Definitive Guide to Property Management Software: Everything You Need to Know
Witness the carefully selected property management software to boost your real estate output and make clients satisfied.
David was hopeless. Misfortunes bombarded him from every corner. Several tenants were late on their payments.
Expenses for repairs and maintenance were piling up for months. Recently, David was forced to file for a property damage claim and got no answer from his insurance company.
A year ago, David was a person with his savings and the idea of purchasing several properties and leasing them. At that time, it seemed like a dream coming true. A year later, David is a landlord with a headache and seemingly no end to his sufferings.
You might say that David's problem is that he was too naïve or unrealistic when having the idea of becoming a landlord. In reality, as thousands of other landlords, real estate owners, and hotel managers, David faces the simple yet foundational issue — he does not use good Property Management Software (PMS).
For decades, the property management system was based on outdated property technologies. Landlords and proptech companies used paper and spreadsheets to record trust accounting transactions and jot down tenant requests. Eventually, the papers piled up, and property professionals faced the inevitable — issues with accounting, financing, maintenance, screening, and communication.
Fortunately, the modern technological age offers unique software that you can use. Managing property has become easy and straightforward.
If you are a real estate professional, a proptech expert, or a proptech startup founder and you still think you do not need property management software, better think twice. The statistics offered by prominent newswire distribution company Intrado demonstrate that property management software's market size reached $964 million in 2021. The estimates suggest that the market will reach $1.37 billion by 2026. What does it mean? It means that the number of landlords, hotels, and proptech companies using PMS is rising. The sooner you get a piece of the pie, the lesser degree of competition you experience later.
Do not just follow existing real estate technology trends. Be the person who sits in the first row and witnesses how these trends boost your business. To help you with that, here is everything you need to know about property management software.
What is Property Management (PMS) Software?
It is something that you must have. It is something that you cannot avoid. It is something that will make your life easier.
I am not talking about a new smartphone. I am talking about property management software. At this point, you should have a logical question — what is PMS software in the first place?
As usual, there is a short and long version of the answer. In short, property management software is a program specifically designed to help manage residential and commercial properties. It can be both real estate software and hotel management software as well.
In a more elaborate perspective, property management software is an application with a myriad of features assisting property managers and landlords in managing day-to-day operations relating to various aspects of rental management, including elements like reporting, screening, accounting, and many more.
The best thing about property management software is automation. Many people fear automation. Business owners and landlords often want to have direct control of any aspect of their property (think about David, the landlord, once more).
In reality, having direct control over every aspect of property management inevitably faces the factor of human error. No matter how harshly it may sound — automation is the future. With adequately chosen property management software, you can still have control over your property.
The primary difference is that you do not need to care about mundane day-to-day tasks and can focus on more creative aspects of your business, which machines cannot do, yet.
What the fuss is all about?
To understand what is property management software and why you need it, consider several key features of the technology:
- Property management software offers numerous accountancy features. Things like electronic funds transfer, bank reconciliation, tax filing, and track payables - all these elements can be automated through PMS.
- There are several great operational features embedded into the technology. With property management software, you can have a website promoting your listings. You will also have an owner portal with access to all kinds of property data. Most recent property management applications offer to share essential documents with owners and tenants through an online file library. These are elements ensuring your operation runs smoothly.
- With property management systems, you can forget about manual labor linked to management and leasing. It means that with a click of a button, you have ready-to-go rental applications and electronic signatures. It means that you do not have to manually sign every document, just use the app and electronic signature option.
Do you not know where to store physical copies and digital files? Forget about that. With property management software, you can keep digitizing everything and store it in document storage. Without any effort, you can give access to the storage to other people. It will save you time and physical space.
The fuss is about programs and applications making a more significant chunk of manual property management obsolete.
Types of Property Management Software
There is no formal differentiation between various kinds of property management systems. When looking for one, you will not find lists marked type a and type b. However, after analyzing tons of information, we came up with our differentiation, the one seeming universal to the needs of landlords, proptech professionals, and hotel managers.
