Here's what we'll cover:
What Is Property Management Software?
Benefits of Property Management Software
Competitive Advantages of Using Property Management Software
Tips & Tools
What Is Property Management Software?
Property management software helps landlords and real estate professionals track leases, residents and maintenance tasks, as well as collect rent and manage finances to reduce costs and streamline operations.
Benefits of Property Management Software
Property management software applications can lead to several key benefits, including:
- Tenant and lease tracking. Helps managers perform two important functions: keep track of tenant details, such as rent payments or contact information, and lease dates. Lease tracking can also automate the leasing process from prospect to move-out.
- Maintenance management. It's critical that property managers keep buildings and utilities in operating condition so tenants find value and comfort in their homes. With this application, residents can submit work orders and managers can assign work and track schedules so that important maintenance tasks are completed in a timely fashion.
- Accounting. Assists with tracking rent payments, includes a general ledger and can generate reports to visualize the financial health of your properties.
- Tenant portal. An online portal allows your tenants to pay rent, make maintenance requests and communicate with landlords at any time. This portal can also send alerts and notifications about upcoming rent dates or important messages from managers to residents.
Competitive Advantages of Using Property Management Software
Whether you manage a single apartment complex or dozens of commercial facilities, property management software can provide the functionality needed to handle daily tasks, letting you focus on your business in other ways:
- Grow your business. Automation gained from software allows property managers to spend more time marketing their properties and managing applicants to find the best residents or renters. Marketing tools give you the ability to quickly post vacancies to various sites, like Craigslist or Apartments.com, with just a few clicks.
- Offer increased convenience. With an online tenant portal, residents can pay rent any time of day, which adds convenience for them and makes collecting rent easier for you. In addition, a portal opens a line of communication among tenants and office and maintenance staff, so everyone can be quickly notified about important announcements.
- Gain financial oversight. Reporting and analytics tools help you gather your financial, tenant or marketing data to identify trends that could be harming your business or opportunities to make improvements.
Business Sizes Using Property Management Software
Property managers have different requirements based on their portfolio size and type. Modern software offers functionality to help any type:
- Single and multi-family buyers. Perhaps the most common type of property management, these buyers enjoy a wide selection of systems that help manage apartments, condos or houses, including core functionality of accounting and tenant tracking along with portals and vacancy marketing.
- Niche-segment buyers. While most property management systems feature the same core functions, many focus on certain property segments:
- HOA management software offers additional features to track meeting minutes, bylaws and elections necessary to operate an association.
- Affordable housing software includes functionality to manage funding programs, track compliance and generate audit reports.
- Vacation rental property software focuses on online booking management and marketing features to give owners a wider reach for potential renters.
- Enterprise level buyers. Those who manage several properties across a commercial enterprise can opt for a system that shows an overview of their entire portfolio.
Additional Software Property Managers May Need
Modern property management software helps handle virtually any day-to-day task, but depending on your specific needs, you may want to integrate with other systems:
- Marketing automation: Some property managers with large portfolios may need some extra help advertising their rentals. Marketing software can help you manage email, social media or text campaigns to reach a wide swath of potential tenants.
- Maintenance management software: Residents deserve functional, clean properties, and managers may need more robust work order systems to tackle the volume of daily maintenance requests.
- Property management accounting software: Helps landlords track rent payments, maintenance and inventory costs and create forecasts and budgets to gain an overview of financial health and maximize profits.
- Rental property management software: Helps owners automate recurring tasks, such as collecting rent and generating financial reports, and handle maintenance requests remotely to manage a portfolio of properties.
- Apartment management software: Includes core accounting and tenant and lease tracking functionality with additional online listing management tools, and a tenant portal to streamline rent collection.
