Labor, insurance premiums, utilities, technology, and maintenance expenses driven by tariffs are just a few of the biggest cost pressures weighing on multifamily owners and operators in 2026.
“Labor costs, technology investments, and utilities will remain the most significant pressures in 2026,” says Juan Bueno, president of operations at Cortland. “Wage inflation and competitive labor markets will continue to challenge payroll budgets, while modernization initiatives—such as property management and financial systems upgrades—require upfront capital. Utilities and waste costs are also volatile, driven by sustainability mandates.”
However, industry leaders say many of these cost pressures can be mitigated by adopting smarter operations.
“In 2026, our focus will be on being preventive, proactive, and retention-focused,” says Joe Lubeck, CEO of American Landmark Apartments. “A preventive mindset emphasizes addressing issues before they become expensive problems, particularly in maintenance and utilities. A proactive approach means using data and technology to anticipate operational challenges rather than reacting to them after the fact.”
Leading industry operators and owners share some of their best practices to incorporate into playbooks for 2026.
Quality Control
Utility monitoring and preventive maintenance are two foundational quality-control measures, says Lubeck.
Continuous monitoring of utilities enables the owner-operator to quickly identify leaks or system inefficiencies before they escalate into more costly issues. He adds this also supports sustainability goals and improves resident satisfaction.
Lubeck notes preventive maintenance is equally important to utility monitoring.
“Rather than reacting to failures, properties that follow disciplined maintenance schedules can extend the life of major systems, reduce emergency repair costs, and minimize service disruptions for residents,” he adds. “It’s an area we invest in to create operational consistency across our portfolio.”
Scott Ferguson, executive vice president of operations at Waterton, agrees every property operations playbook should include several key quality-control measures.
“These include maintaining routine preventive maintenance schedules that are tracked digitally, ensuring strong vendor management and purchase order compliance, and conducting regular compliance checks for safety, fair housing, and brand standards,” he shares. “These practices can help maintain operational consistency and uphold a property’s reputation.”
Maintenance Moves
Elie Rieder, founder and CEO of Castle Lanterra, agrees a best practice for 2026 should include moving from reactive to predictive maintenance to better anticipate and plan for failures of HVAC systems, roofs, and plumbing.
“We will also focus on training and investing in current maintenance employees to bring as much work in house as possible,” he notes. “Adopting and supporting a preventive engineering culture of ‘doing things right the first time’ increases the uptime and reliability of all building systems and reduces the frequency and increased monetary and reputational costs of unplanned service interruptions.”
Other strategies for Castle Lanterra to contain expense growth around maintenance is the regionalization of staff when and where multiple geographically proximate assets allow as well as the expanded use of artificial intelligence (AI) assistants for routine requests and inquiries.
Purchasing Power
Adopting centralized procurement processes for bulk purchasing and leveraging vendor partnerships to achieve economies of scale can be effective ways to reduce costs and improve efficiency, says Ferguson.
“We are expanding our procurement program by leveraging national purchasing for common supplies and services to capture volume discounts while consolidating larger contracts—such as landscaping, janitorial, and waste management—to one or two vetted local vendors per market,” he says. “We believe this approach will potentially reduce administrative overhead, improve pricing consistency, and strengthen vendor accountability across our portfolio.”
Bueno says Cortland is investing in its integrated facilities management, consolidating vendor relationships and leveraging group purchasing power to reduce costs. On the vendor side, it also is insourcing services, such as pest control and valet trash, to maintain quality while driving cost out of the system.
In addition, Rieder agrees that operators should consolidate vendors where possible as well as implement vendor performance scorecards with key indicators.
Behind-the-Scenes Improvements
Centralization, automation, and AI are many of the behind-the-scenes tools that can help reduce costs and maintain or improve service.
“Labor costs can be managed more effectively by centralized services, shifting administrative tasks to a centralized team and reducing the on-site labor force,” notes Ferguson.
In addition, he adds that AI can help improve workflows and enhance front-facing customer interactions, ensuring that needs are met promptly and consistently.
According to Lubeck, the most effective silent efficiencies are often invisible to residents but felt through faster response times, fewer disruptions, and more consistent service delivery.
“From an ownership perspective, they quietly lower operating costs while maintaining or increasing resident satisfaction,” he says. “The biggest opportunities for silent efficiencies lie in AI-driven implementations that operate behind the scenes. These can include automated work-order prioritization or smart-energy management systems. When deployed correctly, these tools enable staff to focus on
higher-value, resident-facing activities.”
Bueno notes that automation in financial workflows is helping eliminate redundancies as well as deliver savings annually; in addition, AI-driven screening and renewals are helping to reduce fraud and accelerate approvals, ultimately driving occupancy.
“The continued use of new technology, such as automated rent reminders and collections, work order routing, renewal notices with follow-ups,
and leasing with more use of virtual tours are also vital to lowering costs and improving services,” adds Rieder.
Ferguson shares that adopting smart building technologies like advanced HVAC systems and LED lighting upgrades can also boost operational effectiveness and savings.
Employee and Renter Retention
Lubeck notes having a retention-focused mindset is another important strategy not to be overlooked.
“Retaining both residents and employees is one of the most effective cost control strategies available,” says Lubeck. “High retention reduces turnover expenses, stabilizes cash flow, and preserves institutional knowledge at the property level, all to the benefit of residents.”
According to Rieder, with pressures on new lease rates, residents are being encouraged to move and the primary focus then turns to attracting new renters along with managing turnover expenses.
“Measures such as doing light touch-ups versus a full repainting are examples of ways to save money when it comes to turnover,” he adds.