves in, they could get gift cards, money, discounts, or other rewards.
Since this program is online, it’s available at all times of the day, every single day of the week. Cityhive can be accessed from any device to make changes or check on things. The property manager can update vacancies, reward residents, and look at current referrals from any location. Cityhive also lets you access a leads database to add even more convenience to your day. It’s all digital, and it’s all tailored to your needs to get in tenants any time someone moves out of your property.
Succeed as a Building Manager in 2021
One of the new realities associated with the coronavirus pandemic is that commercial businesses are struggling. With far fewer stores open in large cities, such as New York City, the effect goes beyond the commercial world. It can also make it more challenging to bring in new tenants in residential buildings. Landlords and business managers across the five boroughs are looking for new solutions to keep afloat.
Cityhive is an easy-to-use platform for landlords and management companies that can ensure your vacancies get filled quickly and without doing extra work. As cutting-edge technology for residential property managers, Cityhive offers total control over incentive options, instant tenant notifications, and 24/7 account management. It takes the traditional resident referral program and adds a modern twist that current tenants, potential renters, and landlords can benefit from.
Curious to learn more about Cityhive and how it can help you specifically? We’d be happy to answer all your questions and share the information you need to make the right decision. You can send in a message on our website to learn more. You can also reach us by phone at 347-630-5970. Get in touch today and start implementing a resident referral program to get you through the coming months!Back to Blog