A List of Common Property Management Features
When comparing property management software, it's important to understand the functionality included in each. The most common functions of these systems are listed in the table below:
||Manage the general ledger, accounts payable and rent payments. Most systems assist with bank reconciliation and generating financial reports.
|Tenant & lease tracking
||Assists with the entire leasing process, including tenant screening, move-in and move-out management and rent and utility payment collections.
|Budgeting & forecasting
||Develop accurate operating budgets and reports and forecast future costs and values, as well as account for consumer price index (CPI) changes, inflation and market rates.
||Submit and track work orders, either from employees or renters, and assign tasks to maintenance workers.
||Allows tenants to pay rent and fees, submit maintenance requests and opens a communication channel between residents and staff.
Feature Details and Examples
Accounting: Accounting features in property management systems work much like financial accounting in other systems: they help keep your numbers accurate and up-to-date, with a general ledger, forecasts and dashboards offering a holistic view of expenses and profits. Generated reports can be used to present to stakeholders and to identify trends or opportunities.
Accounting summary in Buildium
Tenant & lease tracking: This feature is the core of any property management system, as it helps organize and track all important information about your residents and their lease agreements. This may include: past due payments, crucial lease dates, contact information and more. Most systems also offer tenant screening tools as a part of tenant tracking.
A tenant profile in MRI Residential Management
Budgeting & forecasting: These features deliver value to property managers by centralizing all current financial information and historical lease details to produce accurate projections and forecast future costs. Reporting features can be used to generate customizable reports to easily share information with stakeholders.
Various types of reporting options in Rentec Direct
Building maintenance: Maintenance management functionality allows both residents and staff to submit, track and assign work orders for any type of request, from structural issues to pest problems, through an online portal. Many systems can automatically assign tasks to maintenance workers to ensure a quick response.
Hemlane's maintenance request dashboard
Tenant portal: As mentioned above, an online portal offers residents various ways to communicate with landlords or office staff, accessible at any time of the day. Tenants can update contact information, pay rent and other fees, submit maintenance requests, view lease documents and communicate with office staff.
A resident profile in the tenant portal from Propertyware
The Property Management Software Features You Really Need
Property management software is often flexible enough to match your specific needs and scale with your business growth. However, there are some crucial applications for certain types or stages of property management:
|Small apartment complex or single-family homes
||Tenant and lease tracking: For property managers with a smaller portfolio, keeping track of rent payments and lease documents can be centralized for quick retrieval of important information, such as which resident's rent is past due.
|Multiple complexes, rentals or an HOA
||Tenant portal: When you have several buildings or rentals to maintain, letting tenants contact you through an online portal helps you stay on top of emerging problems you may have missed otherwise.
|Enterprise business buyer
||Accounting and reporting: Corporate real estate professionals need more robust accounting and reporting tools to make strategic decisions to lower costs. Some may also consider facilities management software.
How Property Management Software Is Priced and Hosted
Typically, property management software pricing is based on a few key factors:
- How many units do you manage?
- How many applications do you need?
- How do you want the system deployed?
Vendors most often charge per unit, per month—but be aware that many have minimum monthly costs no matter how large your portfolio. Other costs may include implementation, support fees or hardware expenses.
In addition, costs may differ for on-premise or cloud-based deployments; cloud-based software is generally a smaller investment up-front.
What Businesses Typically Budget for Property Management Software
When we look at how much companies are prepared to spend on property management software per month, the numbers vary. We see a couple concentrations of buyers:
- A combined 48 percent expect to pay between $10 and $75 per month—the vast majority of these buyers manage apartments or single-family properties.
- A combined 30 percent expect to pay at least $151 per month—these buyers are generally commercial, retail, self-storage and other mixed-portfolio managers.
(Note that these prices do not include any potential up-front fees, such as installation and training.)
Hidden Costs of Property Management Software
Property management software has a relatively simple pricing structure, but some solutions include costs that you may not have anticipated. In addition to the monthly fee per unit, consider these other common costs:
- Add-on modules that may not be automatically included in the plan you chose
- Implementation services or fees for the vendor to help set up the software for success
- Training options to help your team use the system effectively
- Access to an API to further customize the software to meet your needs
What Are the Key Functions of Property Management Software?
