Top 6 Property Management Challenges and How to Solve Them

Managing a property is rewarding, but it comes with plenty of challenges. Without the right systems, these problems can quickly lead to stress, financial loss, and frustrated tenants.

The good news is that most of these issues can be solved with the right approach and consistent planning. From improving tenant relations to using technology for property management, there are practical ways to keep your property running smoothly.

In this article, we’ll look at the top 6 property management challenges and share clear, actionable steps you can take to solve them.

1. Compliance with Property and Housing Laws

Property and housing laws set the ground rules for how rental properties must be managed. They cover areas like health and safety, tenant rights, building codes, accessibility standards, and fair housing.

These rules can often change and differ between cities, counties, and states. If you are not aware of what applies to your property, you could unknowingly break the law.

The consequences can be serious. Fines, penalties, lawsuits, and damage to your reputation can follow even small mistakes. For example, a lease that does not meet local rules can be challenged by a tenant.

Raising rents without consulting new laws is also another big issue. In fact, one recent case even had landlords paying fines up to $2000 for raising rents beyond the state’s newly enforced limits.

Skipping safety regulations during renovations can lead to stop-work orders or insurance issues. Even failing to give enough notice before entering a unit can strain your relationship with tenants.

How To Avoid These Problems

Staying on the right side of property and housing laws is one of the biggest responsibilities for any property owner or property manager. The steps below will help you stay compliant and keep your investments safe.

Stay Updated On Local, State, And Federal Laws

Property managers face legal risks when they don’t keep up with new rules. Laws like the Landlord Retaliation Act and Flood Risk Disclosure in 2025 show how quickly requirements can change.

Avoid this by subscribing to email alerts from your state housing department, local landlord association, and the U.S. Department of Housing and Urban Development (HUD).

HUD also publishes updates on Fair Housing Act enforcement so you can stay aware of changes that affect rental properties.

Create Leases That Meet Legal Standards

A poorly written agreement can lead to disputes or legal action. Decide in advance whether the property will be rented under a month-to-month agreement or a fixed-term lease. Include all required disclosures, such as flood risk notices when applicable.

Rent amounts, deposit terms, subletting policies, and maintenance responsibilities should be clear.

Having an attorney review lease templates each year helps keep them aligned with current laws. A property management system that offers legal help can also make it easier to keep up and update these lease agreements when rules change.

Screen Tenants Without Breaking Fair Housing Laws

Tenant screening helps protect your property and income, but it must be done legally. The Fair Housing Act prohibits discrimination against applicants based on race, color, national origin, religion, sex, disability, or familial status.

State and local laws may add other protected classes, such as sexual orientation or source of income.

Here are some steps you can follow:

• Use the same process for all applicants – Apply the same screening steps, questions, and criteria to everyone to avoid claims of bias.

• Review allowed criteria only – Check identity, income, credit history, rental background, and legally permitted criminal records. Avoid personal questions about protected classes.

• Keep records of decisions – Save applications, reports, and notes to show your decisions were based on legal, consistent standards.

• Know the consequences – Violations can lead to fines from HUD or the Department of Justice, lawsuits, and harm to your reputation.

• Choose compliant screening tools – Use services that follow federal, state, and local laws to reduce legal risk.

Anticipate Property Tax Increases

For property managers, rising property taxes can take a big bite out of profits, sometimes as much as 35% of operating costs for rental properties. Using the tools and planning ahead can help you avoid surprises and keep cash flow steady.

• Learn how assessments are calculated – Know the method your local authority uses and when reassessments are scheduled for your rental properties.

• Review historical tax data – Use digital tools like CoStar to see past trends for similar properties in your market.

• Ask brokers for insight – Experienced brokers can share what to expect with property tax changes after a purchase.

• Check local millage rates and schedules – Contact your property assessment office for current rates and upcoming changes.

• Use conservative projections – Factor higher property tax estimates into your underwriting to protect your rental property income.

2. Maintenance Issues Leading to Property Damage

Keeping rental properties well-maintained is one of the most common challenges for landlords. You are legally responsible for providing safe, habitable housing, which means more than just fixing things when they break.

Heating, plumbing, and electrical systems must work properly, repairs need to be made promptly, and hazards should be addressed before they threaten tenant safety or property value.

Tenants also play a role in this process. They are expected to keep their units clean, report problems quickly, and avoid causing damage.

If landlords fail to meet habitability standards, tenants in many states can withhold rent, request repairs through local housing authorities, or even terminate the lease.

One property management company in California even got sued by the Attorney General for keeping thousands of its units in slum-like conditions. Their property had leaking roofs, broken plumbing, and rodent infestations that made the property uninhabitable.

Maintaining a property goes beyond emergency fixes. Preventative maintenance, such as regular inspections for water leaks, testing carbon monoxide detectors, and servicing HVAC systems, helps protect both the building and the residents’ well-being.

