Published on July 24th, 2025
By Elizabeth Millar, Rae Parker

In today’s world, property management businesses are required to store much more data than in the past and are more dependent on that data to run their operations. Because the technology your business uses to collect and store data plays an important role, it’s imperative that you have a trusted software partner that is savvy and stays ahead of bad actors by proactively implementing security measures. 

Hackers would love to get their hands on the sensitive financial information property management companies collect from renters, owners, and vendors. This can include bank account details, Social Security numbers, and more. The mishandling of this data can lead to a number of problems, such as financial losses, legal issues, and reputational damage.

Recent findings from the 2025 AppFolio Benchmark Report, which surveyed over 2,000 real estate professionals, highlight the growing urgency for stronger fraud prevention and data security in the real estate industry. According to the report, 79% of professionals experienced payment fraud issues, while 88% faced data security challenges. Compared to 2024, 37% of respondents reported increased concern about data security, giving a clear indication that threats are evolving and becoming more top-of-mind.

With society rapidly becoming more digitally advanced, AppFolio knows and understands the responsibility of ensuring our customers and their communities feel protected and confident with their data practices. To protect your property management business’s data, you must be familiar with common risks and best practices to reduce your vulnerability. By understanding the common risks associated with fraud and data theft and implementing best practices for protecting digital assets, you can reduce the chances of an attack on your business’s sensitive information. 

While this article contains helpful information, we are not providing legal advice, and you should be sure to consult a qualified attorney for any specific questions about protecting the data and digital assets of your business.

Common Threats To Be Aware Of

As digital technology evolves, so does the threat of data theft and other malicious attacks. Property management companies can be attractive targets because they store key information that hackers are after, including client and customer payment information. Below are ways in which your business could become vulnerable to breaches:

Phishing Scams

Phishing scams are a common tactic hackers use to trick individuals into providing sensitive information. Typically, phishing attempts involve emails from a sender that may seem legitimate, asking you to click on a link, share a password, or download a file in an attempt to steal your personal data. Despite email providers’ improvement in detecting phishing messages, hackers have resorted to alternatives such as social media, text messaging, and phone calls to gain access to your sensitive personal and financial information. 

Ransomware

Hackers may use ransomware (malicious software) to attack a network and demand payment in exchange for ceasing their activity, restoring access to the system, or preventing the release of stolen information. This breach can occur when an email with a malicious file is sent from a common or similar name as a partner, vendor, or coworker. Once the email is opened and action has been taken, the hacker has access to and control over your company’s systems and can use your data as leverage to release sensitive information unless a ransom is paid.

Human Error

Simple yet costly mistakes made by employees can contribute to data breaches. According to a study by Mimecast, human error was responsible for 95% of data breaches in 2024, driven by insider threats, credential misuse, and failure to follow cybersecurity protocols. Other common types of human error data breaches result from stolen credentials or employees failing to adhere to established company cybersecurity measures.

Best Practices To Follow

Complacency is almost as dangerous as putting out a sign that your data is available. To keep your business and assets safe, here are some best practices to consider implementing:

Provide Employee Training

Ensure employees are fully educated on how to spot phishing and ransomware attacks. One way to do so is by providing consistent training that gives employees the tools to identify common data threats, understand the risks they pose to your organization, and respond if one occurs. Additionally, check with your property management software provider for training resources — AppFolio offers customers self-serve resources such as live sessions, self-directed guides, and help articles on a wide range of topics.
Pro Tip: Educate tenants on the importance of protecting their login credentials.

 

Ensure Proper Data Storage

Be sure to schedule regular backups of your data — either manually or with automated backup tools. Encourage employees not to store password lists, financial data, and other sensitive information in their email or shared drive storage. It’s always smart to use strong and unique passwords and avoid sharing them with colleagues or writing them down to prevent wandering eyes.
Pro Tip: Use strong, unique passwords and update them regularly and enable multi-factor authentication for all accounts.

Choose A Reliable Property Management Software Provider

Having a reliable property management software provider that can help you manage your data safely and securely is paramount and an important factor to consider when evaluating your current or new provider. When it comes to securing and protecting your financial data, AppFolio Property Manager takes this responsibility seriously and runs in a state-of-the-art data center and network, ensuring the highest levels of security available today. We also offer payment solutions for residents that prioritize security when making payments. Our accounting system allows you to set custom user permissions for specific users with the right level of access. Additionally, we make significant investments to protect your business from risk by monitoring transactions in real time with protections in place in case of anomalous/suspicious behavior and have mandatory two-factor authentication for all user types. 

When it comes to data security, especially with prospective residents, AppFolio’s anti-fraud solutions help minimize risk at every step of the application process. With FolioScreen™ Trusted Renter Income Verification, applicants can verify their income by connecting directly to their bank account or payroll provider, eliminating the need for manual uploads or emailed financial documents. This not only reduces the risk of fraud through altered PDFs or falsified statements, but also ensures that sensitive financial data isn’t being stored or handled by your team. If applicants choose to upload a pay stub, FolioScreen will automatically verify its authenticity with Document Verification.
Pro Tip: When evaluating a property management software provider, ask how often their security protocols are updated, and whether they offer real-time monitoring to catch threats before they become problems.

 

Our industry has changed significantly within the last decade, and in order for your business to thrive, there is no room to forfeit revenue or resources due to fraud incidents. With the right security measures in place, you can protect your business from costly cybersecurity incidents and maintain peace of mind when it comes to protecting your digital assets.

Our 2025 Property Management Benchmark Report outlines how enhanced screening processes, secure technology adoption, and clear governance practices, particularly around AI tools, can safeguard sensitive information and improve fraud prevention. In the meantime, by following these best practices and investing in cybersecurity solutions, property managers can ensure the safety of their valuable data, reduce the chances of becoming a target for malicious attacks, and protect both business operations and resident trust.