To Install or Not to Install
You do not need to know about the nature of cloud-based and server-based services. Yet, these terms can speak volumes about types of property management software.
- There is a kind of property management system that a user can install on a computer for people who are not used to working with online software platforms. If you are a landlord with only several units, just install property management software on your laptop and manage it yourself. In turn, if you have a significant operation with numerous units, you will need an IT team, the professionals who can install and maintain server-based property management software.
- For users familiar with online software, cloud-based property management software is the best solution. Imagine. There is no need to install anything. Just log in to the program via a web browser or mobile device and access all your data and property management tools available in the cloud.
Now you can see that in terms of functionality, there is server-based and cloud-based property management software.
Meeting the Landlord’s Needs
The evidence shows that property management software is most useful within two categories - residential and commercial properties.
Respectively, you can speak about property management software for landlords and hotel management software. Starting with the first type, there is plenty of software that can help you find great tenants and run your units smoothly.
With applications like Pendo, you get an option of online applications, digital lease agreements, and tenant screening tools. Property management software for landlords mainly focuses on making the process of leasing automated and easy to understand. Besides, with the program, you receive great screening tools, the instruments that allow you to avoid the biggest concern of property managers — the costs associated with vacancies.
Need to Manage a Hotel Single-Handedly? Not a Problem
While property management software for landlords helps with several units, hotel property management systems allow elaborate and complex business operations.
Programs like eZee Absolute provide a range of features that help you deliver a superior guest experience and keep up with day-to-day operations at the same time.
Traditionally, a hotel property management system helped with front-office capabilities like booking, check-in/check-out, and billing. With years passing, the hotel property management systems evolved into the goliath. Today, it helps manage almost every aspect of hotel management.
You still have an option with easy online hotel check-in and check-out. What is more, the current hotel property management system offers tools to improve housekeeping efficiency. You receive instant updates on your mobile device.
The updates indicate when clients check out and the room is ready for cleaning. Imagine the response time for various room-service tasks with such software accessible through your phone.
If you are an experienced user, hotel property management software can help with accounts receivable, accounts payable, and commission handling. Virtually, there are almost limitless options to make your life easier as a hotel property manager.
Why Should You Start Using Property Management Software?
If you still raise such a question, there are several more insights into the realm of PMS. Property management technology was designed to meet the needs of the most demanding property managers. In general, there are five specific advantages of property management systems, which provide the majority of users with what they were looking for.
Collecting Rent and Payment Processing
You probably had an uneasy feeling of seeing tenants late on their payments. You will be surprised to learn that many clients simply fail to use various payment methods to pay for their rent properly. In other words, being late on payment does not always mean the tenant does not want to pay the rent.
Property management software provides tenants with a range of options for online payment. For instance, a person can choose Credit Card, Debit Card, and/or ACH. With proper PMS, you can relieve yourself from seeing late payments, and you can alleviate your tenants from running to the local bank at the beginning of the month.
As a standard, the majority of property management systems have an online payment processing platform. As an additional feature, you can have rent tracking solutions included. It is an easy-to-use tool helping you to check who is behind on the payment and who is up-to-date.
With its online payment processing and rent tracking, PMS is the best solution to streamline your client’s payment history.
You’ve Got Mail
There is a specific sound that can be both enjoyable and annoying. You hear this sound almost everywhere. The beauty is that this sound means that you can meet tenants’ and guests’ needs in the PMS world with several clicks.
This sound is the sound of automatic notifications. A central marketing agency Innago argues that effective communication is the cornerstone of healthy tenant-landlord relationships. With property management software, you can receive a range of important notifications, the ones ensuring you won’t receive any phone messages and calls with someone arguing about an expiring lease.
Automatic notifications delivered by the application focus on rental reminders, documents you need to sign, and late fee notifications. Besides, if there is some upcoming maintenance work or a community announcement, like a good landlord, you can notify your tenants by sending them emails and texts through the application.
