Buildium® 2023 Survey: Portfolio Growth and Profitability
The recent Property Management Industry Survey from Buildium® shows a slight change in property manager preference in 2022 compared with previous years.
It’s an excellent survey and shows how business slowly changes and that property managers and landlords try to move toward what’s really important today. We thought we’d review their in-depth survey of landlords and property managers.
Information needs context and we’d like to discuss the implications of the 2023 Buildium® Survey. It’s a large document and we can just skim some key items to get clarity on the market’s real needs.
Post Pandemic Business Redrafting
With the pandemic gone, economy slowing, and costs increasing, landlords and property managers want to grow property portfolios and increase profits. However, are they monetizing these services well enough to generate those improved revenues and earnings?
The takeaway from the Buildium® survey, alternatively, is that taking on more might actually become a liability if rental property and management services aren’t monetized properly. The problem of offering more unappreciated services which create minimal revenue, might not be recognized or discussed.
It may be better to focus on what you’re already good at and maximize its revenue value
A key issue discovered here, is that accounting and maintenance aren’t valued and thus won’t be profit centers unless something changes. In fact, digitally-powered accounting can be the driver of profitability and growth. The current lack of appreciation might stem from using old off the shelf accounting software, not designed for property managers.
Linkedin Surveys
In our recent Linkedin survey, respondents said they were focused on revenue growth and they indicated rent price rises as the solution. Yet, few cited using growth to achieve better profits.
Buildium®‘s survey as well showed rent and fee increases are the key tactic planned to grow profits.
The Risk of Growth without Preparation
When you consider the high prices and financing costs of properties today, and that many landlord owners are enjoying good performance and may not want to sell, expanding portfolios or services would be a challenge, especially for smaller property management companies.
The 2023 Buildium® Survey report suggests there’s a clear connection between property manager’s challenges in the last few tough years and what they’re doing now. Yet, it might be said that property managers want to grow doors and profits in spite of what’s happened.
Because decreasing margins, high labor and material costs, labor skills shortage, slowing economy, dangerous financing costs, stubborn rent controls, supply chain issues, financially stressed tenants, and keeping what you’ve got, make it a dicey venture to expand and extend.
Personalized Service and Streamlined Processes
We agree with Buildium® that personalized service and streamlined processes is what property managers want. We’ve made extensive upgrades and improvements in our software platform such that our competitors are having difficulty keeping up.
We wanted to make the best property management software available and we’re on target to do that.
Buildium®, in their report, mentions marketing and communications are ambitions too. Pleasing tenants has fallen off and achieving work/life balance is plummeting too. It could be software is resolving those challenges and they’re no longer a priority. Their survey found property management companies grew significantly yet we’re not sure if they’re referring to mega-sized asset management enterprises or how it’s skewed to the enterprise level.
The report also shows companies are looking to grow landlord owner leads, encouraging current clients to grow, acquiring and expanding into new types of properties. All good things, yet this may require expertise in marketing and business development many small landlord businesses don’t possess.
Insights into small landlord behavior/ambitions were interesting. Their survey suggests they have a laundry list of improvements so they’ll definitely need technology to free up time and funding for these projects.
3 Top Pain Points for Owners
Maintenance, working with property managers, and accounting were cited as the 3 top pain points for rental property owners.
There is evidence that maintenance is not a profit center for property managers which means its undervalued and not properly monetized. Using ManageCasa™, a more profitable strategy for maintenance services could be developed and executed. Turning that loss leader around might be a savior for property management companies.
As mentioned, the same applies to accounting where it’s undervalued despite how vital it is. Accounting has been commoditized as bookkeeping. It’s actually a financial and operations management tool. And that’s where it can offer the greatest revenue value.
The rest of the report is available from Buildium®’s website and it is extensive and requires some time to read. The changes from past reports isn’t substantial, but it is always interesting to read the new report.
Most of our blogs here on ManageCasa™ are congruent with the report. Professionals know the trends and challenges, yet many stick to their “status quo” tools and business strategies. The appropriate software platform can make all the difference!
Conclusion to Our Review of the Buildium Report
The report reveals that property management software has to be reframed in terms of its ability to achieve key business goals — to streamline processes rather than being a daily task tool. The daily task tool is not valued by users who are apparently focused on growth, work reduction, portfolio growth, and profits. They want work to disappear entirely.
Platforms such as ManageCasa™ can take them there, however they must visualize the future and how business will done in the next few years.
Success always means getting a jump on the competition to capture market share via a stronger brand and improved services. A property management company can differentiate itself and create new customers through strong branding, to make competition irrelevant.
Let’s discuss major improvements in your business performance. Call us now at 415-
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