Over the last six months, I’ve spoken with dozens of PropTech founders, operators, lenders and investors on what’s happening in the space.

As the rental market continues to evolve, my team at LLR is staying close to industry leaders shaping the future of real estate and PropTech. Over the last six months, I spoke with dozens of PropTech founders, operators, lenders and investors on what’s happening in the space. Below are seven themes that came up regularly during those discussions.

What I’m Hearing in PropTech: Takeaways from H1 2025

 

1. Resident Retention and Renewals are Top of Mind

Owners and property managers are focused on using resident data to predict and improve retention and renewal rates. At recent conferences, even maintenance requests were reframed as an indicator of tenant satisfaction and renewal likelihood. Some themes and questions I heard:

  • “How fast are you responding to maintenance requests?”
  • “Are you anticipating resident needs before they escalate?”
  • “Can you trace renewal outcomes back to screening data to identify ideal tenants?”

Operators and the tech that powers them are shifting from reactive to proactive, leveraging non-discriminatory tenant data and characteristics to strengthen the quality of screening at the outset and create feedback loops between early residency decisions and future renewals.

My Takeaway: We expect to see more predictive tools that drive long-term value for both tenants and landlords. The most successful operators will know what their tenants are thinking before they take action.

2. Softness in Institutional Investment Continues

Institutional investor appetite for single-family rental assets remains muted, with many PropTech business models, especially those built to serve these investors, adapting accordingly by asking themselves: How can we serve the long-tail / mom and pop owners more effectively? Founders are eager for institutional re-engagement, but we aren’t quite there yet.

My Takeaway: Either rates need to decrease, or prices need to compress before institutional investor confidence returns. PropTech companies are re-focusing on serving mom and pop operators with nimbler, tech-forward offerings.

3. Renters are Stuck: Can’t Afford to Buy or Rent

Supply has been a pain point, but affordable supply is the real challenge. Homeownership is out of reach for many, but now even rent is becoming unaffordable. This is creating an opening for innovative solutions (i.e. deposit replacement, rent payment loans, co-living and space reconfiguration, etc.) to gain traction with landlords. Building on this momentum, PropTech companies are working on solutions to help landlords position these offerings to potential tenants.

My Takeaway: Affordability constraints are opening new white space for creative PropTech models that rethink how space and fees are designed, marketed, and monetized, and in return, generating more income for landlords and availability for tenants.

4. Feature Fatigue is Real: Owners & Property Managers Want ROI – Not Bells and Whistles

The market is saturated with platforms offering overlapping features and limited clarity on ROI. Owners and property managers are having trouble deciphering between features that add value versus ones that don’t, or are more “buzzwordy.” They want tools that clearly demonstrate how they contribute to the bottom line, like predicting upcoming maintenance or anticipating renewal likelihood (see above). There is a desire for simpler, outcome-driven solutions vs. “bloated” feature platforms.

My Takeaway: Simplicity and outcome-driven features are gaining traction. The winners in this next phase will make it easier for operators to extract value, not just check feature boxes.

5. Profitability Takes Priority Over Growth

Once an afterthought, profitability is now a core focus for PropTech leaders across the board. In the early-2020s funding environment, many companies leaned hard into growth with substantial capital raises and capital burned. Today, with capital being more constrained, that narrative seems to have shifted. Leaders are prioritizing margin and operational efficiency. Growth is still important, but not at the expense of sustainable economics.

My Takeaway: Founders and executives who understand their path to profitability and build toward it early are best positioned to weather market cycles and build long-term value.

6. Fundraising is Harder: Vision and Trust Matter More

As founders shift toward sustainable growth (see #5), those conversations are extending into how they think about capital partners. While fundraising activity has picked up in 2025, founders and high-quality management teams are more selective with who they choose to partner with.

Many companies are extending runways not purely because of valuation concerns, but because they’re being thoughtful about who they bring to the table. There’s a growing emphasis on alignment, trust, and long-term value creation. Teams that aggressively pursued capital partners in the early-2020s are now taking a more measured approach shaped by lessons learned. Even those who didn’t raise heavily are seeing peers recalibrate after experiencing pressure to scale at unsustainable rates.

My Takeaway: The bar is higher on both sides of the table. Founders are placing a premium on trustworthy investors who share their vision and contribute more than capital, and investors who show up with alignment, experience and trust are earning that right.

7. AI is Reshaping Team Strategies, Even While Tools Mature

AI is impacting how teams think about resourcing and team design. With pressure to improve profitability, teams are asking themselves: How do we do more with who we already have? Manual workflows, like customer support, operations and onboarding, are particularly being targeted for automation.

Developers are being asked to build features with long-term scale in mind. AI is also flipping traditional metrics on their head. Revenue-per-employee, once a post-scale metric, is now being looked at as leading indicator of operational health. In some cases, leaders are resisting the urge to hire and instead tasking teams with exploring where AI can replace labor-intensive processes.

My Takeaway: Even in its early stages, AI is pushing PropTech companies to get leaner and sharper. The forward-thinking teams are embedding AI into how they scale and allocate resources for long-term durability.

What are you seeing in your corner of the industry?

I’d love to hear what resonated with you, and what I might have missed. Email me to continue the conversation.

Learn more about the LLR team, relevant investment experience and our focus on the Property Management sector.