The property management industry (PM) is one of the most rapidly expanding sectors in the United States. According to Fortune Business Insights, the global property management market is expected to reach USD $23.63 billion by 2026.
Property owners and managers are finding themselves with more properties and tenants than ever before as a result of this growth. And thus, are turning to technology solutions like property management software, online rentals, and online payments to simplify their workflow and grow their business.
Consequently, as the property management industry grows, the demand for quality software rises in order to:
- Beat out the competition by providing quality service (other property management companies)
- Maintain an up-to-date streamlined business process
- Attract the tech savvy buyers and renters of today
- Offset labor shortages -as the demand for rental property grows, the supply of labor to service that demand is lagging behind. This influx of residents means that rental property managers are busier than ever, often stretched too thin as they handle an increasing number of calls and requests from tenants while simultaneously managing properties. That’s where PMS can help.
People expect to be able to pay their rent online or schedule maintenance requests with just a few clicks.
According to Chuck Hattemer, co-founder & CMO of Poplar Homes, “ Property management is going through an evolution right now, and tech providers have stepped up to the plate to disrupt the industry”. Popular Homes is a tech-enabled property management company with more than 2,200 doors under management across 10 major metros.
“One of the top reasons why residents won’t renew a lease comes down to poor management” said the CMO and “this proves that the property management experience from a renter’s perspective matters to your bottom line as a property owner”.
Streamlining internal workflow to increase efficiency whilst providing accessibility features for potential renters is your solution to solve the high turnover rate.
Ultimately, the aim for every business is to grow its revenue through increased sales while decreasing expenses. Thus, meeting the basic requirements of a virtual buyer’s environment means keeping up-to-date with the latest software and technology, as well as ensuring that you’re doing what you can to keep your system running smoothly and efficiently. A good system in place can advance your real estate and property management businesses.
However, with so many property management systems on the market, it can be difficult to figure out which software is best for your needs. Are there certain software solutions that are better than others? How should you evaluate the options?
This guide will walk you through the different types of property management software and give you tips for selecting the right solutions for your business.
WHAT IS PROPERTY MANAGEMENT SOFTWARE (PMS)?
Property management software, also known as a PMC, CRM or ERP, is a system that allows property managers to track and manage their properties and tenants. By using a property management system, you can keep track of all the relevant aspects of your business operations in one place.
While there are hundreds of different types of property management softwares available on the market, they all generally fall into one of two categories: server-based or cloud-based software.
Here are a few things to help you make an informed decision about whether server based or cloud based is best for you.
Server-based software runs on servers located in your place of business or at a third-party hosting provider that you’ve contracted with.
The benefit of this is that the control is in your hands over the data, upgrading of hardwares and installation of updates. With that said, this is viewed as an outdated solution for a few reasons:
- a traditional software model requires that you purchase, install, update and maintain all of the hardware and IT services needed to run the software.
- it requires a physical space which adds to the expenses of the organization.
- it also comes with the risk of possibly losing all your data should these physical servers get damaged.
- and not to mention the costs of maintaining and upgrading the servers.
Situations like Covid-19 have highlighted another downside to server-based softwares. VPN’s go hand-in-hand with server-based softwares so that workers can access the softwares remotely. Therefore, companies must also ensure that the VPNs are setup on every device which could be very time consuming.
Cloud-based software or also known as cloud computing runs on remote servers and data centers that are owned and managed by your software provider. To access the software, you log in over the internet from any device with a web browser and an internet connection.
An obvious benefit to this compared to server-based software:
- is the lack of required investments in setting up the infrastructure.
- with its ‘pay as you go model’, you only invest on the resources that you need. Saving you costs that otherwise would have gone to infrastructure for server based and maintenance/upgrading costs of the servers.
- risk of loss of data is significantly reduced via cloud computing. Data can be backed up to the cloud automatically on a regular basis. Hence, this can help in recovering these valuable data in case of human error or natural disasters.
Today, cloud-based property management software solutions are quickly eroding the market share of their traditional server-based competitors. In fact, according to Forbes, 90% of companies are already embracing cloud computing based on a study by 451 research.
As the COVID-19 pandemic continues to affect people, businesses, and essentially all aspects of daily life, there is no doubt that the way we live and work has been drastically changed. On the bright side, this global pandemic has also accelerated many digital transformations and solutions i.e. cloud-based property management software for property management businesses.
