Year-End Review: 2025 Property Management Trends That Will Shape 2026

As we close the books on 2025, property management professionals face a landscape transformed by economic pressures, technological innovation, and evolving tenant expectations. This year tested the industry’s resilience while revealing opportunities for those willing to adapt and innovate.

At Credit Gnomes, we’ve had a front-row seat to these changes through our work with property managers across all 50 states. As we look toward 2026, understanding the trends that defined 2025 helps position your business for success in the year ahead.

The Cost Crisis: Rising Expenses Reshape Operations

If there’s one theme that dominated 2025, it’s the relentless pressure of rising costs across virtually every category of property management operations.

Insurance Costs Skyrocket

Property insurance emerged as the single most painful expense increase in 2025, with 71% of property management companies reporting premium increases. More telling, 39% of property managers now rank rising insurance costs as a top business threat—a dramatic jump from 29% in 2024.

The numbers paint a sobering picture. After 27 consecutive quarters of increases, property insurance premiums reached crisis levels for many operators. While some markets saw relief late in the year, the overall trend remains upward, particularly in high-risk states like California, Texas, Florida, Louisiana, and Colorado, where 91.8% of portfolios include properties.

Climate-related events drove much of this increase. In 2025, 56% of portfolios were impacted by both freeze events and named storms, creating insurance claims that rippled through premium calculations industry-wide. Some Florida markets saw Citizens Property Insurance Corporation’s policy count decrease by 19.5% as private insurers returned, but reinsurance costs continue pressuring premiums across disaster-prone regions.

Labor Costs Remain Elevated

While labor shortage concerns eased significantly—dropping from 21% in 2024 to just 16% in 2025—labor costs themselves remained stubbornly high. A staggering 77% of property management companies cited labor as their most painful cost pressure, including both vendor/contractor costs and employee labor expenses.

This created a challenging dynamic: easier hiring but at higher wages. Property managers found themselves able to fill positions but struggling with the financial impact of competitive compensation requirements.

The Domino Effect of Rising Costs

Beyond insurance and labor, property management companies faced increases across the board:

• 64% reported rising utility costs
• 63% saw increases in supplies and materials
• 52% experienced property tax increases
• 50% faced higher technology costs

Operating costs for multifamily rentals increased 9.3% between June 2022 and June 2023, while net operating income growth slowed dramatically to just 3.5%—down from 24.8% in 2021. This compression of margins forced difficult decisions about where to cut costs and where to invest.

The Occupancy Challenge: Maintaining Revenue in Shifting Markets

The second major theme of 2025 was the intensifying battle to maintain occupancy rates and rental income.

Occupancy Becomes Top Concern

For the first time in years, maintaining high occupancy rates emerged as the top business threat for 43% of property management professionals—up sharply from 35% in 2024 and representing a dramatic 20-point increase since 2023 when only 23% identified this as a primary concern.

This shift reflects fundamental changes in rental market dynamics. While national occupancy rates held relatively steady at 93.3%, the distribution was uneven, with some markets experiencing significant softening as new construction increased supply faster than demand could absorb it.

The Rent Growth Dilemma

Property managers faced a difficult balancing act: rising costs demanded rent increases, but market conditions in many areas couldn’t support aggressive pricing. In markets with strong new construction pipelines, attempting to pass through cost increases to tenants often resulted in higher turnover and extended vacancy periods.

The industry response was measured. While 63% of third-party property management companies planned to raise rents or resident-paid fees to cover increased costs, they did so cautiously, aware that renters’ wage growth wasn’t keeping pace with housing cost increases.

Average vacancy days improved slightly to 20 days in 2025 (down from 22 in 2024), while average unit turn time held steady at 12 days. More encouraging, the number of applications per lease increased from 13 in 2024 to 14 in 2025, suggesting demand remained healthy even as competition intensified.

Renewal Rates Edge Higher

One bright spot: renewal rates crept upward to 70% from 69% in 2024. This modest improvement suggests that property managers who invested in tenant relationships and offered value beyond just housing were rewarded with improved retention.

This trend has profound implications for 2026. With the average cost of turnover approaching $1,750 per unit (even without damage or eviction), every percentage point improvement in renewal rates translates directly to bottom-line performance.

Technology Adoption Accelerates: AI Takes Center Stage

The third defining trend of 2025 was the dramatic acceleration of technology adoption, particularly artificial intelligence.

