the situation room: how property managers can prepare for an unpredictable future

2017 © AppFolio, Inc. Confidential.

2017 © AppFolio, Inc. Confidential.

The Situation RoomHow Property Managers Can Prepare for an Unpredictable Future

Nat Kunes, VP ProductAppFolio Inc.

2017 © AppFolio, Inc. Confidential.

Join Us Online - #AppFolioChat

facebook.com/AppFolio

Follow Us @AppFolio

Follow Us – AppFolio

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• Property management and accounting• Online rent collection (free)• Prospect / guest card tracking• Vacancy Marketing• Websites• Online applications & leases• Resident Screening• Mobile Inspections

… So You Run A More Successful Business

Web-Based Property Management Software

@AppFolio #AppFolioChat

AppFolio

2017 © AppFolio, Inc. Confidential.

The Situation RoomHow Property Managers Can Prepare for an Unpredictable Future

Nat Kunes, VP ProductAppFolio Inc.

2017 © AppFolio, Inc. Confidential.#iheartappfolio

2017 Predictions

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Mixed Portfolios

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Leasing

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Poll #1How Different Do You Expect Leasing Activity To Be in

2017?

a) Significantly Strongerb) Slightly Strongerc) About The Samed) Slower

2017 © AppFolio, Inc. Confidential.#iheartappfolio Market Update

2017 © AppFolio, Inc. Confidential.#iheartappfolio

122,753,277 Units

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Market SplitResidential:

46,030,000 (37%)

Commercial:50,523,277 (41%)

HOA:26,200,000 (22%)

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46,030,000 Residential Units

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Breakdown

MFR:18,412,000 (40%)

SFR:23,935,600 (52%)

2-4 Units:3,682,400 (8%)

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50,523,277 Commercial Units

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Breakdown

Office: 42%

Industrial: 25%

Retail: 33%

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26,200,000 HOA Units

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Existing hoa market

42%

55%

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Poll #2How Many Different Property Types (SFR, MFR, Student,

HOA, Commercial, etc) Do You Manage?

a) Oneb) Twoc) Threed) Four Or More

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Recent Trends

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90.00%

91.00%

92.00%

93.00%

94.00%

95.00%

96.00%

2008 2009 2010 2011 2012 2013 2014 2015 2016

Occupancy Rates

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0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

2010 2011 2012 2013 2014 2015 2016

YTD Effective Rent Growth

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Tax Benefits of Owning

$5,852

($3,890)

-$6,000

-$4,000

-$2,000

$0

$2,000

$4,000

$6,000

$8,000

Mortgage Interest and Property Taxes in Excess of Standard Deduction

2017 © AppFolio, Inc. Confidential.

2017 © AppFolio, Inc. Confidential.

Migration

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Decline in Rural Life

6% 7% 10% 8% 21%

71% 79% 69% 77%

71%

23% 14% 21% 15% 8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1970 - 1980 1980 - 1990 1990 - 2000 2000 - 2010 2010 - 2015

Growth By Decade

Urban Suburb Rural

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2017 © AppFolio, Inc. Confidential.

Affordability

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2017 © AppFolio, Inc. Confidential.

Rent Burdens

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

1990 2000 2005 2010 2015 2025

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Poll #3Are you seeing an uptick in affordable housing

management in your area?

a) Yesb) No

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AgingPopulation

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2017 © AppFolio, Inc. Confidential.

Technology Predictions

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As technology optimizes day to day processes and functions, successful property

management companies will differentiatethemselves with amazing service…

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Big Data

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Machine Learning

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Automation

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2017 © AppFolio, Inc. Confidential.