HOW PMS CAN MAKE PROPERTY MANAGEMENT EASIER
Whether you rent one or multiple properties, dedicated property management software (PMS) can help you streamline your rental operations.
For example, with the right software, you can:
Property managers and landlords can simplify accounting by using software to generate invoices, keep track of payments, calculate interest and late fees, and automate the process of sending out monthly statements. This can help prevent mistakes, enable faster payment collection and reduce the time spent on accounting.
Communicate more effectively with tenants and prospects.
Software is often used to manage leads and communicate with current and prospective tenants. Property managers use it to schedule showings, collect applications, track leases and communicate with tenants via email. The system may also be integrated with a website so that renters can apply for available properties online.
By extension, it also allows you to provide better customer service by enhancing communication with tenants, landlords or contractors through online portals and automated messaging services such as SMS or email. This can be used for maintenance requests, rent checks or simply just for general communication.
Automate Marketing Tasks
Property managers may choose to integrate software with marketing tools like MailChimp or Constant Contact to automate certain marketing tasks such as emailing newsletters or promotions to tenants or potential renters. Some property management software allows users to create custom reports that they can send out via email or post online. This can help landlords market available units, reduce vacancy rates and maintain relationships with current and prospective tenants.
Automate routine tasks like rent collection and maintenance requests.
It is important for property managers to have quick responses from their staff so that the customer does not feel ignored and loses interest in the business. When technology is being used for managing the properties, then this becomes an easy task as everything can be done with just a click of a button.
Improve data insights
The more data you have on your properties, tenants, and landlords – the better decisions you can make about your business. PMS allows you to collect large amounts of data that can be turned into actionable insights and answers your questions like:
- How much should I charge for rent?
- Will my tenant pay on time?
- How long will it take to fill a vacancy?
- Who should I market this property to?
If your team is consistently running behind on important tasks, it may be time to evaluate how PMS can help your organization become more efficient and competitive in the market.
So which property management software is the best? That really depends on your business and what features you need.
10 FACTORS TO CONSIDER WHEN CHOOSING A PMS
The prospect of buying property management software can be intimidating. There are so many options available and every one promises to help with your problems. How do you know which one is right for you?
Here’s a list of important criterias to consider when choosing a property management software:
If you manage fewer than 100 properties, there are many different types of software that can handle your needs. However, if you manage more than 100 properties, you’ll likely want to use dedicated property management software.
A short list of features might include accounting tools (for managing rent payments and tracking expenses), reporting capabilities, and maintenance management (to keep track of repairs and issues). How much automation do you need? Some software can automatically send rent reminders or help with scheduling repairs.
Some services offer a free trial before you commit. Your budget for property management software should also include the time it will take to learn how to use the software.
As mentioned earlier, our recommendation and as is the trend for most companies, cloud-based software is the future.
If you’re running a business, you probably already have various tools and programs that you use to accomplish specific tasks. Ideally, your property management software will integrate well with these apps so you don’t have to spend time manually entering data across multiple platforms.
For example, if you use QuickBooks for your accounting, you will want to make sure that your PMS integrates with QuickBooks so that it can automatically send financial data (like rent payments and security deposits) directly into QuickBooks for you. This saves time and prevents costly errors from entering data by hand.
Look for reviews from industry publications and competitors as well as actual customers to get an idea of what others think about the software you are considering. Does it have good customer support? Is it easy to use? How is the training process? These are all things that you want to consider before making a decision.
You’re not just buying a piece of software; you’re buying into a long-term relationship with the vendor. It’s not always easy to predict how long that relationship will last, but look for signs of stability and growth before you make your choice.
A lot of great property management software companies have focused on one aspect of property management. Some focus on marketing, some focus on maintenance, and others focus on accounting. But you want a solution that covers all the bases and gives you an end-to-end solution for managing your properties. And if it doesn’t include everything you need, make sure it integrates with other systems so you can get everything in one platform.
Some systems are easy for tech savvy users but not for those who aren’t quite as familiar with technology. You want a system that is intuitive and user-friendly for your team to work more efficiently and effectively. It also needs to be able to grow with your company.