Bookkeeping Keeps You from Fines
Do you need more personal time? You had no vacation in several years. I bet your mind is constantly focused on bookkeeping — tracking rent, checking expenses, and generating income reports.
With PMS, you will have more free time on your hands. With applications like AppFolio, you can have all bookkeeping procedures automated. Say no to all the manual tasks you have to perform again and again.
The beauty is that everything is recorded with PMS. If you are at Home Depot buying some maintenance materials, just take a picture of the receipt and record in it the app. If the tenant pays online, the procedure is recorded.
For additional fees, you can connect your bank account to the PMS, which means your expenses and income will be recorded as well. Believe me, when tax season arrives, your CPA will be glad to see everything neat and organized.
Good vs Bad Tenant
Every landlord and property owner wants to have good tenants. They pay in time and inflict no property damages.
However, you need to understand that finding a good tenant is, almost in every case, dependent on the screening process you employ. Fortunately, property management software can help with that.
The majority of the PMS comes with embedded tools that help you advertise properties on listing platforms like Zillow. It is the first step to ensure that you receive inquiries from high-quality applicants.
If you want to be even more elaborate, the property management software contains different screening services. An eviction report. A criminal record. A bad credit history.
You will be the first to know whether your new tenant is a potential liability or a prospective client. Basically, with PMS, you have listing and screening solutions in a single application.
When It's Time to Change the Carpet?
Without a doubt, property maintenance is a major hassle and an enormous headache. If you manage maintenance personnel yourself or give your personal phone number to tenants, you are in big trouble. If you are not diligent enough in checking text messages and sharing maintenance tickets, you will soon find major problems with maintenance requests piling up.
Property management software includes a maintenance portal. It solves both your problems.
Through the portal, tenants can submit pictures, videos, and descriptions of maintenance issues. You receive a notification and can review the request on your mobile device. You use the app to forward the request to a maintenance team.
In three simple steps, you fixed the issue. You do not need to share any personal information. You do not need to check your email and text messages regularly.
Pros & Cons of Property Management Software
Like every story, there are always two sides to the coin. While PMS grants many opportunities, some scenarios can have adverse effects on your business. Here, we would like to tell the story objectively so you will be prepared for anything.
Time Is of the Essence
On the upside, PMS can save you a tremendous amount of time. It is no secret that being time-poor is one of the biggest challenges landlords and hoteliers face. With the help of PMS, you receive real estate software solutions that free up time for yourself and ensure that no precious time is wasted on various mundane and manual tasks.
On the downside, poorly chosen property management software can be extremely hard to handle. For instance, you can spend many person-hours trying to grasp the PMS or train your staff to use the application. The perspective demonstrates that choosing PMS that meets your specific needs is of the essence.
Get Rich or Die Trying
An adequately chosen PMS offers many financial advantages. While the application is designed to minimize administrative, management, and operational costs, it helps save finances on all the paperwork. With automated bookkeeping, you can boost your revenue and avoid costly fines.
On the flip side, having the PMS with all the essential features can be a financial burden if you have a small business. You need to check your budget before plunging headfirst into the realm of PMS.
The Role of Integration
An All-in-one platform is among the most significant advantages of the property management system. With the PMS, you receive a range of tools integrated into one application. Besides, many property management software can be combined with other products like SiteMinder and STAAH.
In reality, when exposed to multiple software, there is a chance of being overwhelmed with a choice. Not knowing what PMS to choose can be a real problem. Fortunately, you have a guide like this one, which helps navigate your choice and help select the option best suited for your needs.
Who Is the Boss?
Many landlords, hoteliers, and property managers prefer handling everything personally. With the PMS, you can have a grasp and a say in all issues and tasks firsthand. With your experience and interest in the business, you are the one who knows how to handle each given situation best.
Putting everything on your shoulders can create massive pressure. The PMS will likely provide you with numerous daily notifications on different matters. If you are not prepared to do hard work, you need to find people who will.
The Subtle Art of Choosing the Best Property Management Software
The best property management software is one that meets the needs of your business. There are various approaches toward finding the most appropriate PMS. However, several universal aspects should be considered regardless of the method used.