The AI Revolution Gains Momentum

The most significant year-over-year change in the 2025 Property Management Benchmark Report was the 11% increase in respondents adopting AI tools to improve operational efficiency. This wasn’t gradual evolution—it was a sharp acceleration driven by cost pressures and competitive dynamics.

Property managers deployed AI across multiple functions:

Predictive Maintenance: AI-powered systems analyze historical data to forecast maintenance needs, allowing property managers to address issues before they escalate into costly emergencies. This reduces repair costs by 15-25% according to industry data.

Dynamic Pricing Optimization: AI algorithms analyze real-time market conditions, seasonal trends, and property-specific data to recommend optimal rental rates. Companies using AI-powered pricing report revenue increases up to 25% through better rate optimization and reduced vacancy periods.

Automated Communications: Conversational AI handles routine maintenance requests, payment reminders, and frequently asked questions, resolving many inquiries in under five minutes without human intervention. This frees property management staff to focus on complex issues requiring personal attention.

Leasing Intelligence: AI tools flag units likely to turn over months in advance based on payment patterns, lease terms, and historical data, giving property managers more time to prepare targeted leasing strategies.

Broader Technology Trends

Beyond AI, property managers embraced technology across operations:

IoT and Smart Home Integration: Connected devices moved beyond smart thermostats to comprehensive building management systems monitoring everything from water usage to HVAC performance. These systems cut operating costs while meeting growing tenant demand for smart home amenities.

Drone Inspections: Large portfolios increasingly adopted drone technology for property inspections, dramatically reducing inspection time while improving documentation quality. Drones proved particularly valuable for roof inspections, damage assessment after weather events, and marketing materials.

Virtual Tours and Digital Leasing: Remote viewing capabilities became standard rather than optional. The trend toward virtual tours that accelerated during the pandemic continued in 2025, with 74% of rental property searches happening on mobile devices.

Platform Consolidation: Property managers increasingly moved toward integrated platforms rather than cobbling together multiple point solutions. However, the most sophisticated operators balanced consolidation with best-in-class specialized tools through strategic integrations.

Technology Investment Priorities for 2026

Looking ahead, 36% of companies prioritize new technology adoption to increase efficiency in 2026, 32% prioritize better decision-making using data, and 19% prioritize software consolidation.

Online rent payments reached near-universal adoption at 94% (unchanged from 2024), but other payment innovations continued growing:

• Flexible rent payments: 41% in 2025, up from 33% in 2024
• Rent reporting to credit bureaus: 44% (stable from 2024)
• Push and instant payments: 37%
• Security deposit alternatives: 23%

Portfolio Diversification and Growth Strategies

Despite—or perhaps because of—the challenging environment, property managers maintained ambitious growth plans tempered by strategic caution.

Growth Intentions Remain Strong

A remarkable 91% of property managers planned to expand their portfolios over the next two years according to Buildium research. This optimism persisted despite cost pressures and occupancy concerns, suggesting confidence in long-term fundamentals.

However, the nature of growth evolved. Rather than pure unit count expansion, property managers increasingly pursued strategic diversification.

The Rise of Portfolio Diversification

Approximately 31% of property management companies expanded into new property types in 2025, spreading risk across different asset classes and market segments:

Single-Family Rental Growth: The single-family rental sector continued attracting property management attention, particularly as institutional investors remained active buyers and the “accidental landlord” population grew.

Commercial Property Opportunities: Some residential-focused operators added commercial properties to their portfolios, leveraging existing infrastructure and relationships while accessing different revenue streams.

HOA Management Expansion: Homeowners association management emerged as an attractive diversification opportunity, offering steady revenue with different seasonal patterns than traditional rental management.

Mixed-Use Properties: Properties combining residential and commercial uses gained attention, though they require specialized insurance and management approaches.

The Accidental Landlord Phenomenon

One unexpected source of portfolio growth came from what the industry calls “accidental landlords”—homeowners who couldn’t sell their properties due to high interest rates and affordability challenges, so they converted them to rentals instead.

With 57% of renters reporting they can’t afford to purchase a $300,000 home (and median home prices far exceeding that in many markets), many would-be sellers found themselves becoming first-time landlords. These owners often lack property management experience and represent a significant opportunity for professional management services.

Property managers who positioned themselves to serve this market—offering educational resources, transparent pricing, and comprehensive services—captured new business while helping these accidental landlords navigate the complexities of tenant screening, lease agreements, and compliance requirements.