Mobile apps are becoming more and more important for landlords. There are so many solutions available for landlords to manage their properties from their phones that it’s almost a requirement now. Make sure their mobile app is helpful and intuitive enough to use before signing up. To expand your presence in the property management industry, it’s important to have clarity about what Proptech is available today, and what types of innovations are expected in 2022.
Property management software comes in all shapes and sizes, with different levels of functionality and options suited to the needs of your business. It can be overwhelming trying to find the right solution that addresses all your issues and meets your budget.
While it’s tempting to go straight for the most expensive system with all the bells and whistles, it might not always be your best option. Keep in mind that more expensive systems also come with a steeper learning curve, which can make it difficult for staff members to adapt quickly.
By asking yourself these questions, you’ll be better equipped to choose a property management software that fits your needs.
10 PROPERTY MANAGEMENT SOFTWARE TO MAXIMIZE ROI
The best property management software is easy to use, but it’s also powerful enough to handle everything from rent collection and tenant screening to maintenance requests, accounting and reporting. Some property management systems are designed for specific types of properties or landlords, such as multi-family residential or vacation rentals. Others are for commercial real estate.
Take a look at some of the preferred PMS in the market today:
- Buildium: Designed to simplify the tasks of property managers and property management companies. Supporting multiple property types, including residential, community associations, student housing, and affordable housing, it has all the tools necessary to streamline the management of rental properties.
- AppFolio: Best for multifamily apartment complexes, single-family homes, or community associations looking for a complete platform including accounting, applicant tracking and online rental applications.
- Rent Manager: Award-winning property management software for residential, commercial and short-stay properties of all sizes
- ResMan: Leading platform for property management, most preferred by owners, operators and investors across the multifamily, affordable, and commercial real estate marketplaces.
- MRI Residential Management: The company offers an end-to-end solution for multifamily properties. It is a comprehensive management system that seamlessly integrates strategic planning, daily task planning, and performance measurement.
- RealPage: An extensive property management software offering solutions for the single-family, commercial, multifamily, and vacation rental housing businesses
- Yardi: Offers a full suite of products to help you streamline your processes. Built for any “size business for all real estate markets” i.e. supports residential, commercial, affordable, manufactured housing, condo/associations and self storage markets etc
- DoorLoop: The software can be used to monitor residential properties, commercial spaces, student housing, community associations, affordable housing, and more. Its key aspect is that it provides a single solution for property owners to manage the entire rental cycle, from advertising their property to collecting rent and renewing leases.
- Hemlane: An all-in-one, property management solution that offers small businesses a range of capabilities, including property marketing, applicant screening, lease tracking, rent collection and maintenance coordination.
- Tenant Cloud: A free service for landlords and property managers with fewer than 75 units, it’s an ideal option for small-scale property managers working with limited budgets.
With the right property management software you’ll be able to scale your business faster than ever before. And since most property management software comes with a mobile app that lets you manage everything from anywhere, there’s no more need to be tied down to an office.
GETTING THE MOST OF YOUR PM SOFTWARE BUDGET
You’ve done your research, you’ve narrowed down your list, and you’ve found the perfect property management software package. You’ve submitted the purchase order and want to move on to more important tasks. What do you now?
The first thing we have to do is make sure we are getting the most out of our current budget. Here are some ways we can do that:
- Make sure you have a setup and plan in place for any new hires that will be joining the team. Training them on how to use the software will help them get up to speed faster, which means they can start adding value sooner.
- Make sure your current employees are using the software properly and efficiently. If you notice people not using the software or going around it, find out why and see if there are any adjustments that need to be made.
- Get people involved in the decision making process regarding what PMS software should be used. If people feel like they were a part of the solution, they are more likely to use it effectively.
- Ask for feedback from users periodically to see what’s working and what isn’t. You always want to improve, so having a constant stream of feedback is great for success.
Growing your property management business these days not only requires updated technology and solutions but for you to be well ahead and stay above water from the rising competition, effectively using available resources to its full potential is a turning point.
You can easily start by doing something simple like offloading routine tasks so you can focus on what matters most — getting more deals and growing your company’s value. Transforming your company to be more virtual capable and hiring professional virtual assistants ensure you cut costs, and maximize your ROI. They can improve your property management services in tremendous ways and what’s better than knowing your company is still functioning while you sleep? Or that your company is able to cope up with the demands of clients on the clock?