Generating enough revenue to compensate for rising costs remains a top challenge for property management companies in 2025.
Even as the pace of inflation has slowed down, expenses like labor, materials, and insurance remain higher than they once were.
This reality has companies feeling held back from growing at the pace they did in the past—though our data suggests that this may not actually be the case.
In this installment of our research content series The Lookout, we’ll take a look at how elevated costs have impacted companies’ expectations for revenue growth over time, and the tactics they’re using to achieve growth in spite of this.
Property Management Companies’ Rate of Revenue Growth
In Buildium’s most recent survey of thousands of property management professionals, 91% said they expected their company’s revenue to increase over the next two years.
But when we look at the rate of growth that companies expect, we can see that they anticipate a slower pace of revenue growth over the next two years than they did back in 2023.
Companies are also reporting less growth than they did in the recent past, with 84% saying that their revenue has increased over the past two years, compared with 89% in 2023.
But before we conclude that companies’ pace of revenue growth is slower than it once was, let’s take a moment to zoom out and look at the previous eight years of survey data we’ve collected.
In 2024, we can see that more companies reported equivalent or greater revenue growth than they did in any year between 2017 and 2022.
On one hand, companies are anticipating less revenue growth over the next two years than they projected in 2022 and 2023.
But on the other hand, their growth expectations are, again, equivalent or greater than their expectations back in 2019 and 2020.
Factors Impacting Property Management Companies’ Profitability
So, what’s going on here? Elevated costs have companies feeling like they’re barely treading water—but they’re actually anticipating and achieving more growth than they did in the past.
Which costs are hurting companies the most? 3 in 4 survey respondents agreed that prices had increased most in four areas of the business: costs for third-party vendors, property insurance, property taxes, and materials and supplies.
But rising costs aren’t the only thing putting pressure on third-party property management companies’ profitability. Our research shows that two services that businesses have previously relied on are generating less revenue than they once did.
First: Leasing has become less profitable, with renters moving less often than they have in previous years.
And second: Brokering property sales is also less profitable, with rental owners buying and selling fewer properties in the current market.
This has put pressure on two other services to generate more revenue to make up for the income they’ve lost: rent collection and maintenance.
But rents can only be raised so high to cover increased costs when renters’ wage growth isn’t keeping up.
And it’s difficult for maintenance services to turn a profit when labor and supply costs have risen so far.
How Property Management Companies Plan to Increase Their Revenue
So, what are the tactics that companies will engage to grow their revenue over the next two years?
▶ 42% of companies will leverage technology to drive greater efficiency across their business—for example, by using technology to collect rents and organize maintenance tickets.
Plus, the right property management software could potentially decrease companies’ overhead by requiring fewer full-time employees.
▶ 41% will expand the services they provide.
The five most common services they plan to add are: rent and fee collection; purchasing, selling, and brokering property sales; financial and investment advice; leasing properties and marketing vacancies; and construction and renovation.
However, two of these services are those that property managers tell us are generating less revenue for them due to decreased transaction volume, so that’s definitely something to consider.
▶ 38% of companies will increase their revenue by raising their rates or other client-paid fees.
▶ And 36% of companies will make value-add updates to the properties they manage to rent them at higher rates.
In summary: It’s not easy to achieve profitability when so many costs have increased. But hopefully, we’ve given you some ideas that you can put to work in your own business in 2025.
The 2025 State of the Property Management Industry Report
If you’re looking for more research on successfully operating a property management company in the current market, you’ll find it in our 2025 Property Management Industry Report—download your free copy now.
The report dives into:
- How companies plan to grow their portfolios in a rapidly evolving climate
- How they’re tackling challenges related to maintenance, staffing, leasing, and efficiency
- How companies can attract and retain high-quality renters and rental owners
- And so much more
And be sure to subscribe to our YouTube channel for more intel on the rental market and property management industry.
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