Tenant Experience and Retention Focus

As occupancy concerns intensified and turnover costs remained high, property managers increasingly emphasized tenant experience and retention.

Resident Benefit Packages Gain Traction

Approximately 80% of renters proved willing to pay for additional services according to property management respondents. The most popular services included:

• Internet included (39% of renters)
• Renters insurance (37%)
• Renter rewards programs (29%)
• Pest control (26%)
• Cable TV included (24%)

These resident benefit packages serve dual purposes: they generate ancillary revenue for property management companies while increasing the perceived value of living at managed properties, improving retention.

Credit Building Through Rent Reporting

Rent reporting to credit bureaus remained stable at 44% adoption among property managers in 2025. While not growing rapidly, this stability suggests the service has achieved baseline acceptance as a standard offering rather than a novelty.

At Credit Gnomes, we’ve seen firsthand how rent reporting transforms tenant behavior and property manager operations:

Payment Consistency Improves: Tenants who know their rent payments are building credit treat rent with the same importance as mortgage payments. Industry data consistently shows 79-80% on-time payment rates when rent is reported.

Retention Increases: Tenants building credit through rent reporting have strong incentives to renew leases rather than moving to properties without reporting, protecting their credit-building momentum.

Tenant Acquisition Advantage: More than half of renters (57%) indicate they’re more likely to rent from property managers who report payments to credit bureaus, creating a competitive advantage in tight markets.

Revenue Protection: By reducing evictions and late payments, rent reporting protects revenue and reduces costly collection activities.

The approval of VantageScore 4.0 for mortgage lending in 2025 made rent reporting even more valuable, creating a clear path for renters to convert positive rental payment history into mortgage qualification.

Community Building and Engagement

Beyond financial services, successful property managers invested in community-building initiatives. Properties with strong community engagement—resident events, digital communication platforms, responsive maintenance—saw higher retention rates and positive online reviews that influenced prospective tenant decisions.

Sustainability and Green Building Initiatives

Environmental considerations continued gaining importance in 2025, driven by both tenant preferences and operational cost management.

Tenant Demand for Sustainability

As of 2024 data extending into 2025, 60% of residents indicated willingness to pay a premium for eco-friendly buildings. This preference was particularly strong among younger demographics who will dominate the rental market in coming years.

Property managers responded by:

• Installing energy-efficient appliances during unit turns
• Upgrading to LED lighting in common areas
• Implementing water conservation measures
• Pursuing green building certifications where economically viable
• Highlighting sustainable features in marketing materials

Cost Savings Drive Green Investments

Beyond tenant preferences, sustainability initiatives often delivered measurable cost savings through reduced utility consumption. Smart thermostats, water-saving fixtures, and energy-efficient HVAC systems paid for themselves over time while reducing ongoing operating expenses.

Insurance companies also began offering benefits for certified green buildings and environmental technologies, providing additional financial incentives for sustainable property management practices.

Regulatory Compliance Complexity

Government regulations ranked as a top concern for 26% of property managers in 2025, reflecting the increasingly complex compliance landscape.

State-Level Rent Reporting Mandates

California and Colorado led the way with rent reporting requirements, with California mandating rent reporting and Colorado requiring property managers to offer it to tenants. These regulations signal a broader trend toward recognizing rent reporting’s importance for financial inclusion.

Property managers with multi-state portfolios needed scalable solutions that ensured compliance across varying state requirements without creating operational burdens.

Fair Housing and Non-Discrimination

Fair housing enforcement remained active in 2025, with property managers needing to ensure their tenant screening processes, advertising language, and operational procedures complied with federal, state, and local fair housing laws.

The complexity increased as some jurisdictions implemented source-of-income protections requiring landlords to accept housing vouchers, while others banned certain types of criminal background checks or credit score requirements.

Lead Paint, Mold, and Environmental Compliance

Environmental compliance issues, particularly lead paint disclosure requirements and mold remediation protocols, continued requiring careful attention. Property managers needed clear procedures for inspections, disclosures, and remediation to avoid potential liability.

What This Means for 2026: Strategic Imperatives

As we look toward 2026, five strategic imperatives emerge from the trends that defined 2025:

1. Master the Cost-Efficiency Equation

With operating costs unlikely to decrease significantly, property managers must find efficiencies through technology adoption, process optimization, and strategic vendor relationships. The winners in 2026 will be those who can deliver excellent service while controlling costs through smart automation and data-driven decision making.

