Casa Realty Group LLC

Explore The Top Challenges — And Solutions — Facing The Property Management Industry In 2023

September 25, 2023


Last modified on September 24th, 2023
By

AppFolio recently sponsored a National Apartment Association (NAA) survey of over 2,000 property management professionals to uncover their most pressing challenges. The resulting report — the 2023 Property Management Industry Pulse — delves into these challenges and the solutions being deployed — as well as industry needs, short-term outlooks for staffing and net operating income, strategies companies are using to prepare for a potential economic slowdown, and other long-term issues facing the industry. Here’s a sneak peek at what you’ll find.

Top Industry Challenges, 2023 vs. 2021

Comparing the top three challenges to the same survey conducted in 2021 highlights how much has changed in just 18 months. 

In 2021, HR, staffing, and recruitment was by far the number one challenge, capturing 74% of responses, making it the top property management challenge for that year.

This year, however, inflation is top of mind. The number one challenge in 2023 is operational efficiencies, comprising 76% of responses, followed by maximizing revenue and profits (61%). HR, staffing, and recruitment took the number three spot with 42% of survey respondents listing it as a top challenge.

Top Challenge #1: Operational Efficiencies

Within the category of operational efficiencies, the most challenging activity was reducing costs. The next three challenges were finding high-quality suppliers, effectively keeping track of projects and suppliers, and freeing up teams from labor-intensive processes. 

Technology is playing a major role in terms of how industry leaders are solving operational challenges. Actions cited by survey respondents include automating administrative tasks, centralizing the entire prospect life cycle, firming up internal systems, leveraging data-driven recommendations, and empowering leadership teams to make decisions.

Top Challenge #2: Maximizing Revenue and Profits

Inflation also appeared in the maximizing revenue and profits challenge, with navigating rising inflation pressures as the number one activity. Increasing occupancy rates and retaining current residents came in second and third — no surprise in a period of cooling demand amid rising costs. 

To combat inflation pressures, the data shows that some of the tactics that property management companies are using include focusing on top-line revenue, negotiating with suppliers, adjusting bonus programs, or changing suppliers altogether. Others are using incentives for onsite teams, including maintenance employees, and tying bonuses to resident retention. 

Top Challenge #3: HR, Staffing, and Recruitment

HR, staffing, and recruitment, which garnered 51% of the responses for the number one challenge in 2021, saw no change in the ranking of the most challenging activities in 2023. Attracting new team members, training new hires quickly, and reducing employee turnover were top challenges in both years. 

Inflation also made it into this challenge, with demand for higher compensation tied for third place with retention strategies to reduce turnover.

Many respondents identified positive workplace culture as a way to solve recruiting and retention challenges. On the compensation front, significant increases during the past 18 months were cited, as were loyalty bonuses. 

Survey participants were asked to describe their company’s staffing and recruiting outlook for the next 12 months. Executives were more optimistic about hiring compared to all responses, with 55% saying they planned to add team members while 40% were focused on maintaining the current headcount. Just 2% were considering layoffs, and the remainder were uncertain.

Affordable Housing Responses

Affordable housing providers were asked to rank an additional series of challenges. The top three challenges this cohort reported were complying with regulatory agency reporting requirements and audit requirements; monitoring local, state, and federal program rules and regulations; and collecting rent.

In terms of solving challenges, more respondents reported having full-time compliance specialists on staff compared to outsourcing those tasks. Consistent and frequent training, including cross-training, and setting up automated notifications to immediately learn about any program changes are other methods respondents employ to deal with challenges. The importance of communication across all parties involved — residents, on-site teams, compliance specialists, and program administrators — was also named as a key to success for this often complicated property type.

The data points and solutions discussed in this article are just a preview of what you’ll find in the NAA 2023 Property Management Industry Pulse sponsored by AppFolio. For more, you can check out the full report here.

 



Source link

Posted in Property Management
Write a comment