“2025 State of the Property Management Industry Report”
“2025 State of the Property Management Industry Report”Hello Friends!
In a rapidly evolving rental landscape, staying ahead of trends and understanding what’s to come can make all the difference for property managers, landlords, and real estate investors. That’s why we’re excited to share insights from the “2025 State of the Property Management Industry Report”. This yearly report gives an in-depth look at key predictions, emerging trends, and the major shifts anticipated to shape our industry over the next year.
Why does this matter? With data-driven projections and expert analysis, the report is an invaluable resource for anyone looking to make informed decisions in property management. From shifts in tenant expectations and rental technology to economic factors influencing the market, these findings provide a solid foundation for navigating the coming year. Whether you’re a property owner or a manager, this knowledge is your guide to staying competitive, proactive, and prepared for 2025.
Let’s dive into the trends, predictions, and what they mean for the future of property management!
“2025 State of the Property Management Industry Report”
*Excerpted from the full report authored and published by Buildium, Propertyware, and NARPM
INCREASE OF RENTALS IN THE MARKET
Rent growth has been slow in 2024, with half of the top 50 U.S. markets seeing annual increases of 2–3%, a quarter seeing growth of 1–2%, 18% seeing growth of less than 1%, and others experiencing no growth. Rent growth is projected to pick up in 2025, with 40% of the top 50 markets seeing annual increases of more than 3%, 55% seeing growth of 2–3%, and 5% seeing growth of less than 2%.
REVENUE GROWTH EXPECTATIONS
While there is an expectation for revenue to increase, the anticipation is that it will increase less than it did in 2022 and 2023. What’s causing revenue growth expectations to moderate? Costs have continued to increase across the board; and rents can only be raised so high to cover these increased costs when the supply of rental housing is increasing relative to demand, and renters’ wage growth isn’t keeping up. AS the market has evolved, renters are moving less often and owners are buying fewer properties.
This is why it’s so important to know your market. ASSURED Property Management offers a FREE Rental Analysis, based on real time comps in the area. This will give you a good idea of what you can expect to generate in income for your investment property.
COSTS THAT HAVE INCREASED MOST OVER THE PAST YEAR
- Labor costs – vendors and contractors
- Business insurance
- Property insurance
- Staffing costs
- Property taxes
- Marketing expenses
- Material and supply costs
Property management companies’ top profitability challenge is achieving profitability when the company’s and rental owners’ costs have increased, wages are higher than before the pandemic, rental supply has increased relative to demand, and rents need to be kept at levels residents can afford.
ASSURED Property Management keeps packages and costs lower than most in the industry. With 8% and 10% package levels, Tenant Finder service for 25% below the industry average, and Ala Carte services for you to pick and choose from, we are fairly certain we can balance your expenses and ensure your ROI is what it should be. You can obtain higher rents utilizing a property management company, similar to the way you can obtain a higher sales price utilizing a real estate agent.
TOP PROFITABILITY OPPORTUNITIES FOR RENTAL OWNERS
- Updating properties to justify higher rents.
- Keeping great residents in place to prevent vacancies and non-payment of rent.
- Increasing collection rates.
- Raising rents where demand is strong.
We wholeheartedly agree and will support our clients in achieving these opportunities. From utilizing and overseeing skilled vendors that will take care of your upgrade projects, to ensuring that residents are communicated with and happy with our service, it is our goal just as much as yours to prevent vacancies.
MAINTENANCE
Maintenance was identified as the second-greatest challenge for property management companies on this year’s survey, and was also ranked by rental owners as their #1 source of stress. Why? Materials, supplies, and labor all cost more than they used to; experienced maintenance workers are in short supply; and residents’ expectations for quick maintenance fixes are higher than ever.
Here are the specific challenges that property managers face when it comes to maintenance and repairs, and one area of opportunity that companies have identified.
- Justifying repair and renovation costs to owners as the cost of materials and labor continues to rise, though timely maintenance work and property updates are critical to attracting and retaining residents.
- Keeping up with necessary repairs, preventative maintenance, and work on units that are turning over.
- Ensuring that work is completed efficiently, effectively, and to residents’ and owners’ satisfaction.
- Maintaining a roster of high-quality, reliable, affordable vendors.
- Affording vendors’ prices in a market where trade workers are scarce.
- Keeping up with the needs of aging properties that require greater upkeep.