Technology investments should focus on tools with clear ROI: predictive maintenance reducing emergency repairs, dynamic pricing optimizing revenue, and automated communications freeing staff time for high-value activities.

2. Prioritize Retention Over Acquisition

With turnover costs approaching $1,750 per unit and occupancy concerns intensifying, every percentage point improvement in renewal rates significantly impacts profitability. Property managers should invest in tenant relationship management, proactive maintenance, community building, and value-added services that make tenants want to stay.

Rent reporting programs fit squarely into this strategy, creating tangible value for tenants while improving payment consistency and retention for property managers.

3. Embrace Data-Driven Decision Making

The most successful property managers in 2026 will be those who effectively leverage data analytics for pricing decisions, maintenance scheduling, tenant screening, and portfolio management. As 32% of companies prioritize better decision-making using data, those who fall behind risk competitive disadvantage.

This requires both the right technology infrastructure and the analytical capabilities to extract actionable insights from available data.

4. Diversify Thoughtfully

Portfolio diversification reduces risk exposure, but only when executed strategically. Property managers should consider expansion into new property types, geographies, or service offerings that leverage existing capabilities while accessing new revenue streams.

The accidental landlord market presents particular opportunity for companies that can deliver education and comprehensive services to first-time rental property owners.

5. Position for Regulatory Evolution

Rent reporting mandates in California and Colorado likely represent the beginning of broader regulatory trends. Property managers who proactively implement rent reporting and other tenant-friendly practices position themselves ahead of potential future requirements while differentiating their services.

Similarly, staying current with fair housing requirements, environmental regulations, and local tenant protection laws protects businesses from compliance issues while demonstrating professionalism.

Credit Gnomes: Your Partner for 2026 Success

At Credit Gnomes, we’ve built our business around understanding property management trends and delivering solutions that address real operational challenges.

Comprehensive Rent Reporting Solutions

Our platform reports tenant payments to Equifax, Experian, and TransUnion, ensuring maximum credit-building benefit regardless of which scoring model lenders use. With VantageScore 4.0 now approved for mortgage lending, rent reporting has never been more valuable for tenants working toward homeownership.

Operational Benefits Beyond Credit Building

Property managers partnering with Credit Gnomes consistently report:

• Improved on-time payment rates (79-80% industry average)
• Reduced eviction rates and associated costs
• Higher renewal rates as tenants value credit-building benefits
• Competitive advantage in tenant acquisition
• Ancillary revenue opportunities through resident benefit packages

Seamless Technology Integration

We integrate with major property management software platforms, automating reporting processes so they require minimal ongoing effort. After initial setup, rent payments are reported automatically each month.

Multi-Property Type Expertise

Whether you manage multi-family residential, single-family rentals, commercial properties, or HOA communities, Credit Gnomes provides tailored solutions that work for your specific situation.

Compliance and Support

We handle Fair Credit Reporting Act compliance, dispute resolution, and accuracy verification, protecting property managers from potential liability while ensuring tenants receive accurate credit reporting.

Looking Ahead with Confidence

2025 tested the property management industry’s resilience with rising costs, occupancy challenges, and rapid technological change. Those who adapted—embracing technology, prioritizing retention, and delivering tenant value—positioned themselves for continued success.

As we enter 2026, the trends that defined 2025 will continue evolving. Cost pressures will persist, technology will advance further, and tenant expectations will continue rising. But these challenges also create opportunities for property managers willing to innovate and invest in solutions that deliver measurable value.

Rent reporting represents one of the most cost-effective investments property managers can make, addressing multiple priorities simultaneously: improving payment consistency, enhancing retention, differentiating services, and potentially positioning ahead of future regulatory requirements.

The property managers who thrive in 2026 will be those who recognize that today’s tenants expect more than just housing—they expect partnerships that support their financial wellness and long-term goals. By offering services like rent reporting through Credit Gnomes, property managers transform from landlords into partners in their tenants’ financial success.

Ready to position your property management business for success in 2026? Contact Credit Gnomes today for a free consultation and discover how rent reporting can help you address the challenges and capitalize on the opportunities ahead.

About Credit Gnomes: Credit Gnomes specializes in credit reporting services for the property management industry, serving residential, commercial, HOA, and mixed-use properties across all 50 states. Our mission is to help property managers improve collections while empowering residents to build credit and achieve financial stability.

Publication Date: January 12, 2026