Difficulty in maintaining occupancy rates is now the No. 1 threat
Rising Vacancies, Competition for Renters Challenge Property Management
Rising vacancies challenge property management the real estate property-management software company AppFolio says in its 2025 Property Management Benchmark Report, based on insights from more than 2,000 property management professionals.
“The property-management industry is entering 2025 at a moment when rising vacancies, growing competition for renters, and increasing concerns around fraud and cybersecurity are creating a more challenging business environment,” AppFolio writes in the report. It “reveals what’s on the industry’s mind, as well as the strategies and tools that forward-thinking businesses are using to stay ahead.
“These challenges, however, also present an exciting opportunity to innovate, streamline operations, and deliver even greater value to residents and property owners alike.”
Challenges Facing Property Managers
- In the proptech (real estate + technology) industry, top concerns have shifted from macroeconomic issues, such as inflation, to more industry-specific challenges, such as rising insurance costs.
- Difficulty in maintaining occupancy rates is now the No. 1 threat, with a 20% increase since 2023, overtaking inflation.
- 40% of property managers consider rising insurance costs a top threat, particularly in natural disaster-prone Southern/Western states.
- 70% of property managers now track resident satisfaction, up 10% from last year.
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Rise in AI usage
- Property managers are increasingly turning to AI to tackle key challenges such as resident retention and fraud prevention. The use of AI increased by 13% year over year (YoY), from 21% in 2024 to 34% in 2025.
- The most common use of AI is resident communication (60%), and over half (51%) of property managers now use AI to improve resident satisfaction (an 8% YoY increase).
- A quarter (25%) of companies are encouraging employees to use AI (an 8% YoY increase).
- The percentage of property managers with no plans to start using AI decreased YoY by 14%.
- On the flipside, the top concerns with AI implementation are security and data breaches (41%) and AI regulation and compliance (33%).
The Rising Threats of Fraud and Security
- Property managers are facing increased pressure to protect both their businesses and their residents from a rise in fraud
- Compared to last year, property managers are 40% more concerned about online fraud incidents and 37% more concerned about data security.
- In the past year, 79% of property managers experienced payment fraud and 88% experienced data issues.
- Only 16% of property managers are completely confident in the authenticity of applicant-provided documentation.
Source: Rental Housing Journal
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