2019 Real Estate Industry Report for Residential Property Managers

We are in the midst of the 4th Industrial Revolution. Technology is changing the way we live, work and interact at an unprecedented scale. To learn more about property managers’ goals and struggles in the modern economy, AppFolio and John Burns Real Estate Consulting surveyed more than 500 property management professionals to bring you data-driven insights on the state of the industry.

This report covers:

Key Growth Inhibitors

The Need for Strategic Focus

Adopting New Processes

New Standards in Service

Emerging Market Trends

The data collected indicates:

  • Property managers struggle with personnel and human resources challenges as they strive for growth.
  • Delivering excellent service is a primary goal of property management yet most find it difficult to access data and insights on the properties they manage.
  • A lack of modern technology and standardized processes, high employee turnover, and growing competitive pressure hamper the growth of property management businesses.

Key Growth Inhibitors

KEY TAKEAWAY
95.5% of respondents want to add units in the coming year, and they identify issues around employees and out-of-date processes as the major obstacles standing in their way.

What factors are inhibiting your company’s growth?

Ability to hire employees with needed talent/skills
0.0%

Staffing - a company is only as good as its people, and 45.3% of property managers struggle with hiring qualified employees. It's vital to build a strong team that can keep up with the pace of technology and have excellent customer relationship skills.

Too many manual processes
0.0%

Doing Things the Old Way - The lack of automation is slowing the growth of 35.1% of property management businesses. Too much time is spent with pen, paper, and spreadsheets instead of letting modern technology take the load off employees.

Internal training for employee retention
0.0%

Problems with Training - 30.4% of respondents identified training as a key growth inhibitor. Time spent training eats into time spent growing the business. Consider how many hours employees spend ramping up on important workflows, and evaluate how to leverage technology to guide processes and save time.

Employee ramp-up time
0.0%
Lack of specialized management skills
0.0%
Retaining existing tenants
0.0%
Attracting new tenants
0.0%

Attracting and Retaining Renters - 30.1% of property managers see problems with attracting and retaining renters. The Gen Z demographic will be the next wave of tenants, and property managers will have to adapt. Gen Z will expect certain things—whether it’s top-of-the-line amenities, increased leasing functionality, or improved communication. While there are many reasons for rental turnover, level of service plays a huge role in how long renters stay, and how often they recommend your properties.

Transparency of operational aspects to the business
0.0%
Regulations affecting business operations
0.0%
Lack of competitive edge in industry
0.0%
Inability to effectively monitor industry trends
0.0%
Lack of accessibility to new technology
0.0%
Access to basic physical resources (e.g. office space)
0.0%

What are the primary challenges you face in regard to managing leads and property inquiries?

Quick turnaround responding to leads
0.0%

The Desire For Timely Responses - While property managers know it’s important to respond quickly to leads, they continue to struggle to do so. Slow response times can create a negative customer experience from the prospective renter’s initial interaction with a business. Renters expect instant service and will opt to do business with companies that consistently provide it.

Staff training on qualifying leads and prospects
0.0%

Training Falls Short - Lack of trained staff has a negative impact on the ability of property managers to qualify leads and prospects. Streamlined training and self-guided resources built into software can fill this gap.

Accurately gauging interest level of potential resident
0.0%

Serious Inquiries Only - Pre-qualifying leads before reaching out to them is a huge time saver. Unfortunately, this is a challenge for property managers today. One solution is built-in guest cards on your property’s website that enable you to automate responses and collect resident data online, making inquiries easy to sort and manage.

Keeping individual notes about leads and prospects organized
0.0%
Lack of enough staff to keep up with volume efficiently
0.0%
Tracking ROI on marketing efforts
0.0%
Tracking the source of the interest
0.0%
Establishing nurturing campaign to move leads through the sales cycle
0.0%
High staffing turnover rate
0.0%
Having access to effective customer relationship management (CRM) tool
0.0%

The Need for Strategic Focus

KEY TAKEAWAY
As competition heats up and it becomes more important than ever to attract and retain loyal customers, focusing on strategy will be necessary for success.

What is the biggest challenge you’re currently experiencing?

Lack of time to focus on business strategy
0.0%
Manual processes
0.0%

Too Much Time Spent on Manual Processes - According to the survey, 18% of property managers spend too much time on manual processes, which gets in the way of more strategic thinking. Automating day-to-day tasks can free up time to focus on the future.

Managing maintenance
0.0%

Maintenance Management Is a Time Sink - Managing maintenance was identified by 17% of respondents as their biggest challenge. Maintenance is commonplace in property management, but unexpected issues can take time out of the day and inefficient service can be detrimental to the renter experience. Utilizing mobile technology can greatly free up time for property managers and vendors, while allowing them to provide improved service to renters.

Hiring the right employees
0.0%

Finding the Right People for the Job Is Difficult - Happier employees equal happier customers. Unfortunately, the property management industry has a very high turnover rate, and 13% of respondents are experiencing challenges in hiring the right people for the job. Today’s tech-savvy job seekers appreciate easy-to-use, modern technology that helps them to be efficient.

