If you know anything about cybersecurity, you’ve likely heard horror stories about companies experiencing cybersecurity attacks. Every year, countless businesses fall victim to ransomware and data breaches, losing giant sums of money and losing trust with clients. Unfortunately, property management companies are at an increased risk for data breaches because of the nature of the information they hold.
Property managers have to collect all sorts of personal information, including resident names, birthdays, SSNs, and driver’s license numbers. This isn’t even considering financial data like income and ACH payment data. The reality is that criminals can leverage this information with pretty unsophisticated means, either directly from your site or from vendors. That’s why we asked experts from Utopia Management, one of the leading west coast property management companies, to break down the specifics of property management cybersecurity to help protect you and your tenants’ data from becoming prey for online criminals.
Understanding Security Threats
In 2025, the average cost of a cyberattack on large US and European companies was reportedly over $53,000, according to SentinelOne. These events seriously impact your finances and your tenants’ safety, and your property management business is likely at risk of falling victim to attackers if not properly shielded.
Many industries, like healthcare, have regulatory systems like HIPAA to ensure proper data collection and storage. The truth is that property management companies don’t have the same framework for protecting data. This draws more interest from criminals who see a quick and easy path to extort low-security companies.
Regarding the actual security issues, Utopia says that email phishing is the most common form of data vulnerability found in the property management industry. Bad actors often pretend to be people in the organization, requesting employees or tenants to click on seedy links that prompt login credentials.
Once data is collected by scammers, they can engage in various crimes depending on the type of data they have, including ACH fraud and wire fraud. In the worst-case scenarios, ransomware is used to infect company networks, locking employees out of the system until a ransom is paid. Property management companies have to take cybersecurity seriously, as they risk significant public backlash and financial strains in worst-case scenarios.
Compliance
Data breaches are unfortunately common, and they’re often considered a cost of doing business for some industries. Remember, however, that there are regulatory requirements that businesses have to follow depending on their location.
Businesses in each U.S. state have to disclose data breaches when they happen, particularly when information like SSNs and driver’s licenses is involved. There can be serious penalties if a business does not notify authorities of data leaks. Peabody Properties, a Massachusetts-based property management company, has recently been hit with a massive lawsuit from the state government for its failure to disclose data breaches between 2019 and 2021. This type of scandal can deeply impact a property management company’s reputation and financial stability.
Some states dictate what information can be collected, with specific rules on how to store personal information. If you’re unsure about your legal obligations, it’s worth looking into local and state policies regarding cybersecurity.
Meeting certain compliance standards can be relevant for certain property management operations, such as large companies managing multifamily homes or private equity funds. Compliance with these protocols can show residents and vendors that your company has taken active measures to protect their personal information, building trust and legitimacy.
SOC 2, one such standard, is a cybersecurity compliance framework that ensures 3rd-party service providers store and process client data securely. SOC 2 is not a law, but many vendors require compliance with it before agreeing to partner with a property management company.
Another thing to consider is that insurance carriers often require cybersecurity measures to fully insure your business. Cyber insurance can mitigate the costs of what you have to pay to residents in a data breach, as well as the costs you would incur. Cyber insurance policies are purchased the same way you’d purchase a general liability policy.
How to Improve Security
Criminals are always looking for a way to gain access to sensitive information, but your property management company can take immediate steps to strengthen your digital defence.
Passwords:
One of the most important and practical steps when considering cybersecurity is the use of strong passwords. Remember that email addresses and passwords are available all over the dark web, and criminals can gain access to your accounts by simply trying exposed email/password combos. Encourage your employees to use complex passwords and implement password changes on a regular basis. Never allow employees to use personal emails for your business. Shared email inboxes are especially vulnerable, so avoid the use of them entirely.
Secure Tenant Portals:
Tenant portals have to be easy and convenient for your tenants to use, but they also need to be air-tight when it comes to security. If possible, set up tiered access and permissions within your organization to limit who can access personal information. Decreasing the number of personnel who can see tenant details will go a long way to prevent leaks. Utopia also highly recommends that property companies enable multi-factor authentication for their tenant portals and employee email servers.
Multi-Factor Authentication, or MFA, is an extremely effective method of improving security. This process involves the use of multiple identifying factors or devices when attempting to log into a system. This can look like a 6-digit code being sent to a phone, or a security question after a password is entered. Most major companies that offer enterprise-level data protection have the ability for your business to set up MFA, including Microsoft and Google.
Accountability and Planning:
A great way to be proactive with your cybersecurity is to implement a strong cybersecurity accountability plan. If your company has over 20 employees, it’s wise to designate cybersecurity policy to a specific person. The role of this person is to regularly check cybersecurity software and come up with a plan in the event of a breach, including how to notify tenants and partners of data leaks. When cyber attacks or data breaches happen, this will allow your staff to easily report to someone.
Software:
Many cybersecurity softwares exist to thwart cyber attacks and make it more difficult for criminals to access client information. Consider investing in an enterprise-level license for each of the devices in your business. Search for software that aligns with your property management company’s organizational size, budget, and any specific security goals. Additionally, devices in your organization should be regularly updated to take advantage of security updates.
