Property Management Software
BuyerView | 2014
Every year, Software Advice talks with thousands of property managers looking for the right software for their companies. This provides us with unparalleled insight into the needs of property management software buyers.
We recently analyzed a random selection of 385 of these interactions to uncover managers’ most common pain points and their main motivations for purchasing new property management software.
Fifty-three percent of buyers in our sample report using manual methods, such as a physical paper log or Microsoft Excel, to manage properties. Another 32 percent currently use a property management system (PMS), while 9 percent say they don’t use any method at all.
In Software Advice’s 2013 Property Management Software BuyerView, a combined 57 percent of buyers said they used spreadsheets or manual methods. By comparison, that number has decreased by about 4 percent in 2014, while the number of buyers who use multiple methods decreased from about 7 percent to less than 1 percent.
Andrew Propst is the president of the National Association of Residential Property Managers and president of Park Place Property Management in Boise, Idaho. He says that, in the past few years, there’s been a significant increase in the number of property management systems that consolidate all property management functions into a single solution. This may explain why more buyers are adopting a single system to handle all operations.
Of those buyers evaluating new software, 35 percent of the reasons mentioned involved wanting to improve efficiency, making this the most-cited reason. Meanwhile, 10 percent of the mentions say their current system is out-of-date or incompatible with modern software, and 9 percent say they would like to “go electronic” and begin using software to manage their properties.
Most interesting, however, is that 19 percent of the reasons mentioned in our sample want to switch to a system specifically designed for property management. According to Propst, until about three years ago, many popular property management systems were still server-based. The recent growth of cloud-based solutions, however, has given managers a less expensive, easier to implement and more convenient alternative, which may explain the increased demand for a specific PMS.
When asked what features buyers want most from a property management system, 26 percent of the features mentioned were tenant and lease tracking, which are the most common functions of a PMS. Other commonly requested features include maintenance functions (17 percent of mentions) and reporting (16 percent of mentions).
Web-based features, such as Web portals for residents, online payments and mobile integration, were 15 percent of the mentions. As vendors continue to offer more cloud-based systems, these highly convenient features are becoming expected by both residents and managers, Propst says.
“From what I’ve seen in the associations I belong to, [Web-based features] are not seen as a big upgrade anymore, they’re par for the course,” he explains.
In the 2013 report cited above, nearly 100 percent of buyers requested tenant and lease tracking, and 90 percent asked for accounting features. While these features are still the most requested in 2014, it’s clear that Web-based features are continuing to grow in popularity.
More than half of buyers in our sample (57 percent) say they haven’t determined if they want Web-based or on-premise software. However, 40 percent say they’re specifically seeking a Web-based solution. These solutions provide on-the-go managers with convenient functions such as the ability to accept online payments 24 hours a day and access information via mobile device.
“We’ve seen a large demand for conducting electronic inspections with iPads,” Propst notes. “That’s a big thing with property management software now; it’s become commonplace.”
While the percentage of buyers who are undetermined on deployment preference has increased since 2013, the preference for cloud-based software has also increased, while that for on-premise solutions continues to drop.
The majority of buyers evaluating property management software in our sample (59 percent) are residential and apartment managers. Mixed-portfolio managers, or those who manage multiple property types, make up 10 percent of buyers, while community and HOA managers make up 9 percent.
Propst says that a recent construction boom may account for the prevalence of single and multifamily property managers. Multifamily construction currently accounts for 35 percent of all housing units built so far in 2014—a 10 percent increase from 2013—and single family housing is expected to see a 24 percent increase in units from last year.
“During the slowdown, we had a lot of areas of the country that basically were not able to keep up with the demand [for housing] because nobody wanted to take the risk,” Propst explains. “Construction loans weren’t available, so there wasn’t money available to build properties. So now you have all this pent-up demand for houses and rentals, and there are a lot of people jumping back in.
Software Advice regularly speaks on the phone with organizations seeking new property management software. To create this report, we randomly selected 385 of our phone interactions from 2014 to analyze. If you’d like to further discuss this report or obtain access to any of the charts above, feel free to contact me at firstname.lastname@example.org.