There has never been a better time to be in the property management industry. With high growth projections, profitability, and overall job satisfaction amongst property managers, the outlook heading into the new year is a positive one. However, like any business in any industry, there are pain points and areas for improvement that need to be addressed, too.
To take a temperature of the industry, Buildium in partnership with The National Association of Residential Property Managers (NARPM) released the findings from their joint survey, “The 2016 State of the Property Management Industry Report: Focusing on Growth in a Thriving Industry.” The report, which surveyed nearly 1,500 property managers across the United States in June 2016, explores the most common and most effective practices in the property management industry.
The report found that despite record growth, many property managers still struggle with finding and keeping reliable contractors and vendors, generating new leads and growing their portfolios, and effectively managing their time, processes and employees. The research aims to highlight the attitudes, behaviors and beliefs that are most likely to combat these challenges and help property managers achieve business success.
Here are some of the key findings from the report:
Mixed Portfolios Have the Edge
Property managers have a range of portfolio types, but mixed portfolios were most likely to report high profitability (54 percent), compared to self-managed portfolios (50 percent) and third party portfolios (48 percent). Further, self-owned portfolios experienced 70 percent growth in the last two years, with mixed portfolios growing 83 percent and third party portfolios growing 77 percent in the same time period. In part, this may be attributed to the capital outlay required to grow self-owned portfolios, but nonetheless, a mixed portfolio seems to be most healthy recipe for growth.
Growth is Good…
2016 has emerged as a high-growth cycle for the property management industry, with 77 percent of respondents indicating they’ve grown their portfolios over the last two years, and 89 percent expecting their portfolios to continue to grow over the next two years. What’s more is that half of the respondents reported that their business is extremely profitable, while only two percent indicated that they were not profitable.
…But There Are Still Pain Points
Property managers continue to face day-to-day challenges, despite record growth, with the majority of respondents (38 percent) citing finding and keeping reliable contractors and vendors as their top challenge. Finding new leads (37 percent), managing time and employees (29 percent), attracting and managing great tenants (23 percent), and handing inspections and maintenance calls (22 percent) round out the top five property management business challenges.
Business challenges are also often dictated by what services property managers provide – tenant screening (90 percent), maintenance (85 percent), leasing (85 percent), listing services (85 percent) and financial reporting (80 percent) were all included in the top five offered services in 2016
Communication is Key
When asked what has had the greatest impact on business success, an overwhelming number of respondents (60 percent) cited excellent communication skills and following up.Organizational skills (35 percent), hiring the right employees (32 percent), and embracing technology and innovation (30 percent) came closely behind.
Tech is Top of Mind
In addition to those property managers who identified technology as a key differentiator, 88 percent of survey respondents revealed they are already using a dedicated cloud-based technology solution to help them run their business. To some extent, this reflects the connected nature of online survey takers, but it is also a clear sign of the growing ubiquity of technology in property management. Of the four percent of respondents who are not already using property management software, half said they would like to be.According to the respondents, the two top-rated solutions for property managers were Buildium and Appfolio.
Job Satisfaction is High
In addition to healthy business growth projections, property managers are also very happy with their jobs. More than 25 percent of respondents said they have no frustrations with their portfolio owners and 95 percent said they always or sometimes love their line of work.
With these insights directly from property managers themselves, they can more effectively manage day-to-day tasks, better service tenants and clients, and adopt solutions and processes – like property management software – that deliver direct value-add benefits to their businesses.