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Surveying over 5,000 U.S. property management professionals, the AppFolio Property Manager Benchmark Report found that 35% of respondents note maintaining high occupancy rates as a top threat for 2024, a 12% increase compared with 2023.

According to the report, respondents also are less likely to raise rents this year when not making improvements to the unit or building, decreasing from 70% of property management professionals in 2023 to 42% in 2024. Highlighting the need for property managers to find new ways to attract residents, uncover cost savings, and make their businesses more resilient, the report also points to a more competitive rental market this year.

“As we navigate a changing rental market in 2024, property managers are looking to improve operational efficiencies to maintain a competitive edge,” says Stacy Holden, senior director, industry principal, at AppFolio. “We believe the biggest levers they have to address today’s challenges are adopting AI to boost productivity, improving resident experiences through technology, and prioritizing safe and secure processes.”

As mentioned by Holden, property managers are utilizing AI for a better resident experience. The report found that 21% of property management professionals use AI, and 28% more plan to adopt it. Resident communication is the top use for property management professionals using and planning to use AI, followed by data entry and leasing funnel optimization.

Echoing further resident experience, property managers see flexible payment services as a way to improve the experience without building improvements or new amenities. Property managers are increasingly offering financial flexibility payment solutions, like security deposit alternatives and flexible rent, to build loyalty and reduce friction in the leasing process.

In 2024, 33% of respondents offer flexible rent solutions and 25% security deposit alternatives, compared with 14% and 17%, respectively, in 2023. The fast adoption of these offerings speaks to renters’ changing expectations, AppFolio points out. In a 2023 AppFolio survey of renter preferences, 40% stated that flexible rent is important when evaluating a new lease and 47% stated security deposit alternatives were important.

Because of the shift to more payment and operational processes online, data security is becoming a priority for property managers. According to the report, 22% of property management professionals experienced security issues in 2023, compared with 14% in 2022. Additionally, 44% are more concerned about this issue than they were a year ago.