Property Management Industry Trends 2024

In 2024, property managers will need to be aware of numerous property management trends to stay ahead of the curve, increase property value, and provide exceptional customer service.

Global events have influenced a worldwide downturn and a booming property market in recent years. These market conditions have had significant implications for the property management industry. To stay successful and prepare your business for what’s next, you must understand how and why the property management industry trends are shifting in 2024.

The property management industry has experienced transformational waves in recent years, seemingly from every direction. It has been difficult for property management companies to absorb the effects of labor and material shortages, rising regulations, industry consolidation, and the housing affordability crisis.

They have been confronted with increasing resident and client demands and expectations and the threat of competition from institutional investors and management companies flooding the single-family rental sector.

2024 Property Management Industry Trends

Demand for rental housing & affordability

Often, there is a significant demand for rental property, especially in urban locations where the cost of home ownership might be prohibitive. This demand might result in a tight rental market with intense competition for available apartments, and prices may increase.

Many renters are concerned about affordability, as rising rents might make it harder to afford to house. These factors can contribute to increased rents:

• Demand may exceed supply when the number of rental apartments is restricted, resulting in price increases
• Strong economic growth can increase the demand for rental housing, driving up prices
• Changes in the region’s demographics, such as an influx of young professionals or a rise in the number of new residents, can also contribute to an increase in the demand for rental property

To solve these problems, politicians and community leaders may explore boosting the supply of affordable rental housing, enacting rent control measures, or providing rental assistance programs to low-income individuals and families. These techniques can have beneficial and harmful effects on the rental market, renters, and landlords, so it’s vital to analyze their potential implications carefully.

Transforming property managers’ relationships with clients

Providing sympathetic customer service directly increases client loyalty. For example, property managers may have a more formal and transactional relationship with tenants, focusing on rent payments and repairs requests.

However, as tenants become more established and stay longer, the relationship may become more personal and focused on building trust and rapport.

Many property managers believe that their relationships with their clients have become more personal due to providing guidance and assistance through the financial strain of the pandemic. This has increased client loyalty but also triggered more empathy (and time) than previously.

When clients feel their concerns are listened to, and you’re meeting their needs, they are more likely to feel valued and appreciated. This can lead to a sense of loyalty and a willingness to continue doing business with your company.

Here are a few ways you can treat your clients with compassion:

• Listen closely: Pay close attention to what your customers are saying and make an effort to comprehend their demands and worries
• Be sympathetic: Demonstrate your concern for and willingness to go above and beyond for your customer’s needs
• Be receptive: Attempt to swiftly respond to any problems or troubles that your clients may be experiencing
• Be proactive: Seek out ways to foresee and stop possible issues before they happen.

Higher rental property regulation

Higher rental property regulation can refer to various laws and regulations that apply to the rental housing industry. These regulations can vary depending on the jurisdiction and may include the following:

• Landlord-tenant laws: These laws establish the rights and responsibilities of landlords and tenants and may cover issues such as rental agreements, security deposits, rent increases, and evictions
• Health and safety standards: Rental properties may be subject to various health and safety standards, such as requirements for smoke detectors, carbon monoxide detectors, and other safety features
• Fair housing laws: These laws protect against discrimination in housing and may prohibit landlords from discriminating against tenants based on race, religion, national origin, disability, or other protected characteristics
• Zoning and building codes: Rental properties may be subject to local zoning and building codes, which can regulate issues such as the number of units allowed in a building, the size and layout of units, and the types of renovations are allowed
• Higher rental property regulation can positively and negatively impact the rental housing industry.

On the one hand, it can protect the rights and interests of tenants, landlords, and property owners and ensure that rental properties are safe and well-maintained. It can make owning and managing rental properties more expensive and complicated, which may keep some landlords from getting into the market.

Industry improvement in property management

In the property management sector, improvement or consolidation describes how smaller property management firms are bought out by or combined with larger firms. Several factors, such as the following, have influenced this trend:

• Economies of growth: More substantial property management companies might have access to resources and economies of scale that enable them to function more effectively and efficiently
• Technology: They need to position better the more prominent businesses to invest in and use these tools, given the industry’s growing use of technology in recent years
• Competition: As competition in the property management sector increases, smaller businesses may feel pressure to merge or be acquired to survive
• Demand in the market: Some property owners and landlords might favor working with more prominent property management companies with a proven track record and a solid reputation

Improvements in the property management sector may have both favorable and unfavorable effects. On the one hand, larger businesses can provide a broader range of services and resources, which could increase efficiency and professionalism in the sector. Consolidation can also result in a decline in competition, which might raise consumer prices.