The Key Is in the “Needs”
Choosing the right software starts with identifying your business needs. As you know, at this point, each property management service comes with different features. Besides, you are aware that there is an option of “poorly chosen PMS” (see section above).
You need to crystalize the primary pain points to understand what the PMS to do for you specifically. The overall goal is to have the software tailored to your business needs.
Consider a range of options: cloud-based software, accounting function, property management, communication, maintenance, inspection, compliance reporting, and data security.
The chance is you do not need all the functions simultaneously. To save money on additional features and understand how the PMS operates, choose the most functions you need.
Compare and Contrast
When you know what you need, it is time to select among the available options. You can use this tool to get access to a range of property management software. Use the filters to alter the search and find several options that can meet your budget and needs. You may also read comparative reviews online (for instance, check our article on Rental Property Management Software)
Remember, check out each software and look for demos. Take advantage of free options and look deeper into what each application offers.
If you need an even objective perspective, you can find the company on social media and look for the experiences of previous clients. Get to know the company that produces the PMS.
I don’t mean you should change a place to live. If you successfully completed the steps above, it is time to run a trial migration. With the approach, you can witness how easily or not you can transfer data to the new system. Take note of any hiccups, and consider them later while making a final choice.
If you find the PMS that makes migration smooth and enjoyable, it means you have found the software that will help you handle property management.
How Much Does Property Management Software Cost?
You might have heard the saying: there’s no such thing as a free lunch. Actually, if you invest time and effort in finding a proper PMS, you can have a free dessert. While many application features have a price, free property management software offers some essential elements that can be enough for your business.
We would like to show you three examples to help get the idea of a range of prices for the PMS.
TurboTenant is property management software that does not require a significant financial investment. The application is free for clients who want to list and market vacancies, manage leases, and screen applicants.
For additional features, you will pay $14.99 for a rent estimate report, $9 per electronic document signature, $14.99 per rent sign, and a price starting at $29 for a state-specific legal form.
If you do not need a monthly subscription and do not have a decent budget, TurboTenant is the best option to consider.
TenantCloud is the option best fitting businesses with fewer than 500 options. It offers affordable packages and focuses on listings.
With the PMS, you receive several ties, namely basic, standard, and advanced. Each option has a monthly subscription rate.
For the basic tier, there is no cost for businesses with less than 75 units. Essentially, you receive an admin account, basic accounting worksheets, maintenance requests, online leases, and automatic late fees for free.
For the standard tier, there is a $9 monthly price for up to 150 units. There are some juicy additional features like E-signature and Google calendar sync coming with the option.
For the advanced tier, there is a $35 monthly price for up to 500 units. With the option, you get access to five admin accounts and 24/7 customer support.
Property Manager Cloud is among high-end PMS options. However, if you have different properties in your portfolio, the software is worth its money.
The pricing depends on the number of units you have. It is $15 monthly for 1 to 10 units. For 11 to 20 units, the price is $25. 21 to 40 units cost $35 per month. For up to 100 units, you need to pay $55. Finally, for over 100 units, the monthly cost is $75.
Fortunately, for every price option, there is an all-inclusive features opportunity. The price for each given PMS depends on the features you want to pay for.
Basically, if you need some surface elements, you can have them for free.
Something to Think About
Using Property Management Software is the difference between having a headache like David and having almost no vacancies and late rent payments. It is hard to argue against the PMS. The current market trends and the overall rise of interest in real estate technology and proptech instruments make it vital to use PMS for competitive advantage.
Remember to use the guidelines to choose your PMS carefully. Keep track of your business’ needs and do not overpay when you can have some essential PMS features for free. Think about the software as a vital part of your business.
Nowadays, having no PMS is like having a car without tires. It will run, but soon enough, it will become a major liability.
Invest time and effort into the proper selection of the Property Management Software. Ask yourself, what features do my business need to make my clients satisfied and my days clear of stress?