30 Key Trends for the Property Management Industry in 2024
As you turn your attention ahead to the new year, you might be carrying a large set of legacy business challenges with you.
Rent payment delays, falling rent, rising vacancy rates, debt, fewer trained staff and higher wage costs, higher maintenance and financing costs, rent controls and more will plague even the most capable landlords and management firms.
And as in previous years, digital technology is expected to save businesses. With a good business model and a great marketing strategy, your property management software can help you leverage the many trends that will impact you in 2024.
Studying the Trending News and Technology
A lot of people take a light interest in trending market changes such as demand outlooks, price trends, new technology, and more, yet don’t act on that knowledge. 2023 was the year of asking questions, gaining clarity and establishing priorities.
In 2024, as interest rates fall, more housing will be released onto the market thus competition is reappearing. New construction will release more units onto the market, and renters will be able to leave their rentals to own a place of their own.
And in 2024, more lessons will be learned. You’ll be asking a lot of questions such as:
- should I buy or manage more rental properties?
- should we investigate a more modern property management software platform?
- how will digital technology affect our staffing needs?
- should we investigate additional revenue-generating digital amenities and services?
- is this the wrong time to upgrade/renovate apartments and houses?
- how can we improve our marketing and lead generations?
- how can improve services and tenant retention?
- is a recession just ahead and how do we minimize risk and hedge our assets?
- is remote at-home workstyles going to persist and what do we need to capitalize on that trend?
- how can you automate more work?
- how much do Proptech Amenities/Services affect the choices of younger rental prospects?
30 Property Management Trends
1. Profit: Surveys show profit and cost reduction (wages too) are high on property manager’s priority list. With inflation, wage, rent delinquency, taxes and other costs remaining high, keeping an eye on losses and expenses helps maintain profitability. Acquisitions, new services and SaaS software technology are taking center stage as the rental market is still booming.
2. Business Growth: Whether by planned scaling up or growth hacking, some landlords and property management firms will be intent on increasing doors and services. Many expect some challenges, yet even as the economy slackens, the scarcity of rental property and strong demand will support property management company revenues. Growth and tech competence may be why landlords may decide to change their property management service provider.
3. Cost of Doing Business: Inflation is expected to run high for at least 2024. Wages will remain high for 2024, materials costs are still a factor, green initiatives will make maintenance and repairs more expensive, taxes will rise, although energy costs have fallen. Containing property management costs is still a priority in 2024.
4. Growing Demand for Multifamily: The persistent demand for single-family homes and high detached house prices will will remain as houses are purchased, not rented out. This is turn means Americans will pursue multifamily units in 2024. Construction was strong in the last few years, and this sector is providing profit opportunities.
5. Growing Demand for Property Management Services: Landlords are overwhelmed at the demands of the new era of rental property management and the rising expectations of tenants. Expertise and digital management tools make professional manager’s services attractive to them. From background checks to accounting services to turnover management and maintenance advice, to rent collection and government-mandated compliance, it’s becoming obvious to landlords that property management software must play a role.
6. More Staffing Challenges: labor market participation remains low and it’s become more difficult to attract skilled property management staff as well as find others who have good potential. While property management jobs can pay well, and technology has arrived, the shortage of good workers will persist.
7. Focus on Tenants: Smart property managers are working on better tenant advertising, screening, and creating an enjoyable tenant experience. Effective communication to tenants and the greater community is key to developing rapport and delivering value from your tenant’s point of view.
8. Pursuit of Better Amenities: Renters are asking for more in lieu of fast rising rents and work from home requirements. Here’s what renters are looking for this year, as reported by Yieldpro (on the NMHC/Grace Hill Renter Preferences Survey).
- Washer/dryer in-units (92 percent of renters interested / $54.73 monthly premium);
- HVAC (91% / $54.73);
- Soundproofing (90% / $46.21);
- High-speed Internet (89%; $47.93); and
- Walk-in closets (88%; $43.46).
