A look at the operational shifts multifamily leaders can’t afford to ignore

Last year’s budget assumptions are already outdated. Margins are tight, costs are up, and the pressure is on.

Operators are entering this budget season facing mounting instability. Shifting messages around tariffs are creating uncertainty, interest rates are holding stead, rent growth slowed, and more renters are staying put. With thinner margins and elevated expectations, operators are being squeezed from all sides. Budgets built on legacy assumptions won’t cut it—this year demands a strategic reset that reflects the new operational reality.

In a matter of months, multifamily operations are shifting rapidly—most notably, the adoption of AI-powered workflows, the broader adoption of centralization and increasing acceleration of centralized operating models for third-party managers, and the rising cost of doing nothing in the face of rising fraud. 

If you’re building a 2026 budget based on a 2025 playbook, you’ll miss what’s actually driving performance (and where the cost sinks are hiding).

This budget cycle demands a fresh lens. Not just because of what’s new, but because of what’s no longer optional. In this article we’ll dive into what’s changed, and what forward-thinking operators are prioritizing in response.

We’re past the AI hype—now it’s about integration

The AI narrative changed fast—and it changed everything.

In late 2022, the launch of ChatGPT brought large language models (LLMs) into the mainstream. By early 2023, AI had gone from a back-office experiment to the center of every strategy session. Proptech vendors scrambled to add AI features. Operators piloted chatbots, tested automation, and explored whether these tools could scale.

But much of that early excitement lived in the hype cycle—big promises, shallow integrations, and a flurry of one-off tools. 

Fast-forward to 2025, and the dust is settling. The value of AI isn’t in standalone solutions. It’s in deeply embedded infrastructure.

The most forward-thinking operators aren’t just “using AI.” They’re rebuilding operations around AI working hand in hand with their teams.  

Tacking AI onto broken workflows doesn’t fix the problem—it just automates the chaos. For AI to actually drive performance, it has to live within the core systems that orchestrate your renter journey: your CRM, your communications stack, your leasing and resident workflows. 

When AI is embedded across the renter and resident lifecycles—answering phones, qualifying leads, sending follow-ups, booking tours, managing renewals, and even triaging resident support. It delivers the kind of speed, consistency, and scale that manual teams simply can’t match.

The early adopters are seeing compounding returns: stronger conversion, faster leasing velocity, and less burnout. AI isn’t a tech experiment anymore—it’s operational scaffolding.

Make room in your budget for:

Centralization is the standard operating model — and the race is on for third-party managers

The early conversation around centralization was largely driven by vertically integrated REITs—companies that had the luxury of portfolio control and scale. But that’s not the reality for most of the multifamily industry. The majority of today’s properties are third-party managed, which means centralization looks different—and comes with different complexity. In an industry where property owners increasingly scrutinize every dollar spent by managers, centralization is the new default operating model. Managers clinging to the status quo risk losing relevance as their peers deliver better results with fewer resources. 

Recent research reveals that more than half of the top third-party managers have already launched centralized services—and many have also changed their agreements with owner groups to accommodate them. While leasing and maintenance still lag, administrative centralization is well underway, with operators deploying shared services for accounting, collections, renewals, and more.

For third-party managers, success requires first-principles thinking: reimagining staffing, shifting from chargeback to per-unit-pricing model, coordinating across stakeholders, and building flexible models that can scale selectively across properties and portfolios. Managers who cling to how it’s always been done risk obsolescence. 

What to budget for this year:

Fraud is rising—and it’s expensive

Fraud used to be a one-off issue. Now, it’s a line item—whether or not you’re tracking it.

According to Multifamily Dive more than 70% of operators say fraud has increased, and the majority only detect it after move-in—when it’s already too late to prevent losses or avoid operational fallout. As noted in this Forbes article by Tyler Cristiansen Funnel CEO, fraud hurts everyone, and the risk is very real. One in five, or roughly 20% of documents that have been screened by Funnel are tagged with medium to high risk of fraud.

And the threat landscape is evolving. Today’s fraud isn’t just the occasional fake pay stub—it’s synthetic identities, mass-produced falsified documents, and AI-assisted application scams. This raises the stakes for property managers and owners everywhere. 

The financial cost is only part of the problem. Fraud clogs your CRM with bad data, wastes onsite team hours chasing unqualified leads, contributes to delinquency and resident churn, and inflates turn costs. 

And yet? According to Multifamily Dive in early 2024, fewer than 25% of property managers have implemented portfolio-wide fraud prevention programs.

Operators can’t afford to treat fraud as an afterthought. It’s time to embed real-time fraud prevention directly into your leasing workflows. The good news is automating your screening and fraud prevention workflows works. One of our partners, Essex Property Trust, had 91% auto-verify identity without human involvement saving teams time and speeding up the application process while also decreasing risk. Win, win. 

What to budget for this year:

The new mandate: do more with less burnout

In a margin-tight environment, the pressure is high to protect profitability without burning out frontline teams. The solution isn’t more hustle—it’s smarter infrastructure.

That’s what AI, centralization, and fraud prevention all have in common: they let you scale smarter operations. But only if you budget for them accordingly. This year’s most successful budgets aren’t just cutting costs—they’re reallocating strategically. 

The multifamily leaders who recognize that—and budget accordingly—won’t just be better prepared for 2026. They’ll be defining the new standard.