Published on May 21st, 2025
By Daniel Waas
I recently asked a group of property management executives what “performance” means to them and how they achieve it.
Their answer surprised me. And not in a good way.
Invariably, the response was some version of “We are constantly improving how we operate.”
Almost every KPI mentioned was an operational metric: lead-to-lease conversion, turn time, labor efficiency, renewal rate, maintenance efficiency, and so on.
So, how is being an efficient operator a problem?
It’s a problem because it keeps you narrowly focused on tasks. That means you:
- Spend too much time in the weeds rather than examining the big picture
- Are focused inwards on your process, instead of outwards on your customer
- Are preoccupied with cutting costs when you could be growing revenue
- Risk being caught off guard by how quickly AI will actually transform operations
To be fair, these points weren’t lost on the business owners, Ops VPs, and VPs of Property Management I spoke to. Every one of them understands the importance of a great resident experience, of strong returns for investors, and of the need to grow their business. Yet somehow, task efficiency seemed to be their hammer of choice for all these nails.
It’s a prolonged reaction to the market forces that have impacted real estate over the past few years:
External forces like high interest rates, inflation, growing resident expectations, increasing vacancy rates, and limited rent growth.
And internal challenges that have been plaguing our industry for too long: siloed data, legacy technology, disparate proptech, your teams’ resistance to change, and the reality of the never-ending to-do list that is property management.
Enter The Performance Gap
The performance gap is the combination of external and internal forces that keep you stuck in a reactive, task-based management mode.
It’s the gap between the operational performance you are focused on today and the real performance outcomes you owe your clients and yourself: a great place to live for your residents; a great return for your investors; and a growing, successful business for you.
Why the Performance Gap Exists
The uncertainty in the market is one obvious reason, but the roots of the performance gap go deeper. Traditional property management software was built to turn paperwork into digital work, not to drive performance.
As my colleague and VP of Product at AppFolio, Cat Allday, puts it: “Our industry as a whole is subscribed to an outdated paradigm: task-based property management.” (I encourage you to read her full piece on LinkedIn).
And as Donna Smith, President of Real Estate Management at Enclave, points out in response, the strategy you’ve built to drive operational excellence is not what will drive customer value. It’s time to think about how you can create value.
“Everyone has a well-defined strategy for operational excellence in the post-COVID era — leveraging centralization and emerging technologies. But how many of us have a strategy that’s equally clear when it comes to driving real value creation?”
The performance gap exists because our industry’s legacy tools were built to solve the old problem—digitizing tasks—and are ill-equipped to solve the new problem: creating the customer value that drives performance.
Five Signs You’re Stuck in the Performance Gap
What’s your take? Are you stuck in the performance gap? Here’s a half-serious, non-exhaustive list of signs you might be operating inside the gap:
- Your team spends more time fighting fires than preventing them
- You rely on a mix of overlapping point solutions for key workflows
- Growing units requires you to grow headcount
- Your data is all over the place or tucked away in a data lake that few can access
- Your residents feel stalled instead of served
- You pull up reports when investors ask about performance
How Will You Close the Performance Gap?
Closing the performance gap is not just about using better tools; it’s about transforming the way you operate. It’s about creating an environment where your teams can focus on strategic initiatives, residents feel valued, and investors see tangible results. By addressing the root causes of the performance gap, you can build a business that not only thrives today but is also poised for sustainable growth in the future.
We’d love to be your partner along the way. At AppFolio, we’re committed to closing the performance gap, so you can manage less and perform more.
So let us know where your head is at and come meet us at NAA Apartmentalize next month.
Comments by Daniel Waas