Property Management KPIs to Track in 2024

Imagine trying to run a bakery that doesn’t measure its ingredients. The same concept applies to property management KPIs — financially successful rental units require precise measurements and tracking. With modern landlord software readily available, there’s no excuse for property managers not to make data-driven decisions.

KPIs for property management help track expenses, tenant happiness, and operating efficiency. In this article, we’re breaking down ten of the most important property management KPIs, including how to calculate them and what the results tell you about your rental properties.

Key Takeaways

• Property management KPIs are the best way to ensure landlords and property managers make informed decisions.
• Financial KPIs such as average rent and revenue growth are essential financial forecasting tools.
• Happy tenants renew leases, reducing unwanted costs — track tenant happiness with core statistics such as retention and turnover rates.
• Optional spending can quickly balloon out of control. Property management KPIs can help you better understand the cost-to-benefit ratios of your marketing initiatives.

The Role of KPIs in Successful Property Management

Let’s be clear — property management KPIs aren’t some golden ticket to success. However, “gut-feeling” business planning is the fastest way to run your rental properties into the ground. KPIs for property management serve as a guiding tool, allowing property managers to make decisions backed by evidence, creating a more efficient and profitable business.

Tracking periodic changes is the best way to optimize your business and trim the fat from your expense sheet. Was my new marketing initiative successful? Look to see if occupancy rates are up and vacancies are down. Am I doing a good job of building tenant relationships? Look at tenant retention and turnover. Should I invest in a new building? Figure out its net operating income.

Landlords who want to minimize risk, streamline their business, and set realistic goals should incorporate property management KPIs into their daily business operations. Below, we’ll explore several KPIs to help you get started. Though it’s not a comprehensive list, we highlight 10 of the most vital KPIs for property management.

Let’s get started.

Essential Property Management KPIs for 2024

Occupancy Rate

Keeping your units full is the gold standard for all property managers. Occupancy rates tell you how many of your units currently have tenants and are one of the most important property management KPIs:

Occupancy Rate = (Occupied Units / Total Units) x 100

According to the U.S. Census Bureau, the high demand for rental units has led to a 93.4% national occupancy rate. Differences in local markets may impact individual benchmarks, but property managers should closely monitor occupancy rates to help inform their business strategy.

Higher than average occupancy rates may indicate that your property is highly desirable, indicating the need for a rent raise. Conversely, suboptimal occupancy rates may indicate a systemic concern about your units keeping renters away.

Tenant Retention Rate

Renewing a happy tenant’s lease is much better for business than finding a new tenant. Track how successful you are at getting tenants to renew their lease:

Tenant Retention Rate: (Renewed Leases / Total Expired Leases) x 100

Averaging a 60% tenant retention rate should be the goal for all property managers. Poor communication, inadequate maintenance, limited amenities, and excessive rent increases may lower retention rates.

Tenant Turnover Rate

As established above, perfect tenant retention is impossible. Property managers can more accurately forecast their budgets by calculating their overall turnover:

Tenant Turnover Rate: (Non-Renewed Leases / Total Units) x 100

With tenant turnover costs around $4,000 per resident, property managers need to accurately forecast the cost of unit repairs, marketing, and new lease generation. Failing to do so can create cash shortages that bottleneck your operations.

Vacancy Rate

In most cases, empty properties are a huge negative asset, with vacancy losses severely impacting a landlord’s cash flow. Vacancy rates represent the percentage of units in your portfolio without a tenant and can easily be calculated:

Vacancy Rate = (Vacant Units / Total Units) x 100

In 2024, the average rental vacancy rate is around 6.6%, with the last few years having some of the best numbers of the previous two decades. High vacancy rates may indicate that you’re charging too much, need to market your listings better, or should increase amenities to attract tenants.

Average Days to Lease

Property managers must walk the tricky tightrope of simply lowering rents to quickly fill units versus bleeding costs from taking too long to find a new tenant. The amount of time it takes to fill a unit can be a key indicator of the success of your marketing efforts:

Average Days to Lease = Total Vacant Days (for all units) / New Leases

Having excellent rental property listings is one of the easiest ways to reduce this average. If your time to fill vacant units remains high for too long, you’re likely to save money in the long run by reassessing rent pricing and investing in aggressively marketing the empty units.

Net Operating Income

One of the less obvious property management KPIs is Net Operating Income (NOI), which forces property managers to take a holistic look at the financial health of their properties:

Net Operating Income = Total Income – Operating Expenses

Rent revenue is a simplistic model that only sometimes translates to profitability. Property managers must subtract all operating expenses (such as maintenance, insurance, and marketing) from the property’s total income, including smaller revenue streams such as parking fees, to accurately assess their property’s profitability.

Revenue Growth

Whether looking at quarterly growth or, more broadly, at annual increases, understanding how much your revenue is growing can be a vital indicator of the long-term stability of a landlord’s rental properties. Here’s how to figure out your percentage of revenue growth for any given period:

Revenue growth = ((Current Period Revenue – Previous Period Revenue) / Previous Period Revenue) x 100

For example, if your 2023 revenue was $100,000, and your 2024 revenue was $105,000, your revenue growth would be ((105,000 – 100,000) / 100,000) x 100 = 5%.

As the old saying goes, a dollar today isn’t worth a dollar tomorrow. Beyond simply tracking your business’s growth, it’s important to see whether revenue growth is keeping up with inflation. Falling behind inflation could endanger the long-term stability of your rental properties as the business slowly becomes less profitable.

Average Rent

One of the simplest property management KPIs is also one of the most crucial. Average rent calculates the mean rental value for all units:

Average Rent = Total Rent Revenue / Total Units 

Optimizing revenue requires careful planning. Raising rent too often or too high may cause you to lose money due to high turnover rates and increased vacancies. Comparing your average rents to the local market can help assess the competitiveness of your rental properties.

For property managers with a large diversity of unit sizes, consider standardizing the average rent per square foot.

Resident Acquisition Costs

A firm grasp of marketing costs can help you balance rent prices and your marketing budget. Calculate how much you spend to attract a new tenant with this formula:

Resident Acquisition Costs = Total Marketing Spend / New Residents

High spending on marketing may indicate that you need to change your approach and do more research into your local market to find alternative messaging that resonates with potential tenants.

Average Maintenance Costs

As one of the highest operating costs for rental properties, maintenance costs should be closely tracked and periodically reassessed. Find your average unit maintenance cost with this formula:

Average Maintenance Costs = Total Maintenance Cost / Total Units

A good general rule of thumb is to keep maintenance costs under 1% of the property’s value. If costs have risen too high, it may be time to look for new contractors and material supply companies for your repairs.

In addition, it’s easy to overlook the cost of in-house repairs when creating a maintenance budget—property managers with an in-house team should include these salaries to prevent maintenance cost overages.

Property Management KPI Conclusion

Each of these KPIs helps to paint a larger picture of your rental properties’ overall business health. Simply understanding how to calculate each KPI is not enough. Use the above insights to help you strategically decide on rent pricing, marketing investments, and property upgrades.

TurboTenant doesn’t offer direct ways to calculate these KPIs, but it can help reduce or improve many of the figures depending on what you’re tracking.

For example, using property management software like TurboTenant can help to improve your net operating income because its low cost reduces overhead. Further, TurboTenant can decrease resident acquisition costs because property listings and tenant screenings are free for landlords.

Finally, TurboTenant helps improve revenue growth because the cost stays the same no matter how many units you purchase and manage in the future. TurboTenant’s software is available in two tiers: free and a low-cost Premium plan.

Sign up for a free account today and move your property management KPIs in the right direction.