“So many aspects of doing business look different than they did just a few years ago. But what hasn’t changed is companies’ determination to expand, though new tactics may be required in 2024,” the report says.
“Growth remains property management companies’ #1 priority for the sixth year in a row, followed by efficiency, as property managers search for effective ways to scale their operations as they expand.
“Also, 85% of third-party property management companies have expanded their portfolios in the last two years—the most growth they’ve reported in the eight years that we’ve run our survey.
“92% of those who manage other investors’ properties – called third-party property management companies – say they plan to expand their portfolios over the next two years, a rate that’s on par with 2022. Recruiting new, growth-oriented clients is the primary portfolio growth strategy among third-party management companies today.
“Companies that exclusively manage their own investment properties plan to grow at a slower pace in comparison with third-party property managers,” the report says.
5 Key takeaways from the report
- Property management companies are searching for new ways to grow as their plans for portfolio expansion outpace those of many rental owners, who are being held back from growing at their preferred pace by high property prices and interest rates.
- Rising costs continue to strain property management companies and their clients, from increased insurance premiums and property taxes to higher prices on materials and labor.
- Property management companies of all sizes are facing competition from real estate agencies dabbling in property management as the sales market has slowed.
- Companies are devoting more resources to resident retention as the rental market cools and the supply of new apartments grows. Property managers are searching for ways to improve the resident experience to hold onto their best renters, including providing high-quality services, renovating units, and limiting rent increases.
- Technology has never occupied a more pivotal role in property management companies’ operations—or in the employee and customer experience—than it does now.