While they were high-tech luxuries in the recent past, smart buildings are now standard in 2024. Smart buildings and devices are even a must-have for some tenants. 

Internet of Things sensors and devices communicate with each other and collect essential data that helps managers make informed decisions with maintenance and building optimization. Smart devices can also automate processes like lighting, HVAC and security. This functionality makes life more convenient and comfortable for occupants, benefiting property managers and tenants.

4. Artificial Intelligence

The world is abuzz with talk of artificial intelligence, and the property industry is no different. AI is an invaluable tool with various uses in property management. It can optimize processes, help with decision-making and improve the customer experience. With AI integration, property managers can:

• Track property life span and predict maintenance needs.
• Screen and evaluate potential tenants.
• Monitor property market fluctuations.
• Provide virtual assistance and chatbot services.
• Analyze and optimize energy use.

5. Rising Costs

In 2022, inflation reached over 9%, the highest since 1981. As inflation climbs, the costs of consumer goods, taxes, properties, labor and insurance rise with it. Increasing costs have impacted the property management industry, as businesses now have more expenses cutting into their profit margins.

Inflation declined to around 3.5% in early 2024, but some costs have still not followed suit. For example, food, homeowners insurance and health insurance are still more expensive thanks to labor and supply costs and severe weather. Property managers must look for ways to increase profitability in the future. However, tenants are also struggling with the rising costs, so increasing rent will only decrease client retention. A solution to this issue is to focus more on rental properties, improving efficiency with technology and highlighting service benefits.

6. High Competition

There are nearly 300,000 property management businesses in the United States. With rising inflation and mortgage rates and slowing property sales, competition in this industry is high. Property management companies must adopt new growth strategies to differentiate themselves in 2024.

This year, property management firms will focus on providing new, personalized services to their tenants to set themselves apart. Others will diversify their portfolios by expanding their reach to new locations and acquiring different properties. Another strategy is to use technology to make current processes more efficient. With the extra time, managers can focus on finding and retaining long-term tenants.

7. Accidental Landlords

Since 2022, the U.S. mortgage rate has grown from 3% to around 7% in early 2024. These high mortgage rates result from the Federal Open Market Committee's efforts to curb rising inflation rates. While experts predict a decline in mortgage rates in the coming years, the current spike has significantly impacted the housing market.

Homeowners who purchased in 2020 and 2021 received some of the lowest interest rates we've seen in years. These same people are now reluctant to sell at higher rates. Instead, they rent their older properties and use the income to cover their new mortgages. Consequently, the property management industry is seeing a surge in "accidental landlords" — those who rent their properties without initially intending to — turning to professionals to help with their new daily responsibilities.

8. Sustainability

Sustainability is a trend in most industries today for a good reason. While sustainability initiatives reduce environmental impact, they simultaneously bring cost savings to property owners and tenants. They also appeal to environmentally conscious consumers, who are happier to spend their hard-earned money on things that align with their values.

This year, some sustainability trends in property management include:

• Using energy-efficient appliances.
• Building with sustainable or recyclable materials.
• Providing recycling facilities for tenants.
• Installing fixtures that conserve water.

Stay on Top of Trends With Harrisburg Property Management Group

Despite high mortgage rates and decreases in property sales, the future of the property management industry is bright. Experts predict inflation and interest rates will drop in the coming years, bringing new opportunities. Stay ahead of these trends and capitalize on them when they happen by partnering with a professional property management company like Harrisburg Property Management Group.

We understand the challenges and trends of property management in Central Pennsylvania, Carlisle and Harrisburg. Let us help you achieve your goals with our rental property management expertise. We'll take care of every aspect of management, including market evaluations, marketing, tenant relations, maintenance and bookkeeping. With our team at your side, you can provide the best possible experience to your renters.

Contact us today to learn more about our services and help your properties reach their full potential.