Co-Founder & CEO of PlanOmatic.
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The pandemic sent the single-family rental (SFR) market into overdrive in 2020 as many consumers sought out larger homes in suburban areas with more space. Despite the current recession, U.S. single-family rent growth quickened in April 2021, increasing 5.3% year over year, and rising from a 2.4% increase in April 2020, according to the CoreLogic Single-Family Rent Index (SFRI).
As the hunger for SFR homes continues, more and more investors are entering the space and looking to capitalize on the red-hot market. With increased competition and limited housing inventory today, investors must move quickly and efficiently to acquire SFR properties while also increasing their rental portfolio return on investment. By leveraging 3D virtual tour technology, SFR investors can speed up the due diligence process to acquire properties faster and can better market the homes online to attract consumers and accelerate leasing efforts.
In my line of work, I’ve seen firsthand how leveraging 3D virtual tour technology enables SFR investors to remotely analyze properties and scale their portfolios nationwide with greater speed and accuracy. Here’s how SFR investors, owners and operators can utilize 3D virtual tours to acquire and lease properties faster.
Virtually Inspect Properties
A 3D virtual tour is a great tool for SFR investors that do not have the time or resources to physically visit a rental property to conduct due diligence before acquiring it. A third-party vendor can quickly create a 3D tour of both the outside and inside of the property so that an investor can virtually explore the home in a real-life way and get a clear visualization of the space.
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Investors can view the layout and condition of the property remotely and identify key issues from a holistic view. Do the kitchen cabinets and counters need to be replaced? Does the home need new wood flooring? Does the front yard need to be enhanced to add more curb appeal? Both aesthetic and functional renovations can be identified through a 3D tour as part of the due diligence process.
Inform Renovation Costs
SFR investors are often faced with some level of renovation to bring a SFR property to market. By leveraging 3D tour technology during the renovation process, a property’s spatial dimensions and floor area can be determined. The measurement tool within the 3D scan can be utilized to obtain measurements that might otherwise be missed in a stand floor plan and these can better inform renovation decisions. For example, you can measure the distance from the top of the kitchen counters to the ceiling, the exact height of a kitchen island, the distance from the edge of a doorway to a new center point you’d like to add, or the width and height of appliances.
The ability to measure individual rooms, spaces, windows and doors also helps investors determine specific material needs. These measurements create data and actionable insight so that materials can be more accurately bid out to determine the best contractor for the project. This can also reduce the chances of change orders with contractors in the future.
Accelerate Leasing Efforts
Most house hunters start their property searches online today and digital tools such as a 3D virtual tour make viewing a rental home remotely even faster and easier. Whether from a smartphone or laptop, 3D tours allow consumers to get a realistic experience and feel for what the property is like without having to visit it in person first. Many consumers are drawn to the immersive experience of 3D tours, and according to a study conducted by Zumper and Matterport, more than 70% of renters would lease an apartment sight-unseen thanks to 3D virtual tours.
My company recently measured the impact of 3D tours on SFR property marketing and found that property leads increased by 25% and days on the market decreased by 23% when a 3D tour was used to market a property, compared to properties only marketed using professional photography. The data from our test shows that SFR properties that are marketed with 3D tours online result in increased consumer leads and fewer days on the market. Consumers are demanding 3D experiences online and prioritizing properties with 3D assets.
Investors that choose to utilize 3D tours to help market their properties should keep the following tips in mind when preparing rental homes for the photos. First, the home should be properly staged. Declutter the space and remove any personal items, such as family photos and pet items. Buyers like to imagine the home as their own, so it’s better to remove items that might be distracting or negatively influence the audience. Don’t forget to clean out the closets and organize storage spaces.
Second, give the home a deep clean. Consider buffing kitchen countertops, polishing stainless steel appliances and cleaning the windows inside and out to remove dirt and smudges. Lastly, create bright and consistent lighting throughout each room to help the space feel bigger and more visually appealing. Make sure all lighting fixtures have bulbs and are working properly; also consider using bulbs with the same type of color and warmth in each fixture to create consistency. By taking these extra steps, SFR investors will be able to showcase their properties in the best possible way during 3D virtual tours.
SFR investors, owners and operators who choose to embrace 3D tour technology will reap various benefits, from increased operational efficiencies to help scale their portfolios nationwide to effective online marketing of SFR properties to increase consumer leads and accelerate overall leasing efforts.
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