Whether you're an independent landlord or a commercial property manager, managing your properties is tough in this increasingly competitive property market. Luckily, there are property management solutions that can automate tasks and streamline operations, so you can focus on more important tasks.
This article offers an overview of property management software. We’ll discuss the benefits of using this software and commonly-included features. Also, we will analyze the different types of property management software, and help you find the best platform for your business.
Table of Contents
- What is Property Management Software?
- How the Property Market is Influencing Property Management Software
- Do I Need Property Management Software?
- Benefits of Property Management Software
- What Does Property Management Software Do?
- Main Types of Property Management Software
- What Should I Consider When Evaluating Property Management Software?
- What Property Management Software Tools Should I Consider?
What is Property Management Software?
Property management software is an app-based software tool that helps property managers automate back-office, financial, and administrative processes. These solutions typically offer features like maintenance tracking, electronic leases, document storage, online tenant portals, and online payment processing. Property management software provides value for a wide range of user types, from independent landlords to property owners managing thousands of units.
How the Property Market is Influencing Property Management Software
Rental demand in the US dropped by 4.5% in 2020 as a result of eviction pauses and government restrictions on viewing properties. Even as the economy recovers, it’s possible that attracting new tenants will be more difficult than it has been historically.
However, it’s not all bad news for property managers. Many property management solutions have introduced VR property tours and augmented reality brochures. Even after social-distancing regulations are removed, these features will help property managers better market their properties.
Additionally, AI and machine learning tools are becoming popular features. AI chatbots make communication with prospective tenants seamless, and increase your number of applicants. Machine learning can generate reports on pricing trends and predict future changes.
Do I Need Property Management Software?
Property management software can make your business more profitable by streamlining workflow and reducing workload. Even if you only manage a single property, there are affordable property management solutions that can make your life easier. For those managing multiple properties, particularly if those properties are commercial, these platforms become even more of a time-saver in your business.
Many property management solutions are completely free to use. For platforms that require a monthly investment, the amount of time saved through payment automation and maintenance tracking often make purchasing a property management solution a positive ROI move.
Benefits of Property Management Software
Implementing property management software can promote growth and take your business to the next level. Here are three ways property management can benefit your business.
Accounting as a property manager can be tricky, especially if you manage multiple properties. Property management software can help you keep up to date with your accounts, so when it comes to filing your taxes, you already have everything organized.
Many property management apps allow you to log payments, record expenses, digitize receipts, and generate financial reports. Some solutions can also be connected with your bank account, so transactions relating to your portfolio are automatically uploaded for you to review.
Many property management solutions automate communication with tenants, contractors, and property owners. Features like automated rent reminders and bulk text messaging accelerates communication and reduces workload.
If you’re looking to grow your business, property management software is a must. These platforms do the heavy lifting of your day-to-day administrative tasks, so you have more time to grow your business.
What Does Property Management Software Do?
There are a variety of property management solutions available on the market today. Although features included in each solution will differ, the majority of property management software solutions will include these core functionalities.
Rent Payment Processing
Property management software streamlines the rent collection process. Most solutions have an online resident portal where your tenants can submit payments electronically. Additionally, automated email and text reminders can reduce delinquent payments.
The majority of property management solutions partner with tenant screening services. You can require tenant screening as part of your electronic rental applications, and view the screening reports directly in the platform.
Many property management solutions automatically syndicate your rental listings to various property listing websites. When tenants submit applications through these websites, they are automatically uploaded in your property management database. This is a huge time saver for those who have a large portfolio that want to list their properties on multiple listing websites.
When you’re managing multiple properties, tracking maintenance requests and managing contractors can be a hassle. That’s why most property management software offer an online portal that allows tenants to submit pictures, videos, and descriptions of the problems they’re having. You can track maintenance requests in the property management solution, and create maintenance tickets for contractors.
Property management tools help you to automate the leasing process by centralizing tenant information, storing electronic leases, and sending automated reminders for lease renewals. Most property management software is cloud-based, so you can remotely access tenant information in the field.
Most property management applications offer automated bookkeeping, allowing you to easily digitize receipts and keep track of your finances. These apps also automate notifications and send reminders to tenants when their rent is due, if there’s any maintenance work happening, or if their lease is due to expire.
Main Types of Property Management Software
In this section, we will discuss the difference between residential and commercial property management software. We also offer an overview of the best solutions on the market for each type of software.
Residential Property Management Software
Residential property management software is used to manage residential properties, student housing, and affordable housing. Avail and Cozy are the best options for independent landlords that manage less than 5 properties. Both of these platforms are free to use and offer a good degree of automation without being bloated with features that you don’t need.
