How demand for property management services is changing in 2024 [The Lookout]

Robin Young
Robin Young | 2 min. read

Published on May 23, 2024

The pandemic not only changed how property management companies operate—it transformed the demand for property managers’ services.

 

But as the pandemic has receded, are rental owners still seeking out property managers at the same rate? That’s what we’ll investigate in this episode of The Lookout.

Let’s go back to 2019 for a second.

Buildium surveys hundreds of small-portfolio rental property owners every year. And before the pandemic, just 55% of these rental owners worked with a property manager to operate their rentals.

Chart: The Number of Rental Owners Who Work with a Property Management Company | Buildium Research

Then, the pandemic hit, along with new regulations—and there was a sudden need for expert advice on how to move forward with basic rental processes.

In 2020, 64% of rental owners chose to work with a property manager. And for the next two years, that number held steady at 63%.

So, what did we see in our most recent survey? The number of rental owners working with a property manager receded slightly to 60%.

To be clear, this number is still higher than it was before the pandemic. Why do we think this is the case?

Rental property ownership has become significantly more complex over the last few years.

Regulatory changes have been an area of particular concern for small-portfolio rental owners, with some local governments discussing rent control measures or interventions into procedures like evictions.

It simply takes more expertise to operate a rental property in compliance with today’s changing laws.

So, if this is the case, why do we still see a significant minority of rental owners trying to run their properties on their own?

As property managers know well, rental property ownership isn’t just more complex than it used to be—it’s also more expensive.

Rising costs—from property taxes and insurance to materials and labor—have rental owners searching for ways to improve their margins.

Image: Rising Costs in Property Management | Buildium Research

And that makes it absolutely crucial that property managers demonstrate the value they create for their owner clients.

They can achieve this by helping them run their properties more efficiently, more profitably, and in compliance with local regulations.

In the grand scheme of things, challenges like maintenance, leasing, profitability, and regulatory complexity aren’t going anywhere.

Chart: Why Rental Owners Hire a Property Management Company | Buildium Research

So, while there will always be DIY Landlords out there, we think a majority of rental owners will continue to see the immense value in property managers’ expertise.

You can learn more about what today’s rental owners look for in a property manager in Buildium’s 2024 Property Management Industry Report. Download your free copy to stay on top of this and other trends in the rental market.

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Robin Young

As Buildium’s Senior Researcher, Robin leverages her background in social science research and interest in real estate economics to identify trends in the rental market. She combines intensive market research with insights gleaned from surveys of property managers, renters, and rental owners to examine topics like shifting renter demographics, the housing affordability crisis, and the transformation of property management during the pandemic. She's best known as the author of the annual State of the Property Management Industry Report.

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