AppFolio’s Second Annual Property Manager Benchmark Report Reflects Changing Dynamics of 2024 Real Estate Market
- Property managers are increasingly adopting AI to boost productivity and enhance resident experiences.
- Flexible payment solutions like security deposit alternatives and flexible rent are gaining popularity among property managers to improve resident loyalty.
- Data security is a growing concern for property managers as more processes move online, with a significant increase in reported security issues in 2023.
- Rising vacancy rates pose a threat to maintaining high occupancy rates, with a 12% increase in concern compared to the previous year.
- Property managers are less likely to raise rents without making improvements, indicating a more competitive rental market in 2024.
- Increased security issues in 2023 highlight the vulnerability of property management processes to cyber threats.
Insights
The findings from AppFolio's Property Manager Benchmark Report indicate a significant shift in the property management industry, which could influence the strategies of real estate-related businesses. The increased focus on maintaining high occupancy rates, due to a 12% rise in concern over this issue from the previous year, underscores the impact of rising vacancy rates. This trend suggests a more competitive rental market in 2024, which could affect revenue streams for property management companies and real estate investment trusts (REITs).
Furthermore, the decrease from 70% to 42% of property managers willing to raise rents without improvements highlights a shift towards tenant retention over rental income maximization. This change may affect the profit margins of property management firms and could lead to an increased investment in property upgrades to justify rent increases.
The report's emphasis on AI adoption reflects a broader trend towards digital transformation within the real estate sector. The fact that 21% of property management professionals currently use AI, with an additional 28% planning to adopt it, signals a growing reliance on technology to enhance operational efficiencies and the resident experience. The application of AI in resident communication, data entry and leasing funnel optimization could lead to cost savings and improved customer satisfaction, potentially impacting the competitive positioning of companies like AppFolio in the market.
Moreover, the rapid adoption of flexible payment services, such as flexible rent solutions and security deposit alternatives, indicates a transformation in how property managers are addressing renter expectations. This shift towards financial flexibility could become a differentiating factor for property management companies, influencing tenant acquisition and retention strategies and ultimately impacting revenue stability and growth.
The increase in security issues experienced by property management professionals, from 14% to 22% in one year, raises concerns about the vulnerability of the industry to cyber threats. As property management becomes more digitized and reliant on online payments and operations, the importance of robust data security measures escalates. The 44% of professionals who are more concerned about security issues this year reflects an industry at a critical juncture, where failure to adequately protect data could lead to significant financial and reputational damage. This concern is likely to drive increased investment in cybersecurity solutions, influencing the operational costs and risk management strategies of property management companies.
AI adoption, data security, and resident experiences expected to redefine property management strategies this year
SANTA BARBARA, Calif., Feb. 15, 2024 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ: APPF), the technology leader powering the future of the real estate industry, today released its second annual AppFolio Property Manager Benchmark Report, offering insights into the industry’s strategies and priorities for 2024.
Based on responses from more than 5,000 U.S. property management professionals, this comprehensive study encompasses a diverse cross-section of the property management sector. It reveals that maintaining high occupancy is a top concern, due in part to rising vacancy rates. More than one-third (
Additionally, respondents are less likely to raise rents this year when not also making improvements to the unit or building, decreasing from
“As we navigate a changing rental market in 2024, property managers are looking to improve operational efficiencies to maintain a competitive edge,” said Stacy Holden, Senior Director, Industry Principal at AppFolio. “We believe the biggest levers they have to address today’s challenges are adopting AI to boost productivity, improving resident experiences through technology, and prioritizing safe and secure processes.”
Other takeaways from the 2024 AppFolio Property Manager Benchmark Report include:
- Property managers are turning to AI to drive productivity and deliver a better resident experience.
21% of property management professionals currently use AI, and28% more plan to adopt it. Resident communication is the most common use case for property management professionals currently using and planning to use AI, followed by data entry and leasing funnel optimization. - Property managers see flexible payment services as a way to improve resident experience without costly building improvements or new amenities. Property managers are increasingly offering financial flexibility payment solutions, including security deposit alternatives and flexible rent, to build loyalty among residents and ease friction in the leasing process. In 2024,
33% offered flexible rent solutions and25% security deposit alternatives; in 2023,14% and17% , respectively. The rapid adoption of these offerings speaks to renters’ changing expectations. In a 2023 AppFolio survey of renter preferences,40% stated that flexible rent is important when evaluating a new lease and47% stated security deposit alternatives was important. - As more payments and operational processes move online, data security is becoming top-of-mind for property managers. According to our report,
22% of property management professionals experienced security issues in 2023, compared to14% the year before, while44% are more concerned about this issue than they were a year ago.
The 2024 AppFolio Property Manager Benchmark Report reflects today’s shifting real estate landscape. For a more in-depth look, download the 2024 AppFolio Property Manager Benchmark Report.
Survey Methodology
AppFolio surveyed 5,350 U.S. based property management professionals with 50 or more residential units in their portfolio from November 16, 2023 to December 4, 2023.
About AppFolio, Inc.
AppFolio is the technology leader powering the future of the real estate industry. Our innovative platform and trusted partnership enable our customers to connect communities, increase operational efficiency, and grow their business. For more information about AppFolio, visit appfolio.com.
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/c0c52696-fab6-4e76-9432-26597c7dde10
FAQ
What are the top concerns for property managers in 2024 according to the AppFolio Property Manager Benchmark Report?
How many property management professionals are currently using AI according to the report?
What are the most common use cases for AI among property management professionals?
What percentage of property managers offered flexible rent solutions in 2024?
Why is data security becoming a top concern for property managers?
What is the trend in property managers' likelihood to raise rents without improvements from 2023 to 2024?