In working with a management company like ASSURED Property Management, you can mitigate some of these challenges because we negotiate better rates with our vendors and invest in preventative maintenance programs to reduce major repairs. We also put our eyes on the property and perform thorough inspections in order to catch problems early, before they become a major expense.
TECHNOLOGY
With efficiency ranking as property management companies’ second-highest priority for 2025, technology has never played a more pivotal role in their operations. Having the right processes and systems in place is particularly important as companies focus on expanding their portfolios, keeping costs down, and improving the customer experience.
ASSURED Property Management employs multiple tools to ensure top efficiency. We utilize Buildium for our main management program, in addition to PetScreening, HappyCo (inspection platform), Obligo (security deposit alternatives), Hunter Warfield (collections), Quickbooks (accounting), and Google Workspace (for communications and the proper documentation of all of our processes and procedures). We use ePay for streamlining rent payments, vendor payments, and owner proceeds. Both tenants and homeowners have personal portals to review reports and important documents, submit requests, make payments, etc. We sync directly with all of the major 3rd party marketing affiliates and utilize social media to the fullest to ensure your property listing gets in front of the most prospective renters. We even utilize Artificial Intelligence to simplify many of our processes.
Why is this important? Balancing technology to create efficiencies in some of our processes helps us remain available for the things that are most needed (customer service, inspections, showing properties, handling maintenance, managing turnovers, etc). We will always strive to continue seeking innovative solutions for constant improvement. We’re not afraid of change, we embrace it!
LEASING
When it comes to leasing heading into 2025, property management companies have one clear focus: finding great residents who can stay put in their properties for the long term. After focusing their efforts on resident retention over the past year—efforts that have largely proven successful— tenant quality has emerged as companies’ #1 concern.
The Top Leasing Challenges Faced
- Keeping rents at reasonable rates to retain great residents.
- Keeping rents at reasonable rates to close vacancies and help properties stay competitive, while covering increased costs.
- Dealing with longer vacancies in service of finding the right residents to avoid evictions down the road.
- Implementing the best screening processes and procedures and averting fraudulent applicants.
We at ASSURED help to mitigate some of these challenges. We perform regular market research to stay on top of pricing, inventory, and demand. In addition to utilizing technological screening tools, we take it a step further and verify the information we are presented with by calling former landlords, employers, etc. We want the same thing you do – a property with minimal turnover, top tenants, and the shortest vacancy periods, to ensure optimal return on your investment(s).
DEMAND FOR PROPERTY MANAGEMENT SERVICES
Demand has fallen since the height of the pandemic. 58% of small-portfolio rental owners work with a property manager – a decrease of 6% since the pandemic, and 3% in the last year. That said, this number is still higher than it was prior to 2020. Shifting laws have made rental property ownership more complex, requiring greater expertise to keep properties compliant.
What are the biggest reasons for hiring a property management company?
- Distance to your rental property(ies).
- Wanting an expert’s help in managing, attracting, and retaining residents.
- Help with emergency repairs and preventative maintenance.
- Assistance in running your property(ies) in compliance with changing laws.
- Obtaining assistance in accounting and bookkeeping for your property(ies).
- Getting help to maximize the revenue your property(ies) generate.
Rental Owners’ Top Considerations When Choosing a Property Manager
- Customer Service
- Reporting & Transparency
- Local Market Expertise
- Technology
- Referrals & Word of Mouth Reputation
- Regulatory (legal) Expertise
- Online Presence & Reputation
We strive to make this process more meaningful for you. We stay on top of industry trends, legislation and everchanging laws, the market, maintenance costs, and so much more. We want you to benefit from our experience, knowledge, and lessons learned over the years, to ensure you get the best return on your investment. We perform professionally to achieve the best results, while guaranteeing your property is cared for like it’s our own.
RENTAL OWNERS’ INVESTMENT OUTLOOK
We’re seeing early signs of a return to growth for rental owners.
Trends in Rental Owners Plans to Acquire & Sell Properties
- 44% of rental owners expect to acquire new properties in the next two years, representing an increase of 9 percentage points since 2023, and the highest growth expectations we’ve seen since 2018.
- 2 in 3 rental owners say it’s a smart (or somewhat smart) time to invest in residential rentals, a number that’s remained unchanged since 2023.
- 1 in 3 rental owners say that high property prices and elevated interest rates are impacting their investment plans. A shortage of available properties is a secondary factor.
