By Grant Drzyzga
In the winter of 2013, I found myself shivering in my college apartment, a hair dryer running beside me as a makeshift heater. The heating outage lasted three nights. Frustrated yet curious, I visited the property management company’s office—not to complain, but to learn. I asked if I could shadow their operations under the guise of a “class assignment.”
What I discovered was chaos: stacks of disorganized paper and fragmented, outdated software systems. The inefficiency was glaring, and it sparked a vision that would later become Revela: a unified platform designed to optimize property management and create a seamless experience for property managers, investors and residents. Fast forward to today. Revela is helping property managers and real estate investors tackle the challenges of a rapidly evolving industry. As we look ahead to 2025, the trends shaping the property management landscape are clear.
Here’s how you can navigate these changes and position yourself for success.
1. Mandatory Renter’s Insurance: Protecting Your Assets
One of the most significant trends we’re seeing is the tightening of insurance requirements. In high-risk markets like Detroit and St. Louis, insurance carriers are mandating that residents carry renter’s insurance as a condition for insuring the property. This places an additional burden on property managers to track compliance and manage lapses. This trend underscores the importance of staying ahead of compliance issues. Maintaining 100% compliance with these insurance requirements will safeguard against claim denials and protect your assets from unforeseen risks.
How to Prepare:
- Track Policies Proactively: Platforms like Revela can automate
the monitoring of tenant insurance policies, notifying you
instantly if a policy lapses. - Update Lease Agreements: Include clauses that allow for a
damage liability waiver, ensuring continuous coverage even if a
tenant’s policy lapses. - Integrate Solutions: Work with partners to streamline policy
underwriting, binding, and tracking through your management
system.
2. Acquisition Growth Amid Lower Interest Rates
With interest rates projected to decrease, the pace of acquisitions is likely
to accelerate in 2025. Property management companies have a unique opportunity
to capitalize on the surge in transactions by aligning themselves with brokers, investors,
and lenders.
By tailoring your efforts to investor preferences and fostering relationships, you can position your company as a vital partner in the acquisition process.
How to Prepare:
- Vendor Partnerships: Build a strong network of vendors and
brokers to simplify transactions and add value to your services. - Targeted Outreach: Proactively identify opportunities
that match your investors’ “buy box” criteria—a set of
parameters that determine what makes a property a desirable
purchase. For example, many investors prioritize geographic
concentration to achieve operational efficiencies.
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3. Harnessing the Power of Data
Data has always been the cornerstone of good decision-making, yet the property management
industry often lags in this area. Disconnected systems and incomplete datasets make it difficult to understand the full picture.
When my co-founder, John DeSilva, and I built the first version of Revela, we spent many sleepless nights focusing on how to make data actionable for property managers and investors. Today, our all in-one platform empowers you with insights, so you can make better decisions and identify growth opportunities.
How to Prepare:
- Centralize Your Data: Use a platform like Revela to aggregate operational and financial
information. This provides a complete view of asset performance. - Leverage Predictive Insights: Advanced analytics can help you identify trends, like when
investors have enough equity to reinvest or when expenses are out of alignment. - Enhance Transparency: Open communication with investors about key performance
metrics can build trust and alignment.
4. Meeting Rising Investor Expectations
Over the past decade, the gap between casual and professional investors has narrowed. Whether managing single-family homes or multifamily units, investors increasingly expect property managers to provide more than just operational oversight.
Investors are looking for property managers who bring a strategic mindset to the table, not just day-to day management.
How to Prepare:
- Define Success Early: Align with investors on clear goals, whether that’s achieving a
specific return percentage or optimizing cash flow. - Stay Educated: Keep up with market trends and regulatory changes to maintain your edge
as a trusted advisor. - Provide Value-Added Insights: Go beyond NOI (Net Operating Income) to help investors
understand how debt, equity, and operational strategies impact their portfolios.
THE PATH TO SUCCESS
The property management world of 2025 is not the same as it was a decade ago—or even five
years ago. Insurance mandates, increased acquisitions, data-driven strategies, and rising investor expectations are reshaping the landscape. But these changes also present immense opportunities for those willing to adapt.
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Provided by the Rental Housing Journal
Property management and the essential role of policies, written communication and procedures for the year ahead.
As the new year begins, property management professionals have the opportunity to reflect on foundational practices that ensure both compliance and operational excellence.
Among these, few aspects are as critical as robust fair housing policies, well-defined procedures, and professional written communication.
The Importance of Fair Housing Policies and Procedures
Fair housing policies and procedures serve as the backbone of any property management operation, regardless of the size of the portfolio.
They provide a clear framework for staff to understand their responsibilities and adhere to fair housing laws, ensuring consistent application of these principles across the board. Moreover, well-documented policies act as a vital defense mechanism during fair housing investigations, demonstrating that actions taken were in line with established guidelines.
For property management companies of all sizes, the creation of a basic fair housing policy is non-negotiable.
However, it is not enough to simply draft a policy and let it sit idle. These documents must be living resources, regularly reviewed and updated to reflect changes in legislation or operational needs.
