April 2025 Rental Owner Leads down 79%

Hey everybody, this is Peter Lohmann and I am here with Jennifer Merritt, COO of RentScale. Thanks for coming on, Jennifer.

Thanks for having me, Peter.

So Jen, I wanted to get you on the mic here and talk about lead flow for property managers. So over there at RentScale, you guys have been doing an awesome job of tracking a bunch of data about the marketing and sales effectiveness of third-party property management companies. Like mine, like RL Property Management. And you just released your April scorecard, and, and we'll of course, you know, we're going to have all the links. What really caught my eye though is the data around lead flow for property managers. So new owner lead flow, which normally I see that number anywhere from 15 to 30 leads a month, um, that the average property manager receives. But in April of 2025, so last month, It was 7.

7, Peter, 7.

So I'm like, all right, what's going on here? We got to get RentScale on the line and figure out what happened to owner lead flow. So what, what's going on here, man?

Yeah, you know, I can't say I was surprised. I guess we kind of saw this coming just being on the forefront of it, right? But when I actually looked at the numbers, I was just like, wow, I can't believe that it's as bad as it was. So we did see a drop in March, and then we saw another big drop in April. So yes, I normally see somewhere around— I want to say 30 leads is like good. Uh, we say that in order to be a healthy company, you need to have 80 leads coming in a quarter. If you divide that out by the 3, you know, you got the math there. But that's what I want to see to be a healthy company. And when I look at the 7 from April, it is pretty, pretty scary. So what's going on there? Um, we think there's a multitude of different things going on. Uh, it's just uncertainty in the marketplace. A lot of people not necessarily making shifts, trying to figure out where things are going. I'm sure you've seen there's been some softening in real estate, so I think it's just kind of trending over even into property management. People are just not sure what direction they're doing or what direction they're going, and I think that uncertainty is just causing everybody to just hold and pause. So our hope, Peter, is that this is going to rebound in the coming months and we're going to see that then kind of break out and explode coming forward. But yeah, like pent-up demand. Yeah, yeah, yeah. The inflated demand we're thinking is going to happen in like the July-August timeframe, assuming things calm down a little bit and there's more certainty.

Okay. I can tell you just from my perspective, You know, I keep a really close eye on our lead flow. It's picked way up in May, and I don't know if you have like that up-to-the-minute data on your end, but the lead flow was definitely down in April for us. Now, we still did well in April, um, but May is definitely like almost a doubling in the weekly lead flow that we saw on these first 2 weeks of May so far. Um, and I went back because you publish your scorecards going all the way back to when you first started tracking it. I went back and I looked at April of 2024. 33 leads in April of 2024, 7 in '25.

Yeah, April is historically actually a really good month. So we fully expect that, you know, January, February, we're coming out of that slow, like holiday season, whatever, and things are going to be slower. I would expect to see a 7 in those months, Peter. Um, even that's low for those though.

Yeah.

But, you know, March we climb out, April we're even, we climb out even further, and then May it's like we're out and everything's popping like spring, but We did not see that. I have seen that May has picked up from April, but I still don't know that May is to the levels that we would fully expect. So I'm really hoping that we see June and July just kind of burst out, and that's where some of the business ends up actually flowing. Um, I was talking with another colleague about this over lunch last week, um, and his sentiment was the investors are just gone and they're just not coming back for a little bit. Um, and we talked a little bit about the stock market and there was just some back and back and forth debate on the stock market's on sale. Is that where people are going right now? And there's some just discussion a little bit about that and where the investors are at right now.

Yeah. Well, I want to ask you, what are you seeing property management companies that maintained relatively strong lead flow in March and April? What are you seeing that they're doing differently from the companies that were hardest hit on, on the lead flow volume?

Yeah, good question. So the companies that were hardest hit are the ones that typically rely on a lot of inbound leads. And when we say inbound, what I mean is those are marketing generated. Maybe you're talking about SEO, Google PPC, direct mail, you know, social media ads. Maybe you've got YouTube ads running, that type of stuff where you have those inbound leads coming in. Those were the ones that were hardest hit. And I think you saw probably in the Crane community, I had posted something We're looking at some different options to give more of those top of the triangle leads that are like ready to go. The problem is, is that they absolutely crashed in the month of April, and those were the companies that were hardest hit. So the ones that weren't hit as hard do what we call all-bound marketing. And this is like, we talk about New Customer Machine all the time, but in New Customer Machine we focus on inbound, outbound, and next-bound, and that's all-bound. And those companies were not hit by this swing. In fact, those are the ones that are at the top of the leaderboard. We had 5 brand new BDNs up at the top of that leaderboard, and it was all the people that were focused on all-bound. So they've got solid outbound strategies. So many people are saying outbound is— the juice isn't worth the squeeze. That's because they haven't done it for long enough. Honestly, that's— they're not doing it for long enough.

I'm gonna raise my hand there. Guilty because I know we're struggling with it right now. We're trying to figure it out. Yeah.

Yeah. Well, I mean, the hard thing about outbound is you have to be willing to do it without seeing results for a very long time. And when I say very long time, I mean 9 months to a year. And most people cut that off at like even 6 months. They're just like, I'm exhausted because, yeah, it's exhausting, but it's like running a business. Peter, was it easy to get RL up and running? Did it take you 6 months? Probably not. So the outbound is an important piece, and you have to be doing the right outbound activities too. So it's not just about spattering outbound into it and just like spray and pray and we'll see what happens. It's what is your BDM, or whoever's doing the selling? I don't care if it's a PM or you, the owner. What are you really good at? Find that, because some people are awful at outbound calling like for rent by owners. Some people are better at networking on BiggerPockets. Some people are better at hosting events. Some people are better at BNI groups. Those are all outbound. And then the third area that we always say you have to have a hold of is the next bound. So this is your realtor referrals, how you're networking with 1031 exchange agents, mortgage brokers who are focused in secondary, creative financing people, your developers. Man, people are underutilizing that. Your developers are— should be a huge source. You should be networking with them for nextbound. And so it's only when you have all 3 of those in place that you're not relying on one thing to pull from and you don't have that yo-yoing in sales.

Well, great. I love this color and context on what property managers are facing in April and halfway through May now. So thanks again, Jen. This was really helpful.

Yeah. Thanks for having me, Peter.

All right. Bye.