Property management isn’t a piece of cake. Although it’s common for investment property owners to try to handle everything on their own, they are often taken aback by how time-consuming it actually is.
Rent collection, fulfilling maintenance and repair requests, managing vacancies, and handling the overall property budget are just a few of the responsibilities of having a real estate investment.
Handing these over to a professional, such as a property manager, is guaranteed to ease the burden on real estate investors. Each property has its own share of problems, but there are also key challenges that properties mutually share.
5 REAL PROPERTY MANAGEMENT CHALLENGES
1. STAFF SHORTAGE
What began as “The Great Resignation” in late 2021 left lasting effects until today. Companies are still experiencing high turnover rates as more and more people want to stick to working from home or having a hybrid setup.
Companies are struggling to hire and retain staff, especially those who are highly qualified. With the existing insufficiency of well-equipped candidates in the market and the high demand for experienced property managers, a staffing shortage remains prevalent across the industry.
2. FLUCTUATING OPERATING COSTS
Lower operating costs equal greater revenue. However, both fixed and unexpected expenses curb the goal of having bigger savings.
Varying demands, market conditions, and inflation are just some of the few factors that keep companies from slashing operating costs. Some businesses cope by implementing new strategies, such as outsourcing, which can result in significant cost savings.
3. POOR PRODUCTIVITY MANAGEMENT
In property management, every minute must be spent wisely. Staff may constantly be bombarded with multiple requests or simultaneous inquiries, causing employees to feel overwhelmed at times. Businesses feel like there is not enough time in the day to accomplish tasks.
Focusing on core tasks and being efficient are two key factors in productivity management. Without proper management, staff tend to spend more time on non-income-generating activities.
4. KEEPING UP WITH TECHNOLOGY
The new tools, platforms, and software being developed are pushing the value of real estate globally. Unfortunately, most property management firms struggle to keep up with the ever-changing technologies in the market.
Even though these innovations were created to make property management easier, a number of companies find it hard to transform processes digitally. Aside from the costs, businesses also find employing new staff or training current staff to use these tools time-consuming and expensive.
5. SMALL PROFIT MARGINS
Property management as an industry is valued at US $101.3 billion. Although its overall growth is projected to have an upward trend, some businesses struggle to generate more profit and revenue due to factors such as lesser use of commercial spaces, location choice, ballooning interest rates, and more.
Firms that are able to grow revenue face smaller profit margins as they use the increased revenue to further grow their business.