The majority of rental owners surveyed in 2022 said that they’re struggling to stay in the black, Buildium says in a new survey.
And, just one in three small-portfolio rental owners report that their properties are consistently profitable.
“They need the professional services (and expertise) of property management companies. But that’s not all our research shows,” Buildium says in the report titled Opportunities for Property Managers in Rental Owners’ Shifting Needs. The study was done by Buildium and Propertyware, both RealPage companies, and the National Association of Residential Property Managers (NARPM).
More small-portfolio owners are turned to professional property management going from 55 percent using professional management before the pandemic to now 63 percent.
Why the change?
The pandemic-era rental market has complicated the business of owning rental property, from increased regulations to inflated costs, supply chain delays, and labor shortages, Buildium says.
As a result, rental owners of all experience levels are turning to property management companies for assistance with regulatory compliance, resident management, maintenance and repairs, and more—which makes particular sense when you consider that nearly two-thirds of owners don’t live near their rental properties.
What Type Of Landlord Hires A Property Manager?
Today, 76 percent of rental owners consider themselves investors, while just 24 percent identify as accidental landlords.
However, accidental landlords may appear to be more prevalent within property managers’ client base because they’re still the most likely to seek out their services: 71 percent of accidental landlords currently have a property manager, in comparison with 62 percent of Intentional Investors and 59 percent of unintentional investors.
What Are The Three Types Of Rental Property Owners?
- Intentional Investors acquired their rental property as an investment from the start. They represent 52 percent of today’s rental owners—an increase of eight percentage points since 2018—marking a high point for this type of investor within the population of small-portfolio rental owners.
- Unintentional Investors came to own rental property due to circumstance, but they now consider themselves investors. They comprise 24 percent of small-portfolio rental owners—a number that’s stayed relatively stable over time—but 2022 is the first year in which this group is as prevalent within the rental owner population as Accidental Landlords.
- Accidental Landlords came to own their property due to circumstance, and they don’t consider themselves investors (though some make the transition from Accidental Landlord to Unintentional Investor). They represent 24 percent of today’s rental owners—a decrease of eight percentage points since 2018, and five points in the last year alone.
The Stress of Rental Property Ownership
Rental property owners who work with a property manager to run their rentals are less stressed than owners who attempt to do so on their own by a full 16 percentage points, the survey says.
Another one in four owners with a property manager report that they didn’t experience any stress related to their property in the last year, in comparison with just one in 10 owners who run their properties on their own.