In addition to a general fair housing policy, companies should implement specific procedures addressing reasonable accommodations and modifications. These procedures must clearly outline the steps for processing requests and define the roles of staff members responsible for decision-making.
To ensure these policies are accessible and actionable, many companies utilize a centralized policy manual.
This resource serves as a go-to reference for staff, housing key documents such as fair housing policies, reasonable accommodation procedures, and supporting forms. Regular training sessions are critical to reinforce the importance of these policies and ensure all employees understand their role in maintaining compliance.
The Role of Written Communication in Fair Housing Compliance
In the property management industry, written communication is not merely transactional; it is a direct representation of your company’s brand and commitment to professionalism.
Emails, letters, and even social media responses all fall under the umbrella of marketing and must align with fair housing principles. As such, every written response must be crafted carefully to avoid potential issues of discrimination or misrepresentation.
One area where this is particularly critical is in responding to inquiries about unit availability.
Consistency in responses is essential to prevent any appearance of favoritism or bias. For example, if two prospects inquire about the same unit, the responses they receive should not differ in ways that could be perceived as discriminatory.
All leasing professionals should be equipped with standardized language to address these situations, ensuring a uniform and compliant approach.
Another consideration is the tone and content of written communication with residents.
Professionalism must be maintained at all times, even when dealing with difficult or hostile situations. Emails represent an official form of communication, and as such, they should be approached with the understanding that their contents may later be scrutinized in legal or regulatory contexts.
It is critical to remain composed, clear, and respectful, avoiding language that could escalate tensions or be misinterpreted.
Balancing Efficiency and Personalization in Written Responses
While templates and canned responses can improve efficiency, their use must be approached with care.
Generic responses may be suitable for common inquiries, but personalized communication is necessary for more nuanced or unique situations.
A failure to adapt responses to the context can leave residents or prospects feeling dismissed, potentially damaging the relationship and raising questions about the company’s commitment to fair housing principles.
This is where training becomes invaluable.
Staff must be equipped with the knowledge and judgment to discern when a situation requires a tailored response. Ongoing training programs should address not only the technical aspects of fair housing compliance but also the soft skills necessary to bring a human element to written communication.
This balance between professionalism and empathy is what distinguishes truly effective property management operations.
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Preparing for Success in the Year Ahead
The start of a new year offers the perfect opportunity to review and strengthen your company’s policies and communication practices.
Begin by conducting a thorough audit of your fair housing policies and written communication guidelines. Identify any gaps or areas in need of refinement, and make it a priority to address them.
It is equally important to engage your team in this process. Gather feedback from staff on the challenges they face when applying policies or crafting responses, and use this input to inform updates and training programs.
Establish a schedule for regular policy reviews and training sessions to ensure these foundational practices remain top of mind throughout the year.
Finally, remember the power of written communication as a tool to build trust and foster positive relationships.
By prioritizing consistency, professionalism, and a human touch, your team can set the tone for a successful year while reinforcing the company’s commitment to fair housing compliance and exceptional service.
Conclusion
In the property management industry, success is built on a foundation of strong policies, clear procedures, and professional communication.
As the new year begins, take this opportunity to reaffirm your commitment to these principles. By investing time and effort into refining your fair housing policies and enhancing written communication practices, you can navigate the complexities of property management with confidence, fostering trust and compliance in every interaction.
Let this year be one of growth, consistency, and renewed dedication to excellence.
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Provided by Bigger Pockets
I don’t know when the next recession will strike. It could come over the next year, or in five years from now.
But I do know that sooner or later, another recession will rear its ugly head. And I don’t want my portfolio to collapse when it does.
Every month, I meet online with dozens of other investors to vet a new passive real estate investment, as an organizer of SparkRental’s Co-Investing Club. When we vet investments together, we consider risk first and foremost. And one of the risks that we consider is, “How would this investment hold up in a recession?”
While no investment is 100% recession-proof, some real estate investments perform better than others in recessions. So which investments offer the best protection if the economy takes a turn for the worse?
1. Multifamily With Some Form of Rent Protection
If a tenant is lucky enough to score a rent-controlled unit that goes for hundreds less than the going market rate, they’ll move heaven and earth to keep it. They won’t default on rent until they’ve exhausted every possible path to paying it.
But rent-controlled units offer just one example of many. In the Co-Investing Club, we invested last year in several properties that set aside 50% of the units for affordable housing. The operator partnered with the local municipality and agreed to cap rents based on local median incomes for those units—in exchange for a property tax abatement. The tax savings adds far more cash flow than was lost on market rents.
Those units have a waiting list to this day, and in a recession, they’ll still likely maintain 100% occupancy.
In another case, we invested in a “Section 8 overhang” deal, where the operator bought a Low-Income Housing Tax Credit property, and used a loophole in LIHTC regulations to replace all the tenants with Section 8 voucher holders. They keep the tax credits, collect full market rents, enjoy a government guarantee on most of the rental income, and have an avid renter base that doesn’t want to lose their voucher benefits by defaulting. It, too, will do just fine in a recession.
