A mix of record inflation, a potential recession, and a leveling of pandemic-era rent increases has forced a shift in how property managers operate. Creating new efficiencies will become the differentiator, allowing managers to deliver value by controlling expenses, increasing margins, and delivering a better customer experience.
While this landscape brings new challenges, there are also opportunities for those who can use technology to increase efficiency and build strong relationships with both residents and employees. In fact, there’s a high degree of optimism among property managers, particularly around technology’s ability to streamline and automate mundane processes. According to the 2023 AppFolio Property Manager Benchmark Report, property managers have a positive outlook for the year ahead and are eager to adopt greater operational efficiency.
To deliver on these goals, there are tactical steps property managers can take to prioritize operational efficiency and focus on high-value activities for both their businesses and customers.
Be Aware of Timely Business Risks and Opportunities
This is no ordinary year. The unique factors brought on by economic conditions, a changing housing market, and a continued tight labor market mean that property managers have to carefully consider how these factors will impact their business. There are both risks and opportunities that must remain top of mind.
When asked about their biggest business risks over the next year, property managers cited delinquencies (43%), inflation (46%), and supply chain shortages (27%). Even amid economic uncertainty, the labor marketremains competitive, and talent continues to be a priority among property managers. Hiring new employees (29%) and retaining current employees (19%) are also on the list of business risks for 2023.
Despite these challenges, property managers are optimistic about the year ahead and see many opportunities. They’re eager to add new units to their portfolios (55%), improve customer service (42%), streamline operations (32%), and adopt new technology (25%).
To weather the complex business and economic factors at play and deliver on these opportunities, operational efficiency is crucial. Streamlining processes and thoughtfully implementing automation are key aspects of this.
Automation a Win for Managers, Employees, and Residents
To streamline and automate operations, 49% of property managers seek to improve their project management processes. Meanwhile, 38% aim to consolidate and/or integrate existing software, simplifying their day-to-day operations.
While many business leaders seek out automation to reduce costs, there are also so-called people benefits that can’t be overlooked. At a time when 52% of property managers are looking to hire additional employees in the next 12 months and retention continues to be key in a tight labor market, automation can be a difference-maker for employee experience.
Cutting down on manual, time-intensive processes like data entry and accounting can leave team members with more time to focus on business-critical tasks like proactive performance reporting, strategic planning, and process optimization. Automation can also help simplify employee training, for example, by guiding inexperienced employees through complex tasks so they can complete them more easily and with less guidance from senior managers.
More efficient processes also have a positive impact on resident experience, from more seamless online payments to streamlined maintenance requests and real-time communications with management.
Payments Process Ripe for Automation
Online payments have become ubiquitous across retail, dining, and travel experiences, which means residents now expect an equally seamless process for rent payments. Bringing these processes online can help improve customer service while also improving efficiency. Among property managers looking to streamline operations, processing more rent payments online (46%) is paramount.
This is no surprise, given that the process of depositing and cutting checks and recording transactions at scale are two of the most time-consuming tasks associated with property management. Streamlining these processes can have a significant impact on overall operational efficiency.
For example, online rent payments and security deposit alternatives can benefit both managers and residents. Instead of manually managing and tracking physical checks or cash payments, online payments can be tracked automatically, leaving team members with more time to focus on other activities. Meanwhile, renters benefit from a more seamless payment process. Security deposit alternatives can also provide more flexibility for renters while providing the same protection as a cash deposit and cutting down on manual processes.
Focus on the Fundamentals
Times of uncertainty can bring important opportunities for those who focus on the fundamentals and move with intentionality. For property managers, those fundamentals should be resident experience, employee engagement, and efficient operations.
Improving operational efficiency can help contend with the risks and deliver on the opportunities that property managers foresee over the coming year. In addition to reducing costs and helping to offset rising inflation and higher delinquencies, more efficient processes can strengthen relationships with both residents and employees. Automation can cut down on manual, time-consuming tasks to improve employee experience, while also improving customer service and making processes easier for residents. This will ultimately help property managers keep up with the latest demands and expectations required to drive lease renewals and retain talent within the current economy.