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COVERED BY SAGE

ASSIGNMENT
For Management Intern (Strategy)

SUBMITTED BY- LAVANYA LIPIKA


US Property Managers that will align with Sage

For this, take us through how you thought of these property managers – why did you choose this property
manager?

o What was your funnel and how did you finalize this 1 property management company?

o What is the profile of this company – location, size, technology adoption, and spread of the partner that
you eventually chose?

o What resources and research did you use to locate this partner? Why do you think they are great for
Sage?

According to me, Specialized Property Management (SPM) in Texas will completely align with SAGE.

Things to consider before choosing a Property Manager-

1. Company must have an active broker’s license.


2. “Property Management” must be its primary business.
3. The company must be in business for at least 5 years and managing at least 500 properties- This
is important because company that is new and handles fewer units usually lack good policies and
procedures and having a company that is organized is paramount in this business.
4. The Property Managers must be the member of the National Association of Residential Property
Managers (NAPARM)- Industry organizations enable property managers to build relationships,
learn from their peers, and stay up-to-date on industry news—three critical building blocks for
small businesses. It’s clear from their feedback that NARPM members feel strongly about the
insights and opportunities that they gain from their participation in local, state, and national
chapters

Considering all the above points, Specialized Property Management (SPM) seems to be the best choice
for SAGE. (Source- https://specializeddallas.com/)

About SPM-

It is one of the highest-rated professional property management teams in the industry. They deal with
management of single and multi-family rental properties. They pledge low vacancy rates, thoroughly
screened tenants and cost-effective maintenance services. They have been helping property owners in
Dallas, TX and the surrounding Fort Worth, Arlington, Frisco and Plano areas with over 30 years of
experience in this industry. They are the only Home Depot Certified and Approved property management
company and have been recognized by both Forbes and Inc. 500. Their Property Managers are also the
member of NAPARM.

Key Metrics- BBB Rating- A+, Years in Business- 30

Specialized Locations- Dallas and Fort Worth, Texas

(Source- https://learn.roofstock.com/blog/property-management-companies-dallas)
They utilize the following programs and technologies for fast and effective leasing:

- Rental IQ™ is proprietary, advanced tenant screening software that applies Artificial Intelligence
to maximize owner revenue and lower risk.
- Secure Electronic Entry Lock Boxes allow prospective tenants to securely view properties without
putting themselves or leasing agents at risk from the COVID-19 virus. All a potential tenant has to
do is submit a few personal details like name and phone number, and then list a credit card in
order to view the home on their schedule. Not all Dallas property management companies offer
this feature, and they are proud to say integrating these lockboxes has increased their number of
showings by 34%.
- 3D Virtual Tours What better way to view rental home online than with advanced 3D technology?
The tenant will feel like they are literally “walking-through” the property, seeing each and every
room in the house, and exploring the layout
- Premium Paid Zillow Listings. Many people use Zillow.com to view potential homes and
apartments. In order to list on their website, Zillow now requires property management
companies (such as SPM) to pay for advertising vacancies. They believe showing homes on
multiple platforms and websites only increases the number of interested applicants, so they have
opted to pay for this premium listing placement.
- “No Security Deposit” Options for Tenants. A lot of renters don’t like paying a large amount of
money upfront for a “security deposit” when they’re living on a tight budget. That’s why at
Specialized, they offer a unique program that replaces cash deposits with surety bonds for
qualified renters.

(Source- https://specializeddallas.com/why-were-the-leader-among-dallas-property-management-
companies-how-were-protecting-you-during-the-covid-19-pandemic/)

SAGE must focus on partnering with Property Manager located in TEXAS, especially DALLAS as well as
those Property Managers who deals mostly in Single-family Home and Multi-family Home.

Few Facts/Reasons for Why SAGE must do the above-

1. Dallas, Texas is among those areas where the top renters live- SPM is one of the leading property
managers in Texas.
2. Most renters stay in Single-family and Multi-family Homes- SPM deals with these properties.

