Interest in income generating rentals has skyrocketed due to their ability to grant renters more living space at more affordable prices, without the need to qualify for a mortgage.

With people of all ages finding themselves shut out of the competitive housing market, they’re on the hunt for rentals that can accommodate their evolving needs and preferences, and they may remain in the rental market for longer than previous generations.

Though the surge in interest has also created some competition between small-business property managers and larger investment and management firms, smaller companies’ ability to provide personalized customer service will continue to differentiate them from larger competitors.

The pandemic has shined a spotlight on the value of property managers’ services, particularly amidst rapidly shifting regulations and local market conditions. 3 in 5 property managers believe that their clients see more value in their services today than they did prior to the pandemic; and they’re noticing an increase in demand for their professional expertise, above and beyond the duties they’ve traditionally fulfilled.

More Regulatory Anxiety Means More Reliance on Property Managers

Rental owners are becoming increasingly reluctant to self-manage their properties in the face of increased regulations and resident-related issues. As a result, we’ve seen an increase in the number of rental owners who work with a property manager to run their properties, rising from 55% before the pandemic to 64% during the height of the crisis, and stabilizing at 61% in mid-2021. In particular, 25% of rental owners who currently work with a property manager say that they primarily do so to ensure that their properties are being run in compliance with current regulations.

More Investor Clients Means More Interest in Expertise-Based Services

Investors are increasingly looking to property managers as trusted advisors on local market conditions and effective rental property operations. As a result, property managers are experiencing greater demand for expertise-based services, with the number of rental owners seeking services like financial, investment, and legal advice increasing by 7 percentage points since 2019.

More Resident-Related Issues Means More Work for Property Managers

Property managers’ ability to attract and retain great residents has become a key component of their value in rental owners’ eyes. In our most recent survey, 48% of rental owners reported that they hired a property manager primarily because they needed help managing their residents—an increase of 6 percentage points in the last year alone. Property managers are leveraging tenant screening to verify that renters have stable sources of income, and they’re crafting watertight leases to protect rental owners’ interests when evictions are restricted.