Property Management in the US
As we enter 2024, a new set of demand and supply factors will color the property management industry landscape.
Each area of property management including single-family, apartment, multifamily, associations, retail and commercial sectors has unique demand profiles. And rental owners will face mounting pressures from regulatory, political, residents and financial sources.
And as financially capable renters leave to buy homes to be replaced by burgeoning numbers of less financially empowered Gen Z’s and migrants trying to acquire rentals, the revenue outlook is cloudy. Efficiency will be more important to property managers than ever.
To keep pace with this evolving industry, landlords, community managers, Realtors, investors and property managers will have to improve their knowledge — on market status, demand/supply dynamics, financing, news, trends, challenges, opportunities, technology and politics. As large property asset investment firms seek to grow marketshare, vulnerable, uninformed small landlords face challenges.
What is Property Management?
The property management industry itself is undergoing a change in identity. The question of “what is property management” is being asked more frequently. Is it serving tenants, society and government, banks, rental investor landlords, or is it strictly business management as a technology-based enterprise? 2024 brings new definitions that respond to industry changes.
And can such a dynamic type of business even be called property management when tenants, services and financial management are its key components? These are questions industry associations such as NARPM, NAA, and NAR should be investigating as large investment firms buy a bigger slice of the rental housing market. Will small landlord businesses disappear as big landlords gain competitive advantages?
The Greater Economy’s Influence
Two of the most critical matters in property management are the US economy and regulation. As 2024 unfolds, more homes and apartments will come onto the market along with a slightly improving economy. If housing construction is supported, more supply will be delivered.
However, renters will remain under pressure to pay their rent due to a continuously high cost of living. Dealing proactively with costs, renter financial challenges, legal compliance, and rising tenants expectations are the key trends of 2024.
Trends and Challenges
Confusing property managers and investors is a barrage of hyped-up news on macroeconomic and microeconomic stats. Landlords will need a better overview of market trends and dangers to avoid big losses. The trend to property management software technology is the biggest savior for landlords and property managers.
The trend is toward complexity, higher costs, and labor challenges. Successful modern landlords see the trends and are moving to modern property management software platforms as a foundation for their businesses. Professional-level software is the core of a landlord’s business and they will rely for management insight, work efficiency, revenue generation, rent collection, maintenance optimization, and tenant communications. Property management software is the heart of today’s businesses.
Keys to Strong Property Management Performance
Let’s take a practical look at what all types of property managers do.
There are 3 key services for landlords and property management companies: (1) tenant services, (2) accounting and financial management, and (3) professional and efficient maintenance services.
The goal of all property managers is to maintain financial viability by providing a comfortable living space for tenants, and improve their business value proposition to remain competitive in their local rental marketplaces.
New Business Models Appearing
With new property management business models and technology opportunities, forward-thinking property managers actually have an improved chance of survival. Without growth in properties, small business landlords are innovating with new service and revenue strategies based on digital services and strategically chosen new property amenities. Personalization of services is a trend that can be delivered via property management software.
Investors, startups and SMB landlords are reviewing: tenant preferences, costs and accounting insight, software platforms, AI and automation, payment systems, revenue models, marketing, and predictive maintenance to optimize their entire business simultaneously. Small landlords can gain significant improvement simply by using new SaaS software as a foundation for their entire business.
AI and Property Management
New to the property management sector is artificial intelligence systems which take automation one step further. While smart automation is infused into some property management software solutions, artificial intelligence proposes to improve operations and decision-making. AI systems analyze business processes to tame bottlenecks, find errors, and offer suggestions to landlords.
Can AI as a force encourage landlords to progress with confidence? This might be the biggest issie for the small business sector. However, AI is definitely a major trend in property management.
AI is being used in:
- Automated Tenant Screening: AI algorithms can quickly analyze potential tenants’ applications, credit scores, rental history, and other relevant data. This helps in making more informed decisions about tenant approvals while reducing the risk of human error or bias.
- Predictive Maintenance: AI systems can predict when equipment and building components are likely to require maintenance or replacement. By analyzing historical data, AI can forecast future needs, allowing for proactive maintenance scheduling, which can significantly reduce costs and downtime.