- Most rental owners who plan to grow will purchase long-term, residential rentals. However, 1 in 3 plan to acquire commercial properties, and 1 in 5 will invest in vacation rentals.
- 30% of rental owners are considering selling off at least one property in the next two years, though half plan to acquire new properties in their place.
- 13% of rental owners plan to shrink their portfolios in the next two years, a decrease of 1 percentage point since 2023. Plans to downsize are more common among Accidental Landlords.
WHO OWNS RENTAL PROPERTIES TODAY?
The Three Types of Rental Property Owners
- Intentional Investors are those who purchased rental property as an investment from the start. They represent 54% of small portfolio rental owners in 2024, a number that continues to rise.
- Accidental Landlords are those who fell into rental property ownership due to circumstance and don’t consider themselves investors. They represent 25% of rental owners in 2024. Though we noted an increase in the number of Accidental Landlords who are entering the market in last year’s report, this influx is currently being outweighed by the number of owners who are selling off their properties.
- Unintentional Investors are those who fell into rental property ownership due to circumstance, but now consider themselves investors—a category that Buildium identified in 2018. They represent 21% of rental owners in 2024, a number that’s stayed relatively steady over time.
Here at ASSURED Property Management, we’re both experienced and prepared in supporting EVERY type of owner in achieving strong returns and thriving in the long game of real estate.
RENTAL OWNERS’ FINANCIAL HEALTH
For the last several years, our research has found that though most small portfolio rental owners rate their properties as being in good financial health, they aren’t necessarily profitable. Because so many of these owners rent out their properties for the income they provide, this presents an opportunity for property managers to help owners run their rentals more efficiently and effectively.
Trends in Rental Owners’ Financial Health
- 35% of rental owners report that their properties are consistently profitable, representing no change since 2023. Investors are more likely than Accidental Landlords to report that their properties are profitable.
- 79% of rental owners own their property primarily for the income it provides, including 55% for whom it provides a passive stream of income, and 24% for whom it represents an active stream of income.
- 58% of rental owners are reliant on their rental income to make ends meet. However, a growing portion of small-portfolio rental owners say that their rental income is supplemental.
RELATIONSHIPS WITH RENTERS
Renters Plans to Move
In 2023, we found that after three years of pandemic-driven fluctuations in renters’ moving plans, conditions were finally normalizing. We also predicted that property management companies would be exerting more effort to retain their residents as an influx of thousands of new apartment units were coming online in major markets across the U.S.
What’s changed since last year when it comes to renters’ moving plans?
Trends in Renters’ Plans to Move
- 47% of renters plan to remain in their current residence between mid-2024 and mid-2025—the highest number we’ve seen since 2021, indicating that property management companies’ resident retention efforts are indeed working.
- 30% of renters who plan to move are motivated by affordability concerns, making this renters’ top reason for switching residences in the current market.
- Residents whose rent has increased feel less certain about staying in their current unit, but are only marginally more likely to actually move out, likely due to the reality that rent increases on new leases tend to outweigh those for renewal leases.
- 29% of renters who are considering moving plan to purchase a home—a slight increase since 2023, but a significant decrease since 2022, when mortgage rates were lower and houses were more affordable.
- Younger renters are more likely to consider moving out than middle-aged and older renters, who tend to stay put for longer.
- Apartment building residents are more likely to have moving plans than residents of smaller rental properties, likely influenced by the influx of new supply into the multifamily market.
Challenges in Resident Retention
- Competing for residents as new properties come online, particularly when managing older properties.
- Keeping residents in place when owners aren’t willing to spring for repairs and upgrades.
- Raising rents to compensate for increased costs without losing great residents.
- Retaining residents who want to purchase a home, particularly in areas where renting is more expensive than homeownership.
Top Opportunities for Resident Retention
- Taking care of maintenance issues quickly.
- Investing in property updates.
- Improving responsiveness and communication with residents.
