Ready to build on the successes you’ve achieved in 2024? Most property management companies and professionals take a bit of time at the end of each year to prepare for new business strategies, goals and trends.
It’s understood that a lot will remain unchanged in 2025. While financial challenges persist, property management companies will continue to leverage technology and seasoned staff members to increase revenue and maintain growth rates.
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Given how turbulent the last couple of years have been, companies may choose to make safer choices and set modest goals to ensure they will generate enough revenue to maintain operations without overextending. They plan to use existing relationships, and delegate complex tasks to other professionals in order to secure competitive prices and deliver results that keep clients happy.
Top goals for 2025
If you care for a governed community, the chances are high that these things are ranked high on your list of goals.
#1. Growth
#2. Efficiency
#3. Residents
Modest portfolio growth
Most property management businesses plan to expand their portfolios in the next two years. However, growth rate plans have been altered to reflect financial challenges. Everything costs more, and as a result, some would-be clients looking to save money will hold off on hiring a manager.
According to one report, 50% of property management companies plan to expand between 1% and 25%. This is a slower rate of growth than what companies projected in 2022 and 2023.
In order to continue growing, most property management companies intend to attract new clients by:
- Offering their services in new regions or cities
- Exploring opportunities to partner with developers
- Purchasing other property management companies
Companies operating in multiple metro areas were able to achieve growth this past year, while the number of smaller companies shrank. Larger companies may have an easier time staying profitable simply because they have more resources, and can acquire small companies.
Improved efficiencies
Since management companies anticipate slowed growth, they will look for ways to increase performance and optimize processes. This will help them achieve more with the same resources, and ultimately allow them to generate more revenue. Technology is a key strategy when it comes to increasing efficiencies because it is cost-effective, and can be used for multiple scenarios.
Residents
Growth will be hard to achieve if property management companies lose as many clients as they gain. Managers must not lose sight of resident satisfaction. That often means keeping lines of communication open. Managers can also use software to share information with residents, and empower them to make payments or reservations on their own.
Reasonable revenue growth
Of course the purpose behind growth is to generate more revenue. Much like their attitude towards growth, companies are planning on modest revenue growth.
84% of property management companies report that their revenue increased over the last two years. This represents slightly less growth than what was reported in 2023, but companies are still growing at a pace that exceeds growth recorded between 2017 and 2021.
91% of companies anticipate some revenue growth in the next two years, even if that number is modest. They will do the following to increase revenue:
- Cut costs wherever possible
- Use technology to streamline processes
- Raise management fees
- Offer new services
Top trends for 2025
Property management companies can capitalize on some of these trends in order to increase revenue and/or maintain positive relationships with clients.
Finances are influencing decisions now more than ever
Money has been a key concern for everyone, and costs will continue to be a major deciding factor when it comes to purchasing goods and services.
Property managers may raise their rates in order to retain and compensate their staff and support high standards of service, but they are aware that their clients will only tolerate modest rate hikes.
Companies that can find ways to save their clients money, including negotiating competitive rates for third-party services, will dramatically reduce their chances of being let go.
Automating processes that were once done manually
Considering the ongoing talent shortage in the property management industry, staff simply don’t have time to fill out and file forms or chase residents for checks.
Automating repetitive processes to reduce expenses and unlock higher profits (think online payments, maintenance requests and reservations) – it’s a win-win situation.
It also becomes easier to keep up with maintenance work and similar tasks. For example, by using a software program to schedule preventive maintenance ahead of time, admins can easily see when important work needs to be performed, and help keep expenses lower. Preventive maintenance has been proven to help prolong the useful life of costly systems and components.
Communities that haven’t used software before may be hesitant to try it out. However, the benefits undoubtedly outweigh any drawbacks. Listen to concerns and answer questions. It often helps to share an anecdotal story about another client who saved money or increased resident satisfaction as a result of property management software.
Artificial Intelligence
There is still a lot of potential to unlock when it comes to artificial intelligence. Right now, it’s estimated that roughly 20% of property management companies are using AI within their business.
The most common uses involve generating auto-responses to confirm receipt of resident inquiries, and answering incoming questions submitted through the company website with chatbots.
We expect to see additional use cases as AI becomes more ubiquitous and user-friendly.
Responsibilities are being delegated to other professionals
Management companies are less inclined to try and do everything themselves. Knowledge-specific tasks, such as complex accounting or legal matters, are being redirected to experts.
While it costs more to hire a professional, the job is completed in less time, and done right the first time.
Unsurprisingly, accounting and finance teams are reporting that they are taking on new responsibilities, including strategic advisory roles and providing insights that drive growth. 87% of accounting and finance leaders assumed new job duties in 2024, including data analytics (49%), financial technology integration (47%), and business process optimization (35%).
Skilled professionals are prepared to work with software and provide data; it’s these types of in-demand services that will help keep them in business. By outsourcing specialized work, managers are likely to get better results for their clients.
Human connections are key to differentiating companies
Software and AI can do wonders for a property management company, but technology will not make up for poor customer service.
Likeability matters. Clients still prefer to see managers on the premises. They would rather work with individuals who remember they have a golden retriever or are passionate about tennis.
Balancing technology with a human touch will help distinguish companies from their competitors and help foster loyalty.
Vendor relationships must be nurtured
If you have a reliable plumber or electrician who completes work for a fair price, do everything reasonably possible to keep that connection. Good service providers are hard to find, and one big reason why community associations like working with property managers is that they know management companies can secure better rates for maintenance and repairs.
Payment automation tools that integrate with an online vendor management platform can secure or strengthen relationships by providing self-service access to invoice status and credentials, simplifying reconciliation, and supporting better cash flow management. Vendors are happiest when they are paid on time.
Conclusion
Though no one can predict the future, it appears as though 2025 will provide an opportunity for businesses to stabilize. Property management companies are in a good position to achieve modest growth.
Existing clients will be looking to cut costs, but will hold on to staff who can demonstrate their value. As always, communities will pay for good service. Quality customer service, combined with property management software, will enable property management companies to help their communities and their businesses simultaneously.