9. Rising Taxes and Closed Loopholes: Governments having overspent and facing rising costs, lower tax revenues, higher borrowing costs and materials costs, along with rising wage costs will need to charge more income and property taxes. They’ll also make changes to prevent tax evasion and to capture more revenue from real estate. In high-tax states, the coming rise in taxes could threaten many landlords.
10. Renter Migration: The migration to low-tax states, along with work-from-home workstyles has changed the demands of renters. Renters want more room, lifestyle, amenities and high-speed Internet so they can work and live in the same space without sacrificing their health too greatly. Landlords who cater to their needs, especially in states such as Texas, Florida, Tennessee, and North Carolina stand to enjoy strong demand.
11. Choice of Location: In past markets, renters scrambled to capture slim pickings near where they worked. Americans are on the move to find more affordable homes and they’ll be leaving their rental leases. After a pandemic work-from-home era, workers are being forced back to the cities and on site work at head offices. Rising unemployment rates mean employers are getting the upper hand and some urban landlords will see better demand in 2024. Crime will be a major factor is tenant losses in some states such as Illinois, California, New York and Chicago. People are leaving these states searching for rentals elsewhere.
12. Technology and Automation Trends: New cloud services, SaaS, Internet-connected devices and automated services become more popular. AI is entering the picture in a limited way, but will much talked about in 2024. Steamlining work, being compliant, secure, and providing always on services to tenants will drive tech adoption this year. Virtual showings, web-based services, tenant apps, online rent payment will ease workloads for busy property managers. The era of virtual property management is well underway.
The demand today is for all-in-one cloud based platforms that are easy to learn and use. Full SaaS platforms aid in workflow automation, meet changing rental regulations, optimize financial management, and offer lease driven accounting and expense management which reduces administration and improves confidence in financial and operations reports.
13. Demographic Trends: Millennial and Gen Z tenants are comprising more of the tenant market and they want high tech digital solutions. Without the technology, they consider a landlord backward or irrelevant. Tenants make judgements based on how a landlord markets to them and what services they offer online. Landlords as well, choose property management companies based on tech expertise.
Without technology, a property management firm won’t possess the relevance, efficiency, competence and capacity to scale up to allow owners to achieve profitability.
In some cities, apartment rental demand will increase (e.g., San Francisco, Boston, New York, Miami, etc.) occupancy rates will likely shrink further as the pandemic ends. Workers quitting jobs and migrating to southern, low-tax cities such as Austin, Dallas, Houston, Orlando, Tampa, Jacksonville, Charlotte) will mean challenges for the cities they leave behind.
15. Rent Negotiation: The market could be divided into 2 sectors: those who can afford rent and those who can’t. More high income renters will appear and they’ll be willing to pay much more but they have negotiation power in 2024. They’ll want better services and amenities whether in a house or low-density townhouse/condo or apartment situation. There will be more rent negotiation, especially as some renters threaten to move out in 2024.
16. Changing Economy and Trade Tariffs: The tourism may be strong in 2024 in some areas thus landlords may turn some units into short term rentals for the greater profit potential. The US is detaching from China and reducing the trade deficit which will give the US economy a significant boost.
17 . Government Restrictions: given how high housing prices are and how high rental prices have become in cities such as San Diego, New York, San Francisco and Los Angeles, cries by politicians for action against landlords and wall street landlords will remain. Compliance to regulations will be a point up to the 2024 election.
18. New Construction Trends: besides big growth in new construction, and government programs can impact your future rents and income potential.
Large multifamily buildings had a good run in 2024, however developers have had to resort to offering concessions to get units leased. Big developments near key transit locations will receive priority from government and multifamily should have a good year in 2024 as the glut is dried up.
19. Interest Rates and Inflation: financing, wages, utilities, and operating costs will likely cool in 2024 as the FED rates cuts kick in. Smart financing will be required as many rental landlords face refinancing their mortgages and debts at much higher rates. This will result in more properties being foreclosed or being listed for sale. Some rental property businesses will pick up new properties.