- Energy Management: AI is used to optimize energy consumption by analyzing usage patterns and external factors like weather conditions to adjust heating, cooling, and lighting systems to maximize efficiency and minimize costs.
- Chatbots and Virtual Assistants: AI-powered chatbots are being used to handle routine inquiries from tenants, schedule maintenance requests, and provide information about property rules and policies, thus reducing the workload on human staff.
- Lease Management and Analytics: AI can analyze lease terms, renewal rates, and market trends to provide property managers with insights for strategic decision-making. This includes identifying potential lease renewals, at-risk tenants, and opportunities for rent adjustments.
- Security and Surveillance: AI-boosted security systems can recognize unusual activities or data and security breaches in real-time. This includes advanced facial recognition, motion detection, and alerting authorities or property managers in case of suspicious activities. Data security features help identify web attacks and prevent malicious entities accessing data, systems and shutting down a company’s servers.
- Market Analysis and Investment Insights: AI algorithms can analyze vast amounts of market data to identify trends, investment opportunities, and risk factors. This can help property managers and investors make more informed decisions about property acquisitions, sales, and developments.
- Customized Tenant Services: AI can be used to provide personalized services to tenants based on their preferences and past behavior. This includes recommendations for local services, amenities, or even community events.
Of course property management AI is still young and the bugs are being worked out. It is very difficult to replace knowledgeable staff or managers who know the work intimately and respond as human being which many renters still prefer. As an aid to managing properties, AI will present great value when it is mission ready.
16 Key Property Management Services
The essential services landlords need:
- efficient property maintenance process at a lower cost (an efficient process for maintaining properties which is basically proactive time management)
- professional, responsive tenant communications and lease management process (making being leased as comfortable as possible, ensuring no gaps that would result in tenants deciding to leave)
- super accounting services to ensure they’re handling deposits and rent income properly, and documenting expenses, staying on top of accounts receivables and payables, creating informative reports, and preparing great documents for your tax accountant.
- better landscaping services to improve tenant comfort and build curb appeal (the tenant experience is also visual and landscaping and other aesthetic improvements build comfort and impression of value received)
- insight into the rental market and how to price your units better (as part of marketing or leasing services, the provider builds your awareness of renter demands, advertising and negotiating strategies, and tenant retention)
- professional approach to rent collection and rent-related issue management with your valued tenants (arranging online rent payment, and having smooth issue-resolution protocols help the tenant meet their obligations)
- professional, detailed inspections of your rental units and advice on hazards and risks (inspections help to identify mechanical, structural, and other issues that could soon be a big cost)
- improved tenant screening (a multi-pronged strategy using software services and interviewing techniques to avoid bad tenant decisions, which could create a drain on your profitability)
- offer recommendations on improving ROI (expertise helps guide your decisions on improvements, investments, properties, and business models)
- tenant application processing, rental suite showing and move-in (the complete tenancy process made smooth and efficient, using virtual tools and online communications to increase engagement with prospects until they sign the lease)
- writing better leases and better adherence to legal guidelines (ensuring your complete communications with tenants respects tenant and rental regulations to avoid fines and embarrassing fines)
- conducting better marketing and vacancy ad writing services to draw better tenants (composing effective rentals ads and placing them with the top rental listing websites to attract the best tenants)
- excellent property maintenance (ensuring mechanical, plumbing, roofing and other features are inspected and regularly services to avoid substantial losses and tenant inconvenience).
- experience and professional advice for all issues you face (experience and lessons learned on someone else’s properties means fewer costs for you, better decisions, and trouble avoided)
- automation of document management, accounting, maintenance scheduling, and tenant communications (smart automation reduces manual data input, reduces errors, and provides more reliable financial reports for your specific business)
- reaching licensed contractors and vetting all contractors (bonded too) (knowing who can do professional quality work and being responsible for their output takes worry away)
Property Management Services Firms
Start with a few companies in your state here: Property Management Firms.
Additional Insights into Property Management:
Getting Started: Property Software | What is Property Management | Property Management Jobs | Careers in Property Management | Property Management Conferences | Property Management Automation | Property Management News | Property Management Outlook | How to Buy Rental Property | Property Management Tasks | Property Management News