Two complex factors are set to transform the rental market in 2024, creating new challenges and opportunities for property managers. The first is the ongoing impact of artificial intelligence (AI) tools, which if deployed effectively provide an opportunity for property managers to increase operational efficiency and unlock business intelligence. The second is a more competitive rental market, driven by record-high construction of multifamily rental properties.
Property management professionals will need to respond quickly to these trends, and data suggests many are already doing so. According to AppFolio’s soon-to-be-released survey of 5,300 property management professionals, nearly half either currently use AI or plan to adopt AI. At the same time, the data suggests several benefits for early adopters. Meanwhile, spurred by a more competitive rental market, property management professionals view maintaining high occupancy rates as a major priority this year and cite delinquencies as a top threat.
While these factors will force property managers to evolve, they also present valuable opportunities to experiment with emerging operational models and new resident offerings. Here are my predictions about how AI advancements and a changing market will play out in the coming year, and steps property managers can take to seize new opportunities.
AI will reshape workplace operations, enabling talent to thrive
Property management stands to be a leading example of how AI will complement property management workflows to save significant amounts of time and eliminate rote tasks. As property management companies continue to adopt AI in the year ahead, the resulting shift in how workplaces are organized will ease talent challenges and boost employee satisfaction.
The rental real estate space is built on human relationships between owners, investors, vendors and residents. The need for skilled, high-performing teams will always be a priority. But high turnover in entry-level roles and a narrow talent pipeline are perennial problems. To ease these challenges, property managers can use AI to experiment with new workplace models to provide more meaningful, effective opportunities for their teams.
New AI tools can eliminate the urgent, distracting busywork that leads to both retention issues and operational inefficiency. Powerful conversational AI platforms can handle tasks like scheduling maintenance, drafting and sending communications or sending a renewal offer to a resident. AI can also help close the gap with entry-level talent by reducing the amount of training needed to get started in a role. The result is not job elimination but task elimination, setting up new hires for success and leaving teams with more time to spend on the rewarding, interpersonal work that is essential to property management.
Resident expectations will define the rental space
A more competitive rental market makes resident experience more important than ever in 2024. Property managers will have to find new ways to create value and promote brand loyalty among new and existing residents. To do this well, they will need to thoroughly understand resident preferences and invest in the right amenities, services and experiences to meet their expectations.
Rather than investing in expensive physical amenities at the property, there are a number of digital services property managers can offer as perks to attract today’s residents who value financial flexibility and tech-first experiences. In our survey of renter preferences last year, 40% stated that flexible rent is important and 47% stated that security deposit alternatives are important. These flexible services can attract and retain a modern set of residents who are used to flexible models and digital payment options on their favorite retail sites and online banking platforms.
Smart-home technology is another differentiator to explore. Package lockers, smart locks that enable mobile access and community-focused building amenities can entice younger generations of renters. Millennials and Gen Z residents expect digital-first tools and amenities that support their need for remote work options and desire for stronger community ties.
A strategic technology approach for the new year
It’s clear that to navigate the complex rental real estate landscape in 2024 and beyond, property management teams will have to differentiate the level of service they provide, as well as the level of efficiency they’re able to achieve. Succeeding in both of these areas will depend on having a clear technology strategy in 2024.
Whether it’s using AI to automate routine tasks and boost employee satisfaction, offering digital and flexible payment options to residents or using smart-home features to improve resident experience, strategic technology adoption is crucial to meeting industry changes head-on. Property managers should focus their efforts on technology that boosts efficiency and resident service. Doing so can usher in game-changing operational benefits and resident services that will benefit their businesses for the long term.
Will Moxley is senior vice president, product for real estate at AppFolio.