Single-family home rental

In general, millennials want to purchase homes. According to CNBC, 65% of millennials considered homeownership the top indicator of success. But for some of the reasons we just mentioned, most millennials need help to afford to do this. What, then, is the best alternative?

Build-to-rent neighborhoods have become more popular as homeownership has become increasingly out of reach for younger generations. Without making a sizable down payment or a long-term financial commitment, these communities enable residents to enjoy the lifestyle that single-family homes offer, including more room than most apartments, fewer restrictions than apartment living, improved privacy, and even a tiny yard.

Over the next 18 months, they anticipate investing $40 billion in single-family homes for rent. Phoenix, Dallas, and Columbus are the three biggest markets, and construction for single-family homes being built for rent has increased more than a twofold year over year in 2022.

If you currently manage single-family rental properties or are considering entering the market, now is an excellent time to network and market your company to owners and developers of build-to-rent communities.

Both positive and negative effects of industry consolidation in property management are possible. On the one side, it may result in more outstanding professionalism and efficiency in the sector as bigger businesses may be able to provide a broader range of services. On the other hand, a reduction in competition brought on by consolidation may result in higher prices for consumers.

Difficulty in attracting and keeping team members due to labor shortages

Property management had a greater turnover rate than some other sectors. Property management is challenging; many employers expect their personnel to work weekends and be available after hours for emergencies.

When unemployment rose, the employees were likelier to agree with all these requests and conduct time-consuming manual duties like data entry. However, due to the present labor problem, today’s employees require more for exchange for their efforts, driving all these “Great Resignations.” Companies are suffering as a result of this misery.

According to some studies by the National Apartment Association and AppFolio, the most pressing issue for property managers is human resource staffing and recruitment. To recruit and maintain the best-motivated talent in a competitive labor market, property businesses must rethink what they could provide their staff and how to make the work less repetitive and much more meaningful.

Companies should give their teams the tools they need to automate and streamline their jobs and offer more competitive remuneration and benefits. Your employees will be pleased if you manage service requests, payments, deposit refunds, and renewals. Employers could also keep their employees by providing a friendly work atmosphere and more flexible hours.

Rising housing costs

• In 2022, the youngest generations reached homeownership. However, they still need to purchase a home. Rising real estate prices, inflation, and financing costs make it more difficult for homeowners to buy a home. Think about the following:
• In May 2022, the home value in the United States was $430,621, increasing 14.8% since May 2021. Based on the BLS, consumer prices climbed by 8.6% through May 2021 and May 2022. To combat inflation, the Fed boosted mortgage rates, drastically decreasing this generation’s purchasing power, which exacerbated the crisis.
• Since 2005, the standard college grad has graduated with about $20,000 in student debt. The student debt in 2020 will be $30,017. Instead of saving for payment, they use the funds to pay their obligations. According to the 2022 Redfin study, 38% of participants didn’t make enough money to save for a down payment on a home

So, millennials will keep renting long after they reach the age when people in previous generations bought homes.

Property Management Technology Allows for Greater Operational Productivity

The extensive adoption of technology by the customers of property managers can have numerous advantages for both property managers and their clients. The following are examples of how technology in property management can enhance the customer experience:

• Technology will surely improve the efficiency and effectiveness of communication between property managers and their clients. For instance, property management software enables landlords and tenants to quickly track and request maintenance, pay rent, and receive property updates
• Technology can make it easier for property managers to manage their properties and for tenants to access rental-related information and services. For instance, online portals and mobile applications can enable renters to see their account balances, request maintenance, and pay rent from anywhere
• Technology can also contribute to an increase in the property management process’s transparency. Online portals, for instance, can offer landlords and tenants real-time information regarding the status of repairs or other issues, thereby reducing uncertainty and misunderstandings

Overall, the widespread adoption of technology by customers of property managers can result in a more efficient and successful property management process, enhancing the customer experience.

Property managers have found how efficient their operations can be with the right technologies without sacrificing service quality. 30 % of property managers anticipate that by 2022, employing technology to increase efficiency will be an integral part of their revenue growth plan.

Conclusion

You can maintain the competitiveness of your property management business in 2022 and the following years by following these commercial trends and implementing some of the actions listed above. Provide competitive compensation, benefits, flexibility, and a positive corporate culture to attract and retain talented employees.

Recognize that as home ownership becomes less affordable, the average age of renters is increasing. Since renting is no longer just for people in their 20s, you may need to change how you market and talk to older millennials.