20. SaaS Software Technology: Automation is the big ask in property management this year. Managers need to get tech to do more to easy their rising workloads and to scale up their business. This means shifting workloads to tenants to allow them to inform and prepare themselves, and thus reduce direct demand. New cloud-based SaaS software technology is delivering the desired capabilities. SaaS brings additional improvements in property accounting, time management, tenant screening, virtual leasing, online payment, property maintenance and repair services. Some offer complete solutions while some with little more than simple apps are found inadequate.
21. Demographic Shifts: Baby boomers are finally retiring and the Millennial and Gen Z generations are out of their parents homes and into renting their own apartments. Some renters will continue migrating out of the cities to rent more roomier houses and cheaper locales. Your rental products and management style will gradually be reshaped to suit them in 2023.
22. Startup Property Management Companies: We’ve all heard about the growth in accidental landlords. Estimates are that 100,000 new startups will enter the rental business. Buying rental income properties is popular and many are realizing there is big money in property management. They will be cautious and knowing that property management automation and growing their portfolio are keys to operating a successful property management company.
These newcomers to property management won’t want anything to do with old PM practices involving spreadsheets, receipts, and paper check payments at month’s end. No, they’re not trained pros and they’ll want to simplify right away using property management software.
23. Industry Consolidation: Big property management conglomerates are entering the independent property rental market. What are they looking for in properties or in property management companies they’d like to acquire? What services will they offer (e.g., maintenance). Will investors be a threat to the rental market sector?
24. Property Management Specialization: Given growing complexity in PM licensing requirements, government legislation, lender regulations, insurance requirements, environmental constraints, and accounting and taxation property management professionals have begun to specialize. Will expertise in any area give you a business advantage? What training and licensing must you obtain?
25. Rental Property Insurance: Changes in legal liability mean more renters should have their own renters insurance, and they will. Yet, fraud is prevalent and premiums are rising fast in some regions. Similarly, landlords will also need to be sure of their own landlord insurance. Is insurance coverage for them a value add for your property management company?
26. Digital Amenities including Keyless Entry, 5G and Free Wifi: Here are some more benefits tenants love. It’s for large multifamily buildings or large portfolio managers to either provide free wifi or create it as an affordable option for tenants. 5G Wifi may be the coin-operated washing machine of the next 5 years.
27. Smartlocker Storage: We’re in the era of Amazon shopping. Amazon’s growing share of retail shopping is shocking. Tenants will need some way of accepting packages at their apartments, many of which don’t have suitable storage. Smart lockers allow them to pick up parcels when they can. The tenant receives a digital message and unlock code on their smartphone. Yes, another app.
28. Property Management Marketing: Given the complexity of property management today and how new client opportunities are happening as landlords scale up portfolios, property management companies realize they have to market their services better. Otherwise, competitors will gain marketshare. Managers will look to integrate social media, PPC ad campaigns, SEO, and website content to build presence and reach the best prospects.
29. Greater Demands from Owners: Owners see what’s available via other property management services companies. They’re looking for better financial reporting, help with rent collection and evictions, and advice on financial management.
Some are turning to lead generation and brand building strategies. Using social media advertising and content marketing on their website, the best companies will be making noises this year. Building a brand and communicating services will drive new business in growing markets.
30. Affordability and Homelessness have become more pronounced Political Factors: This election year, more attention is focused on the condition of the average family and individual — from taxes to crime and education. Landlords will be asked to do something about the safety of their properties which means a demand for surveillance systems and security guards.
As each year passes, the role of technology in property management grows. Property managers are looking to upgrade to all in one SaaS powered software. Investigate ManageCasa as a suitable choice to bring your business into the modern era, and enjoy reducing costs, improving services, keeping data secure, and improving service quality for your tenants.
Please share the news and trends with your real estate associates and friends.
These are just a few trends in property management software to be aware of in 2024.
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