3. Dallas is among the top housing market for baby-chasing boomers and millennials- This makes
sense since Dallas and all those other markets are attracting thousands of young workers to fill
new jobs. The boomers are the second-largest group of homebuyers in the market after the
millennials. And unlike the youngsters who often put off a purchase, the clock is ticking for their
elders to make a move.
(Source- https://www.dallasnews.com/business/real-estate/2019/07/15/dallas-is-a-top-housing-
market-for-baby-chasing-boomers/)

Thus, Specialized Property Management (SPM) also provides one of the best rates on Rental Property
Insurance to the owners and they strongly encourage the homeowners to suggest renters insurance to
the tenants while making them sign the contract. So, if SAGE partners with SPM, it would be beneficial
for both the parties and renters can be given option to for the insurance online on the property
management software itself making it easy for everyone.

Customer pain points related to renter’s insurance.

o List down the perceived drop-off points in purchasing renter’s insurance by tenants and why a tenant
chooses not to get renter’s insurance.

o Can you now think of how Sage can solve this problem of drop-offs in renter’s insurance?

According to Insurance Information Institute, 93 percent of homeowners surveyed had some kind of
coverage, only 41 percent of renters had insurance. Every tenant thinks they don’t need renter’s
insurance. . . until they do.

There are several perceived reasons why a tenant chooses not to get renter’s insurance. but most of them
are actually wrong or based on misunderstandings of how renters insurance actually works. Some of
them are-

1. Renters Insurance Doesn’t cover much- This isn’t true — Renters insurance can protect all of
your belongings if they are stolen, damaged, or destroyed by a covered peril.
2. Covered/protected by Landlord’s Insurance- landlord has separate landlord insurance, which
just covers the physical building. So if one lives in an apartment, landlord insurance protects the
physical apartment and the whole apartment complex — meaning walls, floor and ceiling as
well as the roof and structure of the entire building. However, the landlord and their landlord
insurance do not cover one’s belongings.
3. Personal property isn’t that expensive- All of one’s clothing, furniture, and tech could get
damaged or stolen in one instance and then more money would be invested in order to buy
new items. Also, renters insurance covers your stuff both on and off the property. So if one’s
laptop gets damaged by a covered peril, in someone else’s apartment, then the renters
insurance can reimburse for the cost of it up to the policy’s limit.
4. Insurance is too expensive- It’s a common myth that renters insurance is expensive, and as a
renter one probably already pays for rent, utilities bill, and internet or cable. Renters insurance
is actually one of the least expensive insurance policies one can buy, costing an average of just
$15 a month.
5. It takes too long to get renters insurance- This is another common renters insurance myth. It’s
actually quite easy to purchase a renters insurance policy, and one might be able to do it
entirely online. Unlike other types of insurance, almost every renter is eligible to get coverage.
Bottom Line- Renters insurance seems to something that is difficult to discuss in simple terms. Very few
people know the value of it. It is one of the most basic investments that one can make for a whole lot of
peace of mind at a very low monthly cost.

How to Implement Renters Insurance-

When SAGE partner with the Property Managers, they can ask them to educate their property owners
regarding Renters insurance and how is it beneficial for the owner as well as the renters. Thus, one needs
to find ways to spread the knowledge and importance of renters insurance. Some of the ways are-

1. Offer renter insurance as a part of the management services- It’s a win-win situation. Residents
get coverage, sometimes for a discounted price; and the property owners are protected from
covering repair bills (for renter-caused damages) or replacing damaged property that the renter
can’t afford.
2. Make it easy- Give residents the option to sign up for insurance through property management
software as part of their onboarding process. Your residents will appreciate how easy the process
is, and you’ll benefit from being able to track which residents are enrolled.
3. Educate the residents regarding the coverage- Invite the insurance provider (in this case- SAGE)
to speak to the residents and highlight its importance and discuss the cost and answer any
questions that the residents may have.