Other
0.0%
Meeting customers’ expectations
0.0%
Limited visibility into the performance of teams and properties
0.0%

Adopting New
Technology &
Standardized Processes

KEY TAKEAWAY
90.8% of respondents say standardized processes are important, but only 44.8% say they are currently using them effectively.

What is your organization’s level of comfort with adopting new technology?

Very comfortable
0.0%
Comfortable
0.0%
Somewhat comfortable
0.0%
Somewhat uncomfortable
0.0%
Uncomfortable
0.0%
0%
Comfortable with Adopting New Technology - The data tells us that 77.7% of property managers are open to adopting new technology. This is an encouraging sign for the real estate industry as a whole, considering the increasingly rapid pace of technological development.

How important are standardized processes for employees in your organization?

Very important
0.0%
Important
0.0%
Neither important nor unimportant
0.0%
Unimportant
0.0%
Very unimportant
0.0%

The Confidence Conundrum

0%
90.8% of respondents say that standardized processes are important.
0%
Only 44.8% say they are certain that their employees follow standardized processes efficiently.

Stellar Experience
is the New
Standard for
Service

KEY TAKEAWAY
69% of respondents want a service-oriented culture, but only 38% are prepared to establish one.

What is your current top business goal?

Consumers have high expectations when it comes to service and the quality of interactions. This is particularly evident in the real estate industry, which historically reacts more slowly to market changes than other industries. Property management professionals are starting to recognize the importance of becoming customer experience managers.

In a mobile-first, on-demand economy, businesses need to boost their customer experience strategy to meet the expectations of today’s customer and gain a competitive advantage. A strong company culture will not only attract loyal employees, but owners and renters as well.

Deliver excellent service to customers
0.0%
Increase operational efficiencies
0.0%
Provide accurate and clear reporting to owners
0.0%
Increase revenue by growing units
0.0%
Keep 100% occupancy
0.0%
Other
0.0%

The Gap between “Wanting to” and “Doing”

0%
69% of property managers believe that establishing a service-oriented culture would have a positive impact on their business.
0%
Only 38% say they are prepared to establish a service-oriented culture.

Emerging
Market Trends

KEY TAKEAWAY
On average, 84% of respondents say these emerging market trends will impact their business. Yet, only 30% of respondents say they are prepared to deal with them.

Trend 1 - Industry Consolidation

Property management firms are acquiring one another, resulting in fewer and larger companies.

Will have an impact on my business
0.0%
Will have no impact on my business
0.0%
0%
31.1% of respondents say they feel prepared to deal with this trend.

Trend 2 - Establishing a Service-Oriented Company Culture

Creating a company culture based on excellence in tenant/resident service.

Will have an impact on my business
0.0%
Will have no impact on my business
0.0%
0%
38.4% of respondents say they feel prepared to deal with this trend.

Trend 3 - Utilizing Advanced Analytical Tools

Using sophisticated tools to develop business intelligence and visualization.

Will have an impact on my business
0.0%
Will have no impact on my business
0.0%
0%
28% of respondents say they feel prepared to deal with this trend.

Trend 4 - Competition from Big Investment Firms

Large firms doing their own rehab and maintenance are entering the market.

Will have an impact on my business
0.0%
Will have no impact on my business
0.0%
0%
23.6% of respondents say they feel prepared to deal with this trend.

Trend 5 - New Approaches in Tenant Acquisition

Practices such as 24/7 access to property viewing are increasingly common.

Will have an impact on my business
0.0%
Will have no impact on my business
0.0%
0%
26.7% of respondents say they feel prepared to deal with this trend.

Trend 6 - Shrinking Inventory

Current inventories of for-rent product are undergoing steady reduction.

Will have an impact on my business
0.0%
Will have no impact on my business
0.0%
0%
32.4% of respondents say they feel prepared to deal with this trend.

Trend 7 - Adding Construction, Rehab, and Maintenance Services

Adding services beyond management grows revenue with fewer doors.

Will have an impact on my business
0.0%
Will have no impact on my business
0.0%
0%
31.3% of respondents say they feel prepared to deal with this trend.

Trend 8 - Investors Have Increased Expectations

Investors expect detailed performance and financial information to be available online.

Will have an impact on my business
0.0%
Will have no impact on my business
0.0%
0%
30.3% of respondents say they feel prepared to deal with this trend.

Technology for the Modern Economy

Your customers expect self-service, mobile service experiences--are you equipped to meet the demands of today's renters? With AppFolio Property Manager, discover the difference that intuitive technology will make for your business.

Leveraging the latest advancements in technology, ramp new employees in less time, automate business processes at scale, and boost team performance. Access real-time data insights and spend more time focused on the future in order to realize your goals as a modern business, while delivering extraordinary service experiences for your customers.