As 2025 approaches, the property management landscape – particularly for community associations – is undergoing tremendous change. A new generation of homeowners, rising economic pressures, and the growing role of technology are forcing management companies to rethink their strategies. From delinquencies to operational efficiencies, staying ahead means embracing innovative solutions to support both communities and managers.
1. New Homeowners Will Enter the Market with Greater Financial Strain
Millennials and Gen Z are redefining what it means to be a homeowner. While these younger generations are entering the housing market, they face significant financial challenges, including inflation, student debt, and higher housing costs. Many are spending upwards of 40-50% of their income on housing, leaving little room for unexpected expenses like increased HOA assessments.
At the same time, HOA assessments continue to increase. The cost to maintain a homeowner’s association, coupled with surging insurance hikes, will be just as big of a problem in 2025 as it was in 2024. Unfortunately, for many homeowners, these price increases are outpacing cost of living increases.
This trend signals an increased likelihood of delinquencies within community associations. AI-powered platforms like TechCollect are built to meet the communication patterns of younger homeowners while addressing financial pressures – and these tools will be essential for management companies to continue servicing their homeowners with compassion.
2. Management Companies Will See Portfolio Growth Decline – Making New Revenue Streams Essential
While portfolio growth continues to be a leading focus for nearly all property management companies, the rapid expansion seen in recent years is beginning to slow.
According to Buildium’s State of the Industry Report, 91% of property management companies plan to grow their portfolios in 2025 and 2026. However, when asked about their growth targets, more companies indicated plans for a moderate increase of 25% or less. This is a notable shift toward a more measured and sustainable pace of expansion.
As the community association management space continues to be fraught with acquisition and surging competition, increasing base management fees comes at a price – fewer clients. This means that it will be absolutely essential for executives to consider new revenue streams beyond the base fee. Working with financial and vendor partners will be key in finding revenue share opportunities that increase growth into the new year.
3. AI is the Key to Operational Efficiency
With rising operational costs and increasingly complex compliance requirements, property management professionals are under more pressure than ever. As demands grow, AI and automation are becoming essential tools for improving efficiency and maintaining high service levels across communities.
The benefits of AI-driven workflows include:
- Automated Compliance: Ensures state-specific regulations are consistently met for timelines, fees, and payment plans.
- Labor Reduction: Reduces administrative burden, saving the equivalent of 1 full time employee per 10,000 units.
- Improved Accuracy: Minimizes manual errors, leading to greater consistency in processes.
AI-powered tools, like automated communication workflows via SMS, email, phone, and mail, enable property management teams to streamline operations and focus their time on higher-priority tasks without added strain.
4. AI Must Have a Positive ROI
Everyone is talking about new GenAI technology, but few are talking about the ROI of AI. Investors have poured over $55 billion into new AI startups and product lines, but the reality of the matter? Not everyone is going to make money using AI.
For management companies, AI-driven tools must deliver tangible financial results and provide measurable improvements that directly impact revenue and cost savings. For instance, TechCollect’s solution offers top-line revenue growth by upwards of 10 percent – a game-changer for organizations planning for less portfolio growth than the previous year.
When it comes to AI, the bottom line is this: Buzzword product launches are over. Now, management company executives should expect to see real, tangible results.
Preparing for the Future
As the property management industry evolves, the challenges surrounding delinquencies, homeowner expectations, and operational efficiency will only grow. The future belongs to management companies that embrace technology and AI to deliver smarter, faster, and fairer solutions – doing so in a way that drives ROI.
Ready to see how you can prepare for 2025 with TechCollect? Reach out to us to learn about our free trial opportunity.
