What’s in store for 2024? More change, naturally. Some of the most urgent hurdles from years past have receded, while new factors have become top-of-mind. Meanwhile, technology advancements provide new tools property managers can use to navigate roadblocks and grow their businesses.
Findings from the second annual AppFolio Property Manager Benchmark Report shed light on industry sentiment in a changing landscape. This comprehensive study surveyed over 5,000 professionals representing a diverse cross-section of the property management sector. It found that maintaining high occupancy rates is a higher priority for property management professionals this year. These concerns reflect a more competitive rental market, driven by a major influx of new construction that is expected to peak in 2024.
That’s not all: inflation, supply chain issues and labor shortages, which were primary concerns in years past, have receded as threats. Although prices remain stubbornly high, the rate of inflation slowed toward the end of 2023. Meanwhile, the end of The Great Resignation has eased hiring and retention challenges. Against this backdrop, property management professionals are less concerned about both inflation and labor shortages compared to a year ago, according to the report. Inflation concerns dropped by 6% between 2023 and 2024, while concerns around labor shortages dropped by 13%.
Property management professionals are largely optimistic about the year ahead: 81% of property management professionals are confident about the state of their business in 2024, while 77% expect revenue to increase. To turn this optimism into action and navigate a changing market amid shifting priorities, property managers should lean into these three areas in 2024:
1. Use Flexible Payment Solutions to Improve Resident Experience
In a more competitive rental market, resident experience has become more important than ever.
Flexible payment services are one way to improve resident experience without costly building improvements or new amenities. In fact, one-third (31%) of property managers plan to offer additional services to residents this year as a way to increase revenue.
AppFolio’s report found large year-over-year increases in property management professionals offering financial flexibility payment solutions, which include security deposit alternatives and flexible rent. These flexible payment services can build loyalty among residents and ease friction in the leasing process, ultimately helping to fill vacancies faster. Not only can these options create a more seamless leasing experience, they’re also increasingly sought after by residents. In our survey of renter preferences last year, 40% stated that flexible rent is important when evaluating a new lease and 47% stated that security deposit alternatives are important.
2. Invest in AI Use Cases That Improve Operational Efficiency
Investing in the right AI use cases can yield major efficiency gains while also benefiting the wider property management team and residents alike. For example, resident communication is a natural fit for AI optimization. Forty-four percent of property management professionals are currently using AI for resident communication, while another 44% plan to do so. Generative AI tools can enable more efficient and consistent resident communications about everything from maintenance issues to payment reminders. This can help boost renter satisfaction and build loyalty while creating more efficient workflows for managers.
Administrative work can also benefit from AI’s ability to automate the rote tasks that can leave teams distracted and dissatisfied. For example, nearly one-quarter of respondents are already using AI for data entry, while others are using AI for work order management (18%) and data aggregation, reporting and analysis (17%). Automating these tasks can improve efficiency and reduce human error while leaving teams with more time to focus on customer service and the person-to-person connection that defines property management.
3. Prioritize Safe and Secure Processes
With supply shortages and labor challenges taking up less headspace for property managers in 2024, they can devote time to staying ahead of emerging challenges; namely, data security.
Property managers should prioritize software that provides important security and anti-fraud solutions. Following the widespread digital transformation efforts of the past few years that saw many payments and operational processes move online, data security and fraud are more top-of-mind for property management professionals this year. According to our report, 22% of property management professionals experienced fraud or security issues in 2023, compared to 14% the year before, while 44% are more concerned about fraud than they were a year ago.
On the payments side specifically, property managers should seek out partners who can enable features like two-factor authentication and bank verification, and that allow residents to input their bank details directly into the platform via a secure portal. A trusted payments platform can also provide behind-the-scenes tools like transaction monitoring, flagging duplicate payments, and protection of stored payment information.
Choosing the Right Technology Partner for a Successful 2024
To keep up with the changing rental market, property management professionals must shift their priorities in key areas of the business. Investing in flexible payment offerings, using AI experimentation to drive efficiency, and staying ahead of cybersecurity challenges can boost resident experience in a more competitive rental space while benefiting the business.
Each of these three actions requires a trusted technology partner. A partner with an innovative, secure platform can enable property managers to better connect their communities, increase operational efficiency, and grow their business. It’s clear that property managers see a lot of promise in the year ahead, and technology has a strong role to play in achieving that promise – not only in 2024 but well beyond.
For more information on property manager trends, challenges and opportunities in 2024, download the AppFolio Property Manager Benchmark Report.
