Last modified on February 15th, 2024
By Marc Frenkiel

To better understand what 2024 may have in store for the property management industry, AppFolio surveyed over 5,000 property management professionals to learn more about their sentiments and outlook for the coming year.

According to the data, optimism prevails. Eighty-one percent of property managers are confident about the state of their business in 2024, while 77% expect revenue to increase.

But this optimism is not without challenges. Here’s a peek at what you’ll find in the 2024 AppFolio Property Manager Benchmark Report.

Challenges

Navigating Higher Expenses

A comparison of data from 2023 and 2024 reveals a shift in strategies and priorities that reflects current market conditions. Inflation remains a top concern for many property managers in 2024. While the rate of inflation has decreased from what it was at this time last year, prices in key property management expense categories such as insurance, taxes, interest rates, and unit turns remain stubbornly high. Forty-six percent of the survey respondents cited inflation as a top concern this year.

Heightened Data Security Concerns

Data security and fraud prevention have emerged as critical concerns as the industry moves further into digital operations. The increase in online payments and processes heightens the risk of fraud, with a reported rise in the number of property managers experiencing fraud or security issues since 2023. Twenty-two percent of the survey respondents experienced fraud or security breaches in 2023 compared with 14% the year before, while 44% of the respondents are more concerned about fraud than they were a year ago.

Maintaining Occupancy Rates

Maintaining high occupancy rates has become more top of mind in 2024 as rental markets have become more competitive. Apartment List data suggests that the rental market has cooled because of easing demand. Household formation has stagnated in response to inflation and ongoing concerns about the economy. At the same time, supply is rising because of the historic multifamily construction boom that is underway (2023 saw the number of new multifamily apartment units under construction hit 1 million for the first time). Indeed, 35% of the survey respondents listed occupancy as a challenge in 2024 compared with 23% in 2023.

Opportunities

Enhancing The Resident Experience

Heightened competition in the rental market offers an opportunity for property managers to differentiate their properties from other managers’ by offering enhanced services and consequently fostering resident loyalty and filling vacancies faster. A notable strategy includes offering flexible payment options, such as security deposit alternatives and flexible rent, which have seen a growing demand among residents. The 2024 Benchmark Report found large year-over-year increases in the number of property management professionals offering these flexible payment solutions.

AI For Efficiency

AI presents a promising avenue for improving operational efficiency. Property management respondents experimenting with AI report higher expectations for net operating income in 2024. AI applications in areas such as resident communication and administrative tasks (data entry, work order management, and data analysis) can streamline operations, reduce errors, and free up time for customer service.

Investing in the right AI use cases can yield major efficiency gains while also benefiting both the wider property management team and residents. For example, resident communication is a natural fit for AI optimization. Forty-four percent of property managers that are currently using AI are using it for resident communication. Generative AI tools can enable more efficient and consistent resident communication about a variety of subjects, including maintenance issues and payment reminders. Improved resident communication can help boost renter satisfaction and build loyalty while creating more efficient workflows for managers.

Check out the 2024 AppFolio Property Manager Benchmark Report to uncover all its data-backed findings and insights so you can compare your outlook with that of your peers and put trends that you may not have been aware of on your radar.