November 13, 2024
4
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How to document evidence of rule violations in multifamily buildings
Discover the most common lease violations and how to log them in our step-by-step guide.
By
Celeste Rivas
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Residential Rentals
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“Remote work has hit. If you haven’t figured out how to adapt yet, you’re behind the ball.”
That’s what CEO of Coastline Equity and author of the upcoming book Property management excellence, Anthony A. Luna said when we spoke to him about the impact of remote work on real estate. And it’s true—as increasing numbers of people work from home, resident preferences and investment trends are hugely impacted.
To attract residents and protect investments, understanding these changes is crucial. And that’s why, in this article, we look at the challenges of remote work for investors and how you can overcome them.
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According to the U.S. Survey of Working Arrangements and Attitudes (SWAA) conducted in January 2023, over 42% of American employees now work remotely at least some of the time.
In this section, we take a closer look at this trend and explore the reasons why more people are embracing this new way of working.
SWAA data shows that the pandemic boosted “working from home” in a way that was equivalent to 40 years of pre-pandemic growth. And this lifestyle shift has not gone away since, nor does it seem to be going away in the future.
In a study by Buffer, 98% of employees reported a desire to work remotely at least part of the time for the rest of their lives. Meanwhile, over 60% of people would trade higher pay for better work-life balance, according to research from Flexjobs.
COVID-19 led to a huge uptick in remote work, but it’s not the only cause. Other factors behind the increase in remote and hybrid work include:
As Coastline Equity’s Luna says, “The rise of remote work means that people are now at home for entire days. This has definitely influenced what they look for when hunting for a new property.” Below, we look at how.
With no need to commute to the office, residents are looking to find the amenities they would usually seek in the city or local neighborhood at home. This means gyms, cafes, and work environments are more important, particularly in multifamily buildings.
What’s more, as Luna says, “A growing number of residents are looking for indoor-outdoor spaces. When they’re staring at screens every day, they want to be able to get some air.”
Residents who work from home are also looking for ways to make their lives more convenient. This could mean shared community spaces for quick moments of connection or local services for grocery delivery, laundry, and pet care.
“When they’re spending more time in them, people want bigger, better apartments,” Luna says. Residents who work remotely are increasingly looking for more space—a home office to work from, a large living space to relax in, and a yard to stretch their legs.
On the flip side, some residents are looking for spaces that are not necessarily larger, but more functional, with rooms where they can work, eat, and relax. For example, a living space with an optimized work setup could include a comfortable desk, good lighting, and easy access to other parts of the home.
As Luna describes, “More and more people want to move to rural areas and resort towns to get more value out of their city salaries as they work from home.” As a result, these areas are becoming increasingly popular.
The prices of houses in rural areas are rising as a result of the increased demand from remote workers. General trends and Redfin data reveal places like Napa Valley (California), Jackson Hole (Wyoming), and Big Sky (Montana) are some of the most expensive rural housing markets in 2024.
At the same time, the real estate industry has had to adapt to residents who are moving areas and want to view properties remotely. Virtual tours are on the rise, allowing prospective tenants to get a realistic sense of the property's layout, size, and features without the need for an in-person visit.
As a result of the rise of remote work, technology is becoming a more prominent trend for real estate professionals. As Luna highlights, “There’s an extensive tech stack that’s required for remote real estate jobs and, with the rise of digital nomads who work remotely and stay in their apartments only for short periods of time, there’s also increased importance for security tech and thermostats.”
Pro-tip: Use Minut to give remote workers peace of mind. The sensor acts as both a home alarm and thermostat, continually monitoring motion and humidity changes—while safeguarding tenant privacy.
Let's explore some of the challenges you might encounter as an investor due to the shift to remote work.
Alongside regional disparities in demand, prices continue to rise generally across the housing market. In Luna’s words, “The cost of entry to buy a home is rising, so people are looking to rent. But throughout the COVID-19 years, building slowed down significantly.”
The result is increased competition in investment and volatile real estate sales. Investors and property managers should prioritize understanding local market dynamics and be prepared to adjust pricing strategies.
To attract a steady stream of buyers, you need to invest in amenities that reflect remote workers’ needs and desires. Luna suggests the following:
It’s also essential to research the demographics of people buying in your area, as the rise of remote work means that these can rapidly change.
As more people work from home, local zoning laws may need to be revisited. Properties may require adjustments or permissions to allow for home offices or shared workspaces. Additionally, changes in property usage, such as converting residential spaces into workspaces, might affect property tax assessments.
Remote workers can cause property damage. “With more property use comes more wear and tear,” explains Luna. From the effects of everyday use, like scuffed floors and faded paint to unlikely issues like cigarette smoke and pet damage, increased occupancy can lead to a wide range of maintenance challenges.
You can help prevent property damage using Minut’s cigarette smoke and noise detector. The device can detect cigarette smoke in real-time, allowing you to respond quickly if smoking occurs where it's not permitted. This can help prevent damage from smoke residue, which can stain walls and ceilings, and create unpleasant odors. In addition, when the noise threshold is exceeded, you get instantly alerted. This allows for prompt intervention to address noise issues before they escalate.
With documented proof of disturbances or violations, you can better safeguard your investments and hold tenants accountable.
As companies look to define the future of work, the future of residential real estate is unavoidably called into question, too. When working from home more often, resident priorities and needs change. For example, they seek amenities like offices and gyms, more space, and greener landscapes.
This means, to attract residents and protect investments as more people switch to remote work, you need to stay on top of:
With these strategies in place, you can confidently navigate the evolving real estate landscape and ensure your investments remain resilient. Plus, with Minut's monitoring solution, you can safeguard your properties from afar. This keeps them secure and well-maintained, no matter how residents choose to work and live.
Full-time remote work has significantly shifted residential preferences, with more people seeking homes that offer dedicated office spaces, larger living areas, and amenities like gyms and outdoor spaces. That's why real estate analysts report that suburban living is also becoming more popular—regardless of the abundance of job postings.
As commuting becomes less of a priority, many are moving to rural areas and smaller towns where they can enjoy a better quality of life while still maintaining their urban salaries. Real estate agents should capitalize on this shift, which has driven up property prices in these areas and led to increased demand for properties that cater to remote work lifestyles.
The rise of remote work has reduced the demand for traditional office spaces, leading to a decline in commercial real estate occupancy rates, particularly in urban centers like New York. This shift is forcing the commercial real estate market to adapt, impacting brokerages and real estate transactions. For example, some properties might be repurposed for alternative uses like residential conversions or co-working spaces.
