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In residential property management, what is the average churn rate for managers?
Hello! Thanks for your question about how long, on average, a residential property owner stays with the same property manager. I understand you want this by property type and, if available, by geography.
Data from the United States Census Bureau's Property Owners and Managers Survey (POMS) show that more than half of residential properties in the United States, which were managed by either a property manager or a property management company, had, at the time the survey was conducted, property managers whose tenure with them was 5 years or more already.
Below you will find my research methodology and overview.
METHODOLOGY
I and my colleague scoured the Internet for reports, articles, studies, charts/graphs, tables, or infographics that contain any information on the turnover rate of residential property managers. We first searched among recently published pages and files, but seeing very limited information on the subject, we expanded our search to older sources.
Most of the churn rates that we encountered in our search are tenant turnover rates, not property manager churn rates. After a thorough search, I saw only one source that provides insight into how long a residential property owner stays with the same property manager. The reference, the Property Owners and Managers Survey (POMS), is very dated, but it was comissioned by the United States Census Bureau.
POMS was conducted between November 1995 and June 1996 on a nationwide sample of around 16,300 privately owned housing units which were either rented or vacant-for-rent.
According to Page 3 of the Census Bureau's 1998 report on the insights it got from the POMS, among multi-family property owners:
"Most properties, regardless of size, were owned by individual or partnership owners. Individual owners include single persons, husbands and wives, and trustees for estates of deceased persons. Partnerships include limited partnerships and general partnerships."
On the other hand, Table 96 in the PDF file containing the single-unit summary tables shows that, out of 8,773,165 single-family properties in the United States then, 7,347,982 (or almost 84%) were owned by individual investors (husband/wife). The rest were owned by either a trustee for estate, a limited partnership, a general partnership, a joint venture, a real estate investment trust (REIT), a financial institution, a real estate corporation, another corporation, a housing cooperative organization, a non-profit/church-related institution, or a fraternal organization.
Data from POMS show the length of property management by type of residential property. Unfortunately, there is no publicly available information on average length of property management by geography.
SINGLE UNIT RESIDENTIAL PROPERTIES
Table 113 in the PDF file containing single-unit summary tables shows the length of current property management by type of single family property. I copied the values in this table to Table 1 of the Google spreadsheet below so I could perform further calculations.
My calculations show that, across all types of single-family property, majority of property owners had stayed with the same property managers for at least 5 years. Out of 1,934,665 single-family properties managed by either a property manager or a property management company then, 52.25% had property managers whose tenure with their respective managed properties was 5 years or more already.
By type of single-family property, the percentage of property owners who had stayed with their property managers for at least 5 years is as follows:
Single Family Detached - 52.53%
Single Family Attached - 62.28%
Single Unit with Business - 100.00%
Condominium - 41.82%
Cooperative - 57.22%
Mobile Home - 43.39%
MULTI-UNIT RESIDENTIAL PROPERTIES
Table 113 in the PDF file containing multi-unit summary tables shows the length of current property management by type of multi-family property. I copied the values in this table to Table 2 of the Google spreadsheet below so I could perform further calculations.
My calculations show that, across all types of multi-family property, majority of property owners had stayed with the same property managers for at least 5 years. Out of 13,727,031 multi-family properties managed by either a property manager or a property management company then, 54.91% had property managers whose tenure with their respective managed properties was 5 years or more already.
By type of multi-family property, the percentage of property owners who had stayed with their property managers for at least 5 years is as follows:
2 units - 49.01%
3 to 4 units - 45.78%
5 to 9 units - 42.65%
10 to 19 units - 48.26%
20 to 49 units - 53.54%
50 or more units - 57.91%
CONCLUSION
In summary, it appears that, based on data from the United States Census Bureau's Property Owners and Managers Survey (POMS), over half of residential property owners who let their properties be managed by a property manager stay with their respective property managers for at least 5 years.
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