Learn More About Residential Property Management
What is Property Management Software?
Property management software is a boon for overworked property managers and owners. The front office and back office responsibilities of property owners, property managers, and landlords are varied, exhaustive, and, in many cases, manual. Some of those responsibilities include: communicating with residents and tenants, managing lease applications, keeping track of on-time and delinquent rent payments, managing maintenance requests, and maintaining and updating accurate property listings.
There is some overlap between facility management and property management; the main difference comes from the purpose of managing the building as well as the tenants. While the goal of facility management is more focused on the productivity of tenants and maintenance of the building, property management is more about managing the property for the sake of residents and tenants and ultimately increasing the value of a property. Facility management is concerned with maintenance and inspections for tenants while property management has features pertaining to financial management. There is also some overlap between hotel property management software and real estate property management software—specifically in the realms of operational efficiency, room resource allocation, and overall facility management capabilities.
Real estate property management software is designed to work for a variety of residential, industrial, and commercial property types and business sizes. Property management software enables the operational management of real estate portfolios, not the nurturing and development of real estate investments.
Key Benefits of Property Management Software
- Automate day-to-day tasks and daily business operations
- Improve tenant experience and communication
- Ensure property ledgers are accurate and up to date
Why Use Property Management Software?
Property management software is designed to efficiently and centrally manage the exhaustive list of responsibilities of property managers and owners. Property management software helps property managers and owners do away with their previously manual system of spreadsheets, email, and document filing. The software centralizes and unifies the tools necessary for an efficient and productive business.
Instead of relying on disparate, web-based, and paper-based tools, property managers and owners can depend on a single platform that offers seamless integration to supplemental third-party software.
Financial management — Property management software allows users to monitor the financial health of their properties. Property managers and owners use the software to simplify or automate their accounting and bookkeeping tasks as well as prepare property portfolio reports for investment activities.
Facility management — Managing real estate properties, regardless of property type, requires the property owner to effectively oversee every aspect of their facilities. Property management software ensures that property owners are enabled to keep track of all maintenance requests from tenants. The software also ensures that property owners pay vendors on time as well as set up recurring work orders.
Reporting — An effective property management tool helps users maintain accurate and compliant property records, understand and predict occupancy rates, better conduct tenant screenings, and streamline the leasing process.
Tenant or resident communication — Tenant and owner portals of property management software improves communication between both parties. This simplifies rent collection and helps in better tracking. Tenants can easily submit maintenance requests through the software. Property owners can have a more unified overview of potential and existing tenants, which results in the added benefit of resident loyalty and reputation management.
Who Uses Property Management Software?
Property management software impacts back office activities, but its tenant-facing features are wielded by both tenants and service contractors. While property management software is distinct from real estate investment management software, real estate asset managers leverage property management software for reporting.
Property managers and owners — Property owners of any type of rental utilize property management software to optimize their tasks and activities. Whether they manage short-term or long-term rentals, apartments, student housing, condominiums, single-family housing, commercial spaces, or gated communities—all these properties will benefit from software that automates or streamlines operations.
Tenants — Tenants leverage property management software via a tenant portal when submitting maintenance requests, receiving notifications about building updates or incoming packages, and communicating with property managers.
Asset managers — Real estate asset managers who are involved on the property level of investment portfolio management leverage property management software to enhance the financial performance of income-producing properties.
Kinds of Property Management Software
Aside from cloud-based and on-premises versions of property management software, these tools are also differentiated according to property type. Although all-in-one or end-to-end property management solutions exist and fulfill the business needs of some real estate businesses, users need to align their chosen software to their property type. Commercial and residential real estate are the two types of real estate, based on which users need to choose the right property management software suited to their requirements.
Commercial — Commercial real estate is real estate property that is used for business activities that generate income. Some examples of commercial properties include office buildings, medical buildings, sports facilities, hotels, restaurants, and retail stores. Industrial real estate falls within commercial real estate and can include warehouses, laboratories, and distribution centers.
Residential — Residential real estate is real estate property that is used to house tenants, either for rent or for home ownership. Some examples of residential properties include student housing, single-family homes (homes built on a single lot), condominiums (a community or large building comprised of multiple single units), townhomes (a condominium or single-family home hybrid), cooperative (community-owned building that comprises individual units), and multifamily homes (a single-family home that has been split up into multiple units).
Property Management Software Features
There are a wide range of features traditionally offered by property management solutions. Property management software fulfills the business needs of a variety of property types and real estate business sizes, hence, the features may vary. Common property management software features include a mix of the following:
Accounting — Property management software offers built-in accounting functionality