Property Manager’s Top Challenges 2023
As we enter 2023, landlords and property managers are awakening to the daylight of a new era of business.
There’s been many changes in the last few years and 2023 is bringing more. New surveys are finding a shift in the property management business landscape, and it’s not just the views that are changing.
Significant real threats to business as usual have appeared and new business models might be necessary.
The human resources sector as an example, is posing significant challenges via higher worker churn, more job vacancies, workers demanding better working conditions, and refusing to work for low wages.
New legislation in the US could see the end of non-compete agreements such that workers can leave and work for any competitor that wishes to pay more or offer better training and working conditions. Workers too are fatigued from the Covid pandemic, and with inflation persisting, they want higher pay.
Rising Wage Costs, Inflation, and Lower Revenues
Overall, the challenges and goals of property management remain similar from year to year. Yet 2023’s headwinds will be stronger than usual. It’s a year where manager’s wished they had implemented digital solutions.
In the last 3 months, rents have begun to fall meaning landlord revenues and property manager’s budgets will fall in 2023. Costs are rising and rent revenue hit a ceiling in 2022.
While capturing new clients, cutting operations expenses, managing rising costs, and developing new sources of revenue are vital to a growing business, the top challenge of 2023 will likely be property management staffing.
All of these real world pressures will force property managers to modernize with a secure, powerful, cloud-based, modern software solution.
The Pressure to Upgrade
Those landlords who haven’t evolved to modern landlord software will feel increasing pressure to do so. The workload will rise, regulations will pressure, need for real time reporting, and the speed of change seems only manageable through software automation. So this is good.
Simplicity will be sought and landlords will see the value in simplified yet powerful software. Normally, those two are not in the same solution. They’ll be taking a closer look at ManageCasa for that reason.
2023 Changes Coming
2022 was a year of rising rents, and 2023 could see a reversal for some. With inflation high and job losses coming, turnover may become the biggest challenge of the year.
Rent collection and turnover costs will pressure many landlords. Property managers on the other hand will face mounting pressures on the profit margins as staffing costs and inflation eat away at budgets.
Some people believe challenges are opportunities, pointing the way to better business performance and sustainable success
Top 7 Challenges Ahead for Property Management
Let’s look at the TOP 7 Challenges ahead that ManageCasa property management software might help you manage better:
- property management staff turnover, rising wages, inexperienced trainees, and disloyal employees — makes human resources seem threatening.
- late rents and rent arrears — a never ending problem as affordability and rising poverty threaten more renters, leading them falling behind on their rent payments. Landlords will need to use software to put payments on auto, and hire rent collection services and lawyers to capture the funds in arrears.
- employment related instability — dissatisfied renters wanting more out of their lives, will seek cities, towns, buildings, homes, and neighborhoods that offer a better work/lifestyle balance. The new work world is decentralized and mobile, yet many employers are demanding staff return to the head office. Residential turnover and vacancies will rise.
- demand for larger roomier homes — the work from home era and growing demand from Millennials forming new families means a lot of demand for bigger homes. Since apartments aren’t being made bigger, the demand is mostly for attached townhouses and single family houses for rent. Rent prices for 3 and 4 bedroom houses remains solid. 1 bedrooms will be tougher to rent. You may have to reno a bit, or be very persuasive in your online marketing.
- growing rental supply — new multifamily construction has picked a little easing the undersupply issue somewhat. New properties means opportunities to provide units with improved amenities thus higher rent prices (Landlords will be pressed to upgrade to the best type of rental property).
- rising labor, service costs and higher financing costs — with inflation, wage demands, and rising interest rates along with government land service fees, property taxes, materials costs, and financing challenges, landlords will need their accounting software to find efficiencies to reduce costs and expenses, and to ease tax loads.
- higher taxes — a perennial problem that is going to be more severe in 2022. While government’s cite wealthy landlords as their target, nearly all landlords will be paying more. Landlords will be challenged to find ways to cut their tax losses and many will look to buy in the best cities in low tax states such as Florida and Texas.
Check out ManageCasa’s amazing features now. You’ll discover more including the most troublesome issues, which you can discuss with the sales team.
* Come join us at NMHC’s Annual Conference in Las Vegas on November 1st. Let’s talk about your property management challenges and where your company is headed.
More on the ManageCasa blog: Property Management Software | Property Management Cost |Compare Software | Property Manager Goals | Vital Management Goals | Property Management Trends | Enjoyable Landlord Software | Simple Landlord Software | Landlord Tax Deductions | Landlord Bookkeeping | Landlord Risk & Liability | Top Software Features