AI adoption, data security, and resident experiences expected to redefine property management strategies this year

AppFolio’s Second Annual Property Manager Benchmark Report Reflects Changing Dynamics of 2024 Real Estate Market

SANTA BARBARA, Calif., Feb. 15, 2024 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ: APPF), the technology leader powering the future of the real estate industry, today released its second annual AppFolio Property Manager Benchmark Report, offering insights into the industry’s strategies and priorities for 2024.

Based on responses from more than 5,000 U.S. property management professionals, this comprehensive study encompasses a diverse cross-section of the property management sector. It reveals that maintaining high occupancy is a top concern, due in part to rising vacancy rates. More than one-third (35%) of respondents report maintaining high occupancy rates as a top threat for 2024 – a 12% increase compared to 2023.

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

“As we navigate a changing rental market in 2024, property managers are looking to improve operational efficiencies to maintain a competitive edge,” said 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.”

Other takeaways from the 2024 AppFolio Property Manager Benchmark Report include:

• Property managers are turning to AI to drive productivity and deliver a better resident experience. 21% of property management professionals currently use AI, and 28% more plan to adopt it. Resident communication is the most common use case for property management professionals currently using and planning to use AI, followed by data entry and leasing funnel optimization.

• Property managers see flexible payment services as a way to improve resident experience without costly building improvements or new amenities. Property managers are increasingly offering financial flexibility payment solutions, including security deposit alternatives and flexible rent, to build loyalty among residents and ease friction in the leasing process. In 2024, 33% offered flexible rent solutions and 25% security deposit alternatives; in 2023, 14% and 17%, respectively. The rapid adoption of these offerings speaks to renters’ changing expectations. 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 was important.

• As more payments and operational processes move online, data security is becoming top-of-mind for property managers. According to our report, 22% of property management professionals experienced security issues in 2023, compared to 14% the year before, while 44% are more concerned about this issue than they were a year ago.