How To Avoid These Problems

Conduct regular property inspections throughout the year. Check roofs, plumbing, heating, and electrical systems. Look for early signs of water leaks, structural wear, or pest activity. Inspections should also cover safety equipment like smoke and carbon monoxide detectors.

Use a property maintenance checklist to make sure no important maintenance tasks are overlooked. Your checklist can include seasonal tasks, appliance servicing, and preventive repairs that help extend the life of building systems.

Respond quickly to tenant repair requests. Even if a complete repair will take time, update tenants on the next steps and provide temporary fixes when possible.

Fast responses improve tenant satisfaction, increase operational efficiency, and reduce the chance of small problems turning into major damage.

Invest in property maintenance software as part of your management process. A good system can track work orders, schedule recurring tasks, send reminders for inspections, and keep a history of past repairs.

Plan ahead for emergencies, including natural disasters like floods, storms, or earthquakes. Have a list of local contractors and service providers you can call on short notice. Keep essential supplies, such as sandbags or backup generators, ready in case of severe weather.

3. Adopting and Using Technology

Many property owners and managers hesitate to adopt new tools because they feel the learning curve will take too much time or disrupt current processes.

According to a February 2025 report from Carrington West, AI and property technology (PropTech) have the potential to reshape property management, but many also report roadblocks such as skill shortages, lack of proper training, and resistance to learn new systems.

Others may invest in IoT technology for real estate but do not use it to its full potential, missing out on features that could save time and improve operations.

This is a problem because managing properties without the right tools can slow down daily operations and make it harder to compete.

Tenants also expect quick responses and online access to services. Without updated technology, meeting these expectations becomes difficult.

How to Choose and Use the Right Tools

Start by pinpointing the areas where technology can make the biggest difference in your daily operations.

For many landlords, asset managers, and property management company teams, AI-powered property management software can automate repetitive tasks, analyze data to predict maintenance needs, and help you respond faster when dealing with tenant inquiries.

Owners with larger portfolios, especially those managing multifamily buildings, can benefit from software that centralizes leasing, maintenance requests, rent collection, and reporting for all properties in one place.

Once you’ve chosen the right system, invest time in training yourself and your staff. Many providers offer tutorials, webinars, and customer support to make onboarding easier.

The goal is to make sure everyone understands how to use essential features such as tenant communication tools, maintenance tracking, and financial reporting.

One good technology to add is DrizzleX's IoT micrometers. These devices help you track water use at the fixture level, helping you detect water leaks and spot patterns that lead to waste, such as long showers, running toilets, or constant faucet drips.

Tracking water use across your property doesn’t have to be complicated. Book a consultation with us today and see how DrizzleX can give you instant visibility without major plumbing changes.

4. Staying on Top of the Competitive Market

The rental market moves fast, and property owners often face real challenges in keeping pace.

In fact, the global property management industry grew by 3.05% last year and is projected to reach USD 42.78 billion by 2030, with a compound annual growth rate (CAGR) of 8.3% from 2024 to 2030.

This includes more than 21,000 companies and over 2,000 startups pushing innovation with AI-driven tenant screening, automated leasing systems, and blockchain applications.

These numbers show how crowded the market is. Your tenants’ expectations change, new regulations roll out, and economic shifts affect demand. These factors will directly influence your property’s vacancy rates, profit margins, and the overall resident experience.

If other landlords or property managers are offering better amenities, flexible lease terms, or adopting the latest property management trends, they are more likely to attract tenants.

The same applies in commercial real estate, where outdated marketing or slow adoption of new technology can cause you to lose deals to more proactive competitors.

How to Stay Competitive and Attract Tenants

Research property management trends so you can anticipate changes instead of reacting to them.

Use social media to know what renters are talking about, which amenities they value most, and how competing properties are marketing themselves. Platforms like Instagram and Facebook can give you insight into local market trends and help you identify tenant preferences.

You can also use multifamily property management software to improve the way you handle leasing, rent collection, maintenance requests, and communication.

Many platforms also offer analytics that can help you track occupancy patterns, forecast vacancy rates, and identify opportunities to adjust pricing or promotions.

Consider adding amenities like secure package lockers, faster internet, or shared workspaces to make your property more appealing without a major overhaul.

Update your online listings frequently and use professional photos or virtual tours. Make sure you respond to inquiries quickly to show potential tenants that your property management company is organized and attentive.

Finally, track your competitors. If other landlords in your area are offering certain perks or incentives, see if you can offer similar options that would work for your properties. Your goal is to offer something that makes your rental the better choice.

5. Financial Management and Budgeting

Accounting mistakes can sneak in more easily than you think. Sometimes major upgrades get marked as simple repairs, or expenses end up in the wrong category, which can throw off reports and cause tax headaches.

Payments from tenants can get missed, accounts might not be reconciled often enough, or personal and business expenses get mixed together.