If you manage less than 150 properties, you will need a more powerful software solution. Buildium and RentRedi are more robust, and allow you to automate parts of your administrative tasks through an easy-to-use and intuitive app. Also, they offer a great deal of scalability when you’re building your property portfolio.
If you manage less than 150 properties, AppFolio is your best option. This solution offers advanced features such as an AI leasing assistant and 24/7 maintenance contact center. These features are ideal for managing a large volume of properties.
Commercial Property Management Software
If your portfolio consists of properties like retail stores, office spaces, and industrial properties, you will need a solution with marketing and leasing features tailored to your commercial needs. Solutions, like AppFolio and Re-Leased, offer market-specific features not found in most residential property management software. These features include common area maintenance, corporate accounting, and support for ratio utility billing.
Both Appfolio and Re-Leased are popular choices for commercial property managers and owners. Re-leased can only be used for commercial properties. AppFolio can be used for a hybrid portfolio of commercial and residential properties.
What Should I Consider When Evaluating Property Management Software?
To help you begin your research into different property management solutions, here are four criteria our analysts use when evaluating software. We also discuss common mistakes you should avoid during the evaluation process.
When evaluating different solutions, you should decide which features are the most important for you. We covered the main features that are included in property management software earlier in this article.
A best practice for evaluating features is to create a features chart with must-have features and nice-to-have features. This will help you narrow down your list of platforms to the ones that are the most relevant to your business.
Must-have features are ones that will optimize your core business. Maintenance tracking, in-app messaging, and online payment processing typically fall under this category.
Nice-to-have features are ones you are willing to sacrifice if the solution is more affordable. Typically, these features include AI leasing assistants, maintenance contact centers, and two-way texting.
Free trials are the best way to evaluate usability. You should do a mock run of a typical workflow and compare that experience with other solutions. Does the solution have a modern interface? Are there shortcuts for commonly-used features? If a free trial isn’t available, you should schedule a product demo.
Pricing for property management software varies widely depending on the sophistication of the product. Typically, prices range from free to $5 per unit per month, and most small businesses pay around $10 to $250 per month for property management software. To get started, check out this price comparison table of the most popular software solutions on the market today.
Exceptional customer support can be a time saver when you are troubleshooting issues with the product. Customer support is particularly important when you are onboarding and first learning how to use a solution. Here are some questions you should ask when evaluating customer support.
- Does the company offer live chat, phone, and email support?
- Does the company offer one-on-one onboarding support?
- Is customer support available 24/7?
- Is customer support available in all subscription plans?
Purchasing software can be a convoluted process with pitfalls that could cost you time and money. Here are some common mistakes you should avoid when purchasing software.
- Evaluating software not built for your portfolio type
- Evaluating software not ideal for your portfolio size
- Not differentiating must-have and nice-to-have features
- Not signing up for free trials and product walkthroughs
What Property Management Software Tools Should I Consider?
The best property management software for you depends on the type of portfolio and the number of properties you manage. We’ve created a detailed resource to help you compare property management software. You can also browse our complete list of property management software reviews.
For DIY landlords, we recommend a property management solution, like Avail. Avail is completely free to use, so there is little downside to test this product for your business.
Avail is a popular property management solution used by over 200,000 independent landlords nationwide. Avail is best suited for landlords managing 1 to 15 units. This platform includes property marketing tools, automatic rent collection, maintenance request tracking, and eLeasing.
For residential property managers with 1 to 50 properties, you should consider a solution like Buildium. Buildium includes the core set of features needed to manage a portfolio of this size, including property listing syndication, maintenance tracking, accounting, and reporting.
Buildium is a property management solution used by over 16,000 property managers. This platform is used to manage a variety of portfolio types including community associations, student housing, affordable housing, and residential properties. Buildium a powerful end-to-end solution equipped with tools to manage the entire property management lifecycle from the initial marketing of your units to inspecting your properties after tenants move out.
For commercial property managers, check out Re-Leased. Re-leased includes a suite of automation and communication features that are designed specifically for commercial property management.
Re-Leased is a commercial property management solution used for various property types including commercial properties, co-working spaces, student accommodations, and office & industrial properties. This solution is used by more than 2,500 customers in more than 40 countries. Re-Leased is ideal for small to midsize businesses with a rent roll exceeding $1 million.
Property management software can help landlords and property managers streamline their operations. There are various types of property management software, and the best solution for you will largely depend on your portfolio size and type. Focusing on specific software criteria, like features and usability, can help you evaluate the different options you are considering.