Rental Housing Top Challenges and Needs
In 2021, a co-partnered survey by AppFolio and NAA revealed that the top challenges facing property management companies centered around HR, staffing, and recruitment.
But 2022 has seen a shift in these top challenges. This has been brought about partly by rising inflation but is also due to global supply chain disruption resulting from the pandemic and global conflict causing commodity prices to soar.
To understand how these forces have impacted property management, AppFolio conducted a new survey to uncover the top needs in the rental housing industry and explore leading solutions to address these challenges.
Operational Efficiency is the top challenge for property management businesses in 2022
The top challenge in 2021 was HR, Staffing, and Recruitment, followed by Operational Efficiency. In 2022, that’s changed. Operational Efficiency is now top of mind for property management companies, and within that category the second most challenging aspect in 2022 is increasing material costs, which can be largely attributed to inflation.
Reducing overall costs was the third most pressing challenge within Operational Efficiency in both 2021 and 2022, especially in regard to increasing energy prices.
Maximizing Revenue and Profits is the second most pressing challenge in 2022
This was the third most pressing challenge for property management companies in 2021, and this rise in ranking is understandable in light of rising operating and financing costs. Indeed, the top challenge within Maximizing Revenue and Profits was navigating rising inflation pressures.
HR, Staffing, and Recruitment
While no longer the most pressing challenge for property managers — as it was in 2021 — HR, Staffing, and Recruitment remains a top-three challenge for the industry. Larger businesses, however, still view this as a top challenge, mainly due to having larger teams and more specialized (and thus harder) roles to fill.
Technology and integrations
Implementing New Technology and Innovation was the fourth most challenging aspect of property management in 2022. The top challenges reported within this category were Resistance to Change and Building Systems that Enable Growth.
Resistance to change was actually the lowest ranked challenge in the 2021 survey. As COVID-19 greatly accelerated the adoption of new technologies, perhaps property management companies that only recently adopted new systems aren't yet ready for a change.
Seniority level and portfolio type matter
Property management executives reported their top challenge to be Maximizing Revenue and Profits (31% of executives answered this way). The top challenge for frontline staff is HR, Staffing, and Recruitment (26% of frontline staff answered this way).
The biggest discrepancy between these groups was Implementing New Technology and Innovation, which was chosen by 11% of frontline staff as the top challenge and only 1% of executives.
Meanwhile, multifamily rental businesses are much more challenged by HR, Staffing, and Recruitment, while single-family rental businesses were more likely to view Operational Efficiencies and Stakeholder Experience as top challenges. This is likely because MFR businesses tend to be larger with more employees, while the scattered nature of SFR units creates unique operational and residential communication challenges.
Technology’s ability to address these challenges
AppFolio’s survey found that property management firms feel that there is room for improvement in how technology helps address their top challenges. Results show that 40% of respondents are not satisfied with technology’s ability to address the top two industry-wide challenges of driving operational efficiency and maximizing revenue and profits.
In regards to integrating point solutions to address a variety of essential workflows, 42% of the respondents do not agree that their point solution integrations are well supported, and 43% don’t agree that their integrations live up to their expectations.
More than half of the property management firms recognize that faulty integrations are impacting their bottom line — 56% of executives and 58% of frontline staff to be exact. From the front office to the front line, property management firms know they need technology that works well and leaves users satisfied.
Read the full report for more detailed insights on these top challenges and to explore the solutions available to address them.