Using different ways to track income, cost of day-to-day operations, and expenses for each property makes it tricky to compare results, while recording costs too early or too late can mess with cash flow.

Skipping audits, making payroll errors, or miscalculating depreciation, amortization, or inventory values can lead to bigger issues like inaccurate financials, compliance problems, and poor decision-making.

Ways to Manage Your Finances Properly

Here are some strategies you can try to keep your property management finances in order, support resident satisfaction, and improve your NOI.

• Granular tracking – Review the financial performance of each property separately to spot strong performers, address underperforming rentals, and direct investments for long-term success.

• Revenue recognition – Record all income, including rent, late fees, utilities, and CAM charges, in the correct period to maintain accurate cash flow and avoid disputes.

• CAM and trust accounting – Match CAM charges to lease terms and actual expenses. Keep trust funds, such as security deposits, in separate accounts with clear records to stay compliant.

• Advanced reporting – Use property-level budget comparisons, cash flow projections, and market trend analysis to adapt to rising costs, support resident retention, and find opportunities to save money.

6. Sustainability and Environmental Concerns

Sustainability is becoming a priority among tenants in the private rented sector, especially with rising energy bills. A recent survey shows that 92% of investors find that tenants are willing to pay more for greener homes.

Failing to address these priorities can make your property less appealing to tenants. They can affect your reputation as a landlord. You could also miss out on opportunities for government incentives or tax rebates.

Inefficient systems can also lead to higher utility costs for your property. Outdated lighting, poor HVAC systems, and mismanaged resources can waste energy and water, driving up expenses and putting extra strain on your building’s budget.

How to Integrate Sustainability Into Property Management

Start by assessing your building’s current performance. Find areas where you can reduce energy and water use, such as upgrading to LED lighting, installing low-flow fixtures and submetering systems, or improving insulation.

Sustainable property management can also involve adding recycling programs, using eco-friendly cleaning products, and choosing vendors with strong environmental practices.

Track your ESG efforts and share results with tenants and investors. This could include reporting on reduced energy usage, improved waste diversion, or certifications like ENERGY STAR.

Involving tenants in these efforts, such as encouraging participation in recycling or energy-saving programs, can strengthen their connection to the property.

Look into renewable energy options where possible, such as solar panels or green power purchasing programs. Even small changes, like adding bike racks or planting drought-resistant landscaping, can contribute to your sustainability goals.

Take Control of Water Use with DrizzleX

DrizzleX is a smart water management system designed for multi-family buildings that cannot be traditionally submetered. With their submetering solution, you can track water usage at the unit level, identify leaks early, and spot waste that drives up costs. 

With this insight, you can set maintenance priorities, address issues faster, and avoid unnecessary water loss.

DrizzleX also supports sustainability goals by encouraging responsible water use. The system’s detailed reports make it easier to educate tenants about their usage and show them how small changes can save water. 

AI-powered predictions help you plan water-saving measures before problems grow, reducing both water consumption and costs.

Easy to install without a plumber, it is built to fit each property’s unique needs through custom pricing, making it a practical solution for saving money and improving property management.

If you are looking for a good property management tip for saving money and improving operations, it is this: use technology like DrizzleX to gain clear control over one of your biggest utility costs.

See how real-time water tracking works for properties like yours. Book a consultation now.

Real Savings Example: Washington, DC Property

A 281-unit multifamily property in Washington, DC, installed DrizzleX on toilets and showers across the building. 

Over a nine-month period, average daily water use dropped from 35,491 gallons to 18,070 gallons. This meant each tenant went from using 42 gallons a day to just 21.

The savings quickly added up. At the local water rate of $18.69 per hundred cubic feet, the average monthly bill per unit fell from $94.68 to $48.25. Overall, the property cut water costs by 49 percent, saving $158,727 in less than a year.

This case shows how fixture-level tracking can reveal and stop waste in high-usage areas like bathrooms. 

For property managers, it is proof that targeted water management can significantly reduce costs while making tenant billing fair and accurate.

Leaks and overuse can cost thousands every year. DrizzleX helps you spot the problem fast and bill tenants fairly. Get a quote now and see how much you could save.

FAQs About Property Management Challenges

What is the biggest challenge for a property manager?

One of the biggest challenges for a property manager is handling late rent payments without damaging tenant relationships. It takes patience and strong communication skills to address payment issues while still keeping operations running smoothly.

What are the 5 P's of property management?

The 5 P’s of property management are people, property, processes, paperwork, and profit. Managing these areas well helps maintain job satisfaction for staff and provides a better experience for tenants.

What is the hardest part of property management?

The hardest part of property management is balancing daily tasks with unexpected problems like maintenance emergencies or disputes. This workload can quickly lead to employee burnout if support systems aren’t in place.

What are the weaknesses in property management?

Weaknesses in property management often include poor communication, a lack of proper records, and limited safety measures. Not using tools like surveillance cameras can make it harder to protect properties and resolve disputes.