36% of U.S. Rentals Now Managed by Pros
AUSTIN, TX / ACCESSWIRE / November 14, 2024 / The groundbreaking 2024 report, "The Property Management Trends Report: The shift toward professional management in SFR", details key insights into the residential property management industry, revealing a huge increase in the number of properties managed by professional third-party property managers across the United States. This shift, from 30% of properties in 2017 to 36% in 2024, reflects not only an increase of 1.3 million properties under professional management but also a broader trend of investors turning to property management solutions to navigate a complex and evolving real estate landscape.
The research was designed and fielded by The Harris Poll in 2017 to gain insight into the industry shifts that have occurred since the last known census of self-managing landlords. It was also fielded by The Harris Poll under the title "The Iceberg Report: An Analysis of the American Single-Family Residential Investment Industry," sponsored by Real Trends and NEXZUS Publishing.
"The Property Management Trends Report: The shift toward professional management in SFR" was sponsored by LeadSimple and Peter Lohmann's Newsletter and co-authored by Jordan Muela, CEO of LeadSimple, Peter Lohmann, CEO of RL Property Management, Jay Parsons, head of investment strategy and research at Madera Residential and Rob Hahn, managing partner at 7DS Associates.
"Investors today face more than just property upkeep; they're navigating a landscape where regulatory, economic and market dynamics are in constant flux. This report highlights the clear, data-backed advantage of investors working with property management partners who bring stability and efficiency," observed Parsons.
Hahn added, "This study is an important contribution to the field of property management, which may be changing more rapidly in the years ahead. The data should help inform both investors and property managers about what is truly important and what is not. Our study shows that the human elements - experience and reputation - are most important."
Key Findings: Property Managers Increasingly Valued by Real Estate Investors
Surveying over 750 residential real estate investors, this report reveals how regulatory shifts, economic uncertainty and maintenance demands have contributed to the rise in professional management. The findings indicate that investors increasingly view professional property managers as essential partners in maintaining profitability, meeting compliance requirements and reducing legal risks. Two-thirds of investors report having used a third-party property manager, with many citing benefits like streamlined tenant relations, efficient maintenance handling and improved rent collection.
According to the report, the value property managers bring goes beyond operational efficiency. "Property managers do more than simply collect rent; they're partners in enhancing the performance of the assets they manage," said Muela. "Our findings show that property management professionals are instrumental in driving property performance, especially as investor priorities shift toward increasing profit margins and mitigating risks."
Investors Report Positive Experiences with Property Management
Satisfaction levels are noticeably high among investors currently working with professional property managers, with an average Net Promoter Score (NPS) of +39, a favorable score by industry standards and the first-ever industry NPS benchmark. Additionally, property managers are viewed as effective in handling daily challenges, such as maintenance and tenant communications, with around 85% of investors stating that property managers ease the burden of property ownership. Nearly half (45%) of investors indicated that they would recommend their property managers to others, noting that property managers make rental property investments more manageable and help protect owners from costly risks.
Perceived Value of Professional Property Management Drives Increased Adoption
Despite the cost and a desire for control being the primary reasons some investors have hesitated to hire a property manager, the 2024 report suggests that those who do work with property managers feel the investment is worthwhile. Nearly 75% of investors using property managers think they bring value that justifies their fees, and 71% report an increase in overall profitability. Property managers are seen as valuable allies in dealing with regulatory compliance and tenant challenges, enabling investors to focus on expanding their portfolios and enhancing their properties.
Looking Ahead: Industry Trends and Investor Priorities for 2025
As investors look toward 2025, priorities include increasing profit margins, upgrading property facilities and expanding portfolios - goals for which property managers are well-suited to provide support. The report notes that property managers help investors meet these objectives by keeping operational costs down and maintaining compliance amid evolving regulations, particularly critical given the anticipated volatility of the real estate market over the next decade.
To register for a webinar featuring detailed data and implications for the property management and multi-family residential real estate industries told by the study's co-authors and sponsors, visit www.leadsimple.com/pm-trends-report.
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About Jordan Muela
Jordan Muela is the CEO of LeadSimple, the leading property management operations system focused on driving revenue and streamlining operations for property managers. Jordan has started five ventures in the single-family residential space and provides thought leadership via his podcast. You can learn more about Jordan here: https://www.profitablepropertymanagement.com/.
About Peter Lohmann
Peter is the CEO & principal broker of RL Property Management, a residential property management company located in Columbus Ohio. RL Property Management manages over 650 units. Peter is a property management industry expert and thought leader, contributing with his podcast and weekly property management newsletter. You can learn more about Peter here: http://peterlohmann.com.
About Jay Parsons
Jay Parsons is a rental housing economist, consultant and speaker. He has advised numerous multifamily and single-family rental housing stakeholders - from institutional investors, REITs, owner-operators, regional investment groups, lenders, regulators and government agencies.
Currently, he serves as principal, head of investment strategy and research at Madera Residential, a multifamily owner/operator with 11,000+ units, and as a partner with WayMaker multifamily investment group. Previously, Jay was the chief economist at RealPage, a leading rental housing software and analytics provider. You can learn more about Jay here: https://jayparsons.com.
About Rob Hahn
Rob Hahn is the managing partner at 7DS Associates, where he advises leading and emerging real estate companies on strategy and industry transformation. Known for his candid insights, Rob publishes Notorious R.O.B., a blog offering bold analyses of real estate trends, policy and technology. Through writing, speaking and consulting, he challenges conventional wisdom, fostering informed discourse among industry professionals. You can learn more about Rob here: https://notoriousrob.com/.
Media Contacts:
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SOURCE: LeadSimple
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