(Source- https://www.buildium.com/blog/why-property-managers-should-offer-and-pitch-renters-
insurance/, https://www.policygenius.com/renters-insurance/8-reasons-not-to-get-renters-
insurance/,https://www.avail.co/education/articles/top-5-reasons-tenants-dont-buy-renters-insurance-
and-theyre-all-false)

Determining the market size of this opportunity for Sage

o Think of ways of determining what we could create at a market share, revenue level over 3 years, if we
act on your idea.

Few Facts-

- The market size, measured by Revenue, of the Renters’ Insurance Industry is $3.8bn in 2020.
- The market size of the Renters’ Insurance Industry is expected to increase 0.8% in 2021.
- The market size in the US has grown 1.7% per year on average between 2015 and 2020.
- In 2018, the average expenditure on renters insurance in the United States amounted to 24.98 US
Dollars per consumer input.
Average annual expenditure on tenants insurance per consumer unit in the United States from 2007 to
2018 (In US Dollars)

(Source- https://www.ibisworld.com/industry-statistics/market-size/renters-insurance-united-
states/#:~:text=The%20market%20size%2C%20measured%20by,is%20%243.8bn%20in%202020.&text=p
ast%205%20years%3F-
,The%20market%20size%20of%20the%20Renters'%20Insurance%20industry%20in%20the,average%20b
etween%202015%20and%202020 , https://www.statista.com/statistics/1052262/us-consumer-
spending-on-tenants-insurance/)

Factors affecting the growth of the Renter’s Insurance in the US-

- The primary negative factor affecting this industry is high competition.


- The primary positive factor is rental vacancy rates.

The Biggest opportunity for growth in the Renters’ Insurance Industry in the US

- An increase in per capita disposable income will boost industry demand because more risk -
averse consumers will be able to afford the discretionary expense. Per capita disposable
income is expected to increase in 2020, representing an opportunity for the industry.

Opportunity for SAGE

Over the five years to 2020, the Renters' Insurance industry has benefited from a growing preference
among Americans to rent living spaces as opposed to buying homes.
1. The strategy to achieve the goals in this rapidly changing industry: Focusing on the human side
of property management by building strong relationships with your residents, owners, and staff
members.
2. Focus on Secondary Market such as Dallas, Texas- It’s an Up-and-Coming Markets- Secondary
markets are generally mid-sized cities that are experiencing an uptick in growth— and as a result,
they begin to capture people’s attention. They see steady growth in the local economy, with new
jobs and businesses opening up, as well as an emerging tech sector in many cases. They also see
steady growth in the city’s population as young, educated professionals and families move in. The
housing market gains strength but remains less competitive than primary markets— resulting in
lower prices for homebuyers and higher returns for investors. In the rental market, occupancy
rates begin to rise; but because the supply of apartments is relatively unconstrained, rent prices
stay affordable for most residents. Overall, more than half of survey respondents located in
secondary markets believe that they’re in a landlord’s market, in comparison with less than half
of those in primary markets

[Do Property Managers in Secondary Markets feel that they’re in a Renter’s Market?]

3. Focus on the Growth by providing excellent customer service through property manager such
as SPM- For example ease of signing the contract online along with adding renters insurance
online; Providing personalized customer service.
4. Focus on those Property Managers who are located in areas where Millennials and Baby
Boomers are increasing- Baby Boomers are the fastest-growing segment of renters, then comes
the millennials. Baby Boomers are far more interested in technology than they were just a year
ago: On average, interest in rental technologies has grown 10 points among Baby Boomers.

(Source- https://www.buildium.com/wp-content/uploads/2020/04/Renters-Report-2020_Digital-
Interactive.pdf)

CONCLUSION

Thus, If SAGE partners with Specialized Property Management (SPM) in Texas, they could create a mark
in Renter’s Insurance Market in the US. They could also grow by 0.8% just the way Renters Industry is
predicted to grow. This could happen because SPM fits all the above-mentioned criteria required to
sustain and grow in this Industry such as-

Millennials and Baby Boomers are the ones renting most of the properties especially single-family and
multi-family home. One of the places their population is increasing is Dallas, Texas. Moreover, the focus
of these groups is increasing on digitization and technology.