Renters’ Advice on Retention
- Respond promptly to maintenance requests, particularly when they’re impacting residents’ safety or enjoyment of their home. ̛
- Let residents know you’re working on a solution to help them be more patient if you can’t resolve the issue right away. ̛
- Make sure that properties are clean and repairs are addressed before new residents move in to make them feel welcome and display your care for the property. ̛
- Do a walk-through annually (at a minimum) to address any outstanding maintenance issues and gather renters’ feedback on their experience. ̛
- Offer as much notice and flexibility as possible when work needs to be done on the property to accommodate residents’ busy schedules. ̛
- Make sure the vendors you employ are of the highest quality, resolving issues completely and providing pleasant service to your residents, who likely see them as an extension of your team whether or not they work directly for your company. ̛
- Make units accessible, child-friendly, and pet-friendly wherever possible to welcome a greater diversity of residents to your properties.
- Incentivize the behaviors you want to see—for example, reporting of on-time payments to credit bureaus, lower rent increases for long-term residents, or perks like free carpet cleaning upon lease renewal (which offers the side benefit of keeping the property in good condition).
Renters Financial Health
Concerns around rental affordability have been elevated since the start of the pandemic. Though renters’ financial health isn’t as precarious as it was back in 2020, growth in rent prices has continually outpaced wage growth, leaving many renters devoting a concerning share of their income to housing costs.
Between 2001 and 2022, rents rose by 21%, while renters’ incomes rose by just 2%. As a result, 50% of renter households are considered cost-burdened as of 2022—an all-time high. Half of those households are severely cost-burdened, spending more than half of their income on rent each month.
Renters’ finances remain an area of concern. Just 55% of renters report that they’ve been able to pay all of their bills on time and in full over the last year, down from 64% in 2022. 77% of renters carry debt, and a concerning 26% of renters have no savings to fall back on in an emergency.
2 in 3 renters report that their rent has increased since the beginning of 2023. Rent increases have been most common in large apartment buildings.
1 in 2 renters would prefer to own a home, but rent because their finances prevent them from purchasing one. 51% of renters rent for this reason, as compared to just 32% in 2021, before the housing affordability crisis became quite so acute.
There are so many factors that affect renter retention. We focus on nurturing relationships and providing a better experience for all of our clients. We have prepared ourselves for the challenges that we inevitably face, and we listen to what people want. In prioritizing the “Top Opportunities for Resident Retention” and truly listening for the purpose of understanding, we believe that we give the best we can to ensure a top experience, full circle – an experience that will help to retain our residents for the long-term, keeping your turnover as low as possible.
WHO LIVES IN RENTAL HOUSING TODAY?
How have the types of households living in rental properties shifted over the last few years, as the housing affordability crisis has kept some households from transitioning to homeownership, and has motivated others to share their homes rather than living alone?
Trends in Renter Demographics
- Renter households are growing larger over time, containing an average of 2.75 occupants in 2024, compared with 2.5 in 2021. This trend likely has roots in the affordability crisis: More couples are having kids while living in rental housing (rather than waiting until they purchase a home), and more renters are doubling or tripling up with partners, relatives, and roommates.
- The number of renter households with kids continues to grow. Today, 25% of renter households have children under age 18, an increase of nearly 5 percentage points since 2020. In particular, nearly half of Millennial renter households now contain kids. This increase in family renters is one reason why demand for single-family rentals has surged over the last several years.
- Single-family rentals have the largest household size with an average of 3.2 occupants, compared to 2.5 in multifamily properties. Single-family homes attract more multigenerational households and couples with kids, whereas smaller apartment properties can’t accommodate larger families as easily.
Top Wants / Renters’ Amenity Preferences
- Ability to own a pet.
- Dishwasher.
- Private outdoor space.
- Ability to have an in-unit washer and dryer.
- Working HVAC.
- Feeling of safety.
- Inclusion of some utilities or services.
- Convenient to stores, restaurants, and work.
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FINAL NOTE FROM ASSURED PROPERTY MANAGEMENT’S OWNER:
When I started this business, I made a promise to do better by my clients and residents. While growth is always at the forefront of my mind, what is more important is that I keep my promises, become a trusted voice to my clients, and be able to act as a source of support for everyone I do business with. It’s more important to me to find the right clients – those who have similar values and compatible goals – than it is to increase portfolio numbers simply for the sake of bigger profits. I want to make a difference in the community that I also call home. I want to introduce a different way of doing things – going above and beyond your expectations. I believe in the power of first impressions, with myself, my company, the homes I manage, and the way we do things. I want to be the place where quality meets respect. Exceptional clients + exceptional properties + exceptional management = elevated experiences for all. This industry is my passion and I intend to keep it that way by maintaining these high standards.
-Jamie Braun, Owner/PMIC