These are just a few examples of rent-protected units that become even more coveted in a recession.
2. Tenant-Owned Mobile Homes
To begin with, mobile homes offer the ultimate affordable housing, and tend to do just fine in recessions. But investors can protect themselves from rent defaults even better by renting mobile home lots for homes they themselves own.
Fewer of these renters default, because lot rents are cheap, and it’s so expensive to move a mobile home. And if a renter does default, it’s easier for park owners to evict them from a land lease than a typical residential eviction.
Keep an eye out for mobile home park investments specializing in tenant-owned homes, rather than renting out park-owned homes.
3. Student Housing
In recessions, many young adults opt to skip the bad job market and go back to school. That keeps demand for student housing high, even in recessions.
Just make sure you protect against all the usual risks of student housing investments, such as property damage and higher turnover rates.
4. Self-Storage
In the Great Recession, the only property type that didn’t suffer losses was self-storage.
Why? Because in recessions, people tend to either downsize or move in with family or friends. Both options leave them with less room for their stuff. They need somewhere to put their Furby collection, so they rent a storage unit.
Unfortunately, many local markets have become oversaturated with self-storage facilities in the years since the Great Recession. Before investing as a fractional owner in a storage facility, do your homework on the local market and competition.
5. Healthcare Facilities
People still need medical care, regardless of the economy. That provides recession resilience to some healthcare facilities.
Some—but not all. Sure, patients still visit the cardiologist after a heart attack, but fewer people go in for cosmetic and other elective surgeries. If you want recession protection, look for healthcare facilities that service the fundamentals.
Assisted living facilities can also prove recession resilient, depending on the segment of the market they service, and the local competition. Look for facilities with a long waiting list, indicating plenty of local demand relative to supply. That demand will likely soften in a recession, as some families consider moving in together rather than enrolling their loved ones in a nursing home.
6. Some Industrial Properties
When it comes to recessions, not all industrial properties are created equal.
Data centers, for example, do just fine in recessions. If anything, people spend more time at home sitting in front of their computers during recessions.
Likewise, industrial properties that manufacture necessary consumer goods like toilet paper hold up well.
But those that specialize in luxury goods or elective services? Expect them to struggle in a downturn.
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Diversification vs. Concentration
I have no idea what the next hot asset class will be, or the next hot market. The same goes for the inverse: I don’t know which properties will struggle in the years to come.
Trying to get “clever” or to time the market are fool’s errands. Every time I tried to get “cute” with my investments, I lost.
Nowadays, I invest $5,000 each month in real estate, as a form of dollar-cost averaging. I now own a fractional interest in around 3,000 units, spread across the U.S., in every property type. I invest as simply one more member of SparkRental’s Co-Investing Club, spreading small amounts of money across many markets, property types, and operators.
As I get to know an operator better, I’ll invest more with them. But in the beginning, it helps to invest small amounts before betting the proverbial farm.
Remember, recessions hit different cities differently. Some experience deep depressions, with sweeping job losses and business closures. Other cities see virtually no change at all, or even grow. Diversifying geographically helps you reduce your overall recession risk.
What Real Estate Investments Do Poorly in Recessions?
Class C and D multifamily properties that charge market rents tend to see spikes in rent defaults and vacancy rates in recessions. The same goes for many retail properties and office buildings. Some businesses go under in recessions, and others consolidate or switch to remote work and servicing.
House flipping and wholesaling businesses also struggle in recessions, as home prices drop. If the after-repair value drops by 5%, that can wipe out the entire profit margin on a flip or wholesale deal.
High-end vacation rentals often sit vacant in recessions. Fewer families can afford to spend five figures for a week in Cape May, so they plan more reasonable vacations while the budget is tight.
Finally, watch out for deals financed with short-term debt, and those with thin cash flow. In a recession, investors need the ability to ride out the bad market. That means they need longer-term financing and strong cash flow so they don’t find themselves losing money each month. If you have the luxury of time, you can wait out the rainy season until sunnier days come along.
Read up on these additional risks that our Co-Investing Club checks for as we vet passive investments as a club. You can’t eliminate risk entirely, but you can certainly find asymmetric investments offering low potential risk and high potential returns.
The Upside of Recessions for Real Estate Investors
On balance, recessions are no fun for anyone, real estate investors included. But they do come with several silver linings.
First, interest rates plummet. That makes it cheap to borrow, letting investors refinance high-interest debts or buy new properties with low-interest loans.
Speaking of buying, property prices tend to dip. That creates plenty of bargains for investors intrepid enough to keep buying while everyone else panics. In 2009, the average home price dropped to $208,400. Bet you wish you could buy average homes at that price today!
Recessions also clear out some of the less-capable competition, who had been over-bidding and otherwise overcrowding the market.
Like the forest fire that clears the underbrush and makes way for new trees to grow, recessions are painful but necessary. Just make sure you plan for them so they don’t burn down your portfolio, like they have for so many other investors.
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