As mentioned above, property management software offers several benefits:
- Tenant and lease tracking. Manage tenant contact information, lease details and important notifications to avoid late payments or move-out dates.
- Maintenance management. Submit, assign and track work requests from staff or residents, and close out work orders to ensure important tasks are completed in a timely manner.
- Accounting. Track all your financial records, from rent payments to expenses, and generate reports to get an overview of operations.
- Tenant portal. Open a communication channel among landlords, staff and residents online, where users can make work requests, pay rent or post to a message board.
What Questions Should I Ask Vendors When Evaluating Property Management Products?
When seeking information about property management software, you should ask a few questions to make sure it's the right fit for your needs. These include:
What parts of the software do users most frequently report problems with?
While you should pay attention to what vendors are excited to share about their system, be sure to ask about common pain points for customers and which features typically take the most time to master.
What are the additional required costs for the software?
Aside from monthly subscription costs, you should get an idea about additional costs for other services or hardware—training and implementation are common up-front costs to consider.
Can you customize the system to meet my specific needs?
Most vendors are flexible enough to customize their software by adding new fields for tenant information or combining a specific set of features for you.
How Can Property Management Software Help Me With Marketing?
Marketing your vacancies and conveying quality in the photos and text you post can be a time-consuming challenge for property managers. Modern property management systems offer functionality to help with website and vacancy management, with features for branding, search engine optimization help, social media integration and full marketing campaign management.
Check out this example of how software helps you market properties and find tenants in the busy summer months.
Can Property Management Software Help Me Find High-Quality Tenants?
A major feature of most modern property management solutions is tenant screening tools, which allow you to screen for credit, eviction and criminal records much more quickly than manual methods. Screen with accuracy to avoid bad tenants so you can spend more time showing off your amenities.
What Are Some Drawbacks I Should Watch Out For?
Property management software won't immediately solve your operational challenges, but it can significantly streamline your more tedious daily tasks.
As with any software investment, it's important to have a clear goal in mind for the system—maybe you need to automate rent collections or make it simpler for residents to make maintenance requests. A clear objective will help your company determine the exact functionality needed to reach it.
Tips & Tools
Build a Business Case for Property Management Software
Sometimes it's difficult to get your management to sign off on a new investment like software. But there are a few key property management software benefits that could help you get buy-in from your team:
- Faster lease signing. Automated vacancy postings and screening tools streamline the application process so that you find the best tenants and can have them sign leases quickly.
- Automation facilitates communication. Software provides a tenant portal that connects residents and landlords to conveniently email each other about important information so that managers can focus on improving the business.
- Financial tools handle tedious tasks. Property management software has industry-specific tools to calculate common area maintenance (CAM) reconciliation or automate late fees.
Here are some articles about property management software you should check out:
Recent Events in the Property Management Market
Here are some important recent events concerning the property management industry:
- As homeownership costs increase, rental affordability improves in 2019. The 2019 ATTOM Data Solutions Rental Affordability Report shows renting is more affordable than buying a median-priced home in a 59 percent of counties in the United States. With an increase in rental affordability, expect to see fewer people buying property and more renting.
- More millennials than ever are renting, and they expect more technology. With the increase in millennial tenants, offering comfortable work-from-home features like more functional workspaces with high-speed internet, meeting spaces and printing capabilities should become a priority.
- Improve tenant satisfaction by providing a more streamlined package management system. With Amazon continuing to dominate the retail market, you're likely dealing with more packages than you know what to do with. In 2019, expect to see an increase in technology aimed to assist property managers with their parcel management. Smart lockers that alert your tenants when a package arrives or outsourced package delivery services are just two of the ways in which technology can help you improve your tenant's experience and make your property more marketable.
Note: The information contained in this article has been obtained from sources believed to be reliable. The applications selected are examples to show a feature in context, and are not intended as endorsements or recommendations.