Main Takeaway: It’s no surprise that as economic headwinds continue, operational efficiency and revenue generation are the two top priorities for property managers (PMs) according to a recent survey. If they haven’t already, this reality will push more owners, investors, and PMs to consider and adopt new technology solutions.
Story: The rapid shift in real estate market conditions, interest rates, and inflation have many PMs and investors worried about their investment and portfolio strategies. That said, a few recent surveys and studies show that sentiment in the market is still strong, albeit with shifting challenges.
Appfolio recently released its 2022 Property Management Industry Pulse report. In the report, Appfolio covers the top challenges facing PMs, what PMs are thinking about technology, and how they are leveraging digital tools to maximize revenue. In terms of ongoing challenges, here is what the PM respondents had to say about their biggest concerns:
Challenge #1 – Operational Efficiencies: According to the survey, the top challenge was HR and staffing in 2021, but this year PMs were most concerned about operational efficiencies. This includes finding high-quality vendors, increasing material costs, and freeing up their teams from labor-intensive tasks.
Challenge #2 – Rising Costs: Because of rising inflation and material costs, as well as labor shortages, the second-most concern of PMs was maximizing revenue. This was broken down in order of importance to PMs, starting with battling inflationary pressures, followed by maximizing marketing ROI, and then setting the strategic direction of their businesses.
Challenge #3 – HR and Staffing: Although lower on the 2022 list of challenges, PMs are still thinking about their staffing and HR challenges. The survey notes that PMs are most concerned about attracting new team members, managing demand for higher compensation, and reducing turnover.
Technology Imperative for Property Management
Finally, the Appfolio survey discusses technology with PMs. Although coming in fourth place in the top challenges, PMs may be missing the boat on the actual need for technology solutions in their businesses. Here’s what they had to say were the top challenges in the technology category:
The resistance to new technology is the most interesting component of this. The irony is that staff who are boots on the ground have a much more acute sense of business needs at a tactical level. According to one survey, “frontline staff…are 11 times more likely than executives to consider innovation/technology a top challenge, which means their potential struggles with the business’ technology may not be reaching decision-makers.”
The Appfolio report concludes that “this gap illustrates the divide between executives, who are hyper-focused on driving business results (nearly half of executives list either “maximizing revenue & profits” or driving “operational efficiencies” as their top challenge), and the frontline staff, who understand that they need boots on the ground and better tech to do so.”
We all need to be more open to adopting more technology in our businesses, and those who are boots on the ground are more likely to have a better understanding of resource needs.
Expert Take on Property Management
“Technological innovation and adoption is another big macro trend. And I think those two are really the big macro, then underneath that, there’s a thesis that develops, which is, “My rents are high, my occupancies are high, my costs are also probably pretty high. I’m starting to look at technology. How do I improve performance, customer experience, be competitive, deploy more capital, in order to be able to compete in this market as a housing provider? You know, I’m going to need to really focus on productivity and efficiency, because really, rents can only grow so fast and occupancies are only so high.” — Knock CEO Demetri Themelis