Property expenses aren’t coming down in 2026. Now what?

If your budget feels stretched, you’re not alone. In fact, insurance, payroll and maintenance expenses are up nationwide. Property expenses for rental properties hit $8,657 per unit in 2024, and the costs just keep climbing. Let’s break things down further to see what’s happening under the hood. According to NAA research, 89 cents of every rent dollar already goes to operating costs. As expenses rise and income stays flat, that seven-cent gap, covering profit, wages and possibly additional reserve funding, gets smaller.

Here’s what we know: costs aren’t coming down anytime soon, and some probably never will. (Think wages.) To help you make sense of the world we’re in, here’s a breakdown of where costs are going up, why it’s happening and what you can do about it.

Insurance premiums keep climbing

In the 2020s, landlord insurance premiums have increased steadily, costing about 15-20% more than homeowner insurance for the same property. A number of factors continue to drive these increases, including inflation, rising construction costs and higher rates of claimed losses due to more frequent weather disasters. Insurers are adjusting rates to cover their own losses.

What you can do

Review your coverage every year, not just when it’s time to renew. If your cash reserves can handle it, raising your deductible can lower your premium. Some insurance companies give better rates for properties that reduce risk. So, install and document security measures like cameras, water leak sensors and fire suppression systems.

Yardi Energy is a full-service utility management solution available to Yardi Breeze Premier clients. It offers simple utility cost recovery, real-time access to utility data and 24/7 live customer service you can use to resolve issues before they drain your accounts.

There’s something else you can do: always make sure your vendors carry current insurance. Raven Cerny, director at Petra Management Group, uses automated alerts in Yardi Breeze Premier to flag expired vendor coverage before a payment goes through.

She said, “When I put a bill in Breeze, it will notify me that the insurance has expired.”

Payroll is higher & it’s staying there

Wages for onsite staff rose sharply during and after the pandemic. They haven’t come back down, and they’re probably not going to. Admin and payroll costs per unit are now about 20% above 2021 levels according to NAA. The pace of increases has slowed, but the base will probably always remain higher.

This isn’t just a property management trend. Economists have a fancy name for it (“downward nominal wage rigidity”), but in plain terms, it means employers almost never cut pay, even during downturns. The reason is sound: pay cuts damage morale and drive employee turnover in ways that are often more expensive than the savings. Skill gap training and replacement hiring are time-consuming and financially draining — not to mention the cost of training new staff.

As a result, property management companies are posting fewer jobs, with listings down nearly 14% year over year. At the same time, they’re paying more for the people they hire, especially maintenance techs and leasing staff. In some ways, it’s a tradeoff for new hires: jobs might pay more, but there are fewer of them available.

What you can do

Look at where your team’s time actually goes. For example, is your staff still manually collecting rent and making multiple trips to the bank, or manually processing invoices and cutting checks to vendors and owners? Automation and AI built into property management software like Yardi Breeze can free your staff for higher value activities and keep you from having to add staff in the first place.

How Breeze clients are saving now

Jason Korb, principal at Capstone Communities, estimates his team saves 15 to 20 hours a week with Yardi Breeze Premier. He also cut $250 to $500 per month in wire transfer fees and avoided hiring an additional employee.

Rob Chiang, CEO of RC Real Estate Services, cut 24 hours per month from rent collection and reduced monthly report time from 16 hours to just 45 seconds.

The savings Jason and Rob experienced are real and easily attainable. The benefits go straight back into the business.

Maintenance costs are growing faster than income

Since 2021, maintenance costs have risen nearly 28%. Over the same period, property profits grew only 10%. More of your revenue is going toward keeping units livable and less is making it to the bottom line.

Don’t be surprised if maintenance expenses feel especially painful. This is due to the combined effect of payroll increases and general inflation. Essentially, wage increases affecting leasing and admin also affect maintenance. If you can’t afford to fill maintenance roles, you outsource, which usually costs more per hour. On the materials side, the cost of parts, appliances and supplies has stayed well above pre-pandemic levels. Your contractors and vendors are dealing with the same cost pressures, and those get passed through in their rates.

Insurance and payroll aren’t just separate line items. They feed directly into what you spend on maintenance.

What you can do

Spend more on prevention and less on emergencies. A $200 seasonal HVAC checkup is a lot cheaper than a $3,000 compressor replacement, and it extends the life of the equipment. Also, track your maintenance costs by unit and category. If one building’s plumbing bills are double the portfolio average, you want to know that before it turns into a major project.

Building repeatable daily and weekly routines helps your maintenance team spend more time on repairs and less time on paperwork. Tracking labor hours on each request also makes it easier to decide when it’s cheaper to outsource a task than handle it in-house.

Energy prices are the wild card

Utility costs actually went down slightly in 2024. That was one of the few good numbers on the expense report. It probably won’t last.

In March 2026, the conflict in the Middle East and the closure of the Strait of Hormuz pushed U.S. gas prices past $4 per gallon for the first time since 2022, an increase of more than a dollar in a single month. Diesel, which affects delivery costs for everything from building materials to contractor services, rose risen even faster. These numbers may shift, but the trend is clear.

Property managers should be watching two things. First, your direct costs. Electricity, heating fuel and the cost of running vacant units are all likely to go up. Second, your residents’ ability to pay. Gas and grocery prices eat into household budgets, and NAA has noted that consumer debt is near record levels. When residents are stretched thin, late payments go up.

What you can do

Run an energy audit on your portfolio and find the units or common areas using the most power. Lock in fixed-rate utility contracts where you can, before seasonal pricing hits. For residents who are feeling the pressure, RentCafe Flexible Rent lets them split payments to match their pay schedule. The best part: you still get paid the full amount on time. This protects your cash flow without adding more collection work to your team’s day.

What do 2026 property expenses add up to?

You can’t control insurance markets or oil prices. What you can control is how efficiently your operation runs, how fast you see problems coming and what the experience looks like for your residents. A few final thoughts.

Resident satisfaction matters even more than you might realize

In the 2024 NMHC/Grace Hill Renter Preferences Survey, 80% of renters said customer service and staff interaction are very important or essential in their future lease decisions. And 69% said they’d consider or specifically seek out a property run by their current management company the next time they move. Take it as a sign that a smoother operation saves money and keeps residents coming back.

All-in-one software is an uncontested game changer

An integrated system is all about getting more from the hours and dollars you already have. When every expense line is going up, this matters more than ever.

When your marketing, leasing, accounting, operations and resident communications all live in one system, your team spends less time switching between tools and more time doing the work that residents actually notice and positively affects the bottom line.

Kristina Sekulic, founder and CEO of Building Broad, cut annual costs by 35% after bringing her commercial and HOA portfolio into one system with Breeze Premier.

We offer ways to save you might have missed. For instance, Breeze Premier clients on a 12-month contract can save 50% per unit per month by also licensing our renters insurance and resident screening solutions.

Property management expense trends at a glance

Sources: NAA/IREM/BOMA Income/Expense IQ 2024 same-store data (published Dec. 2025); NAA “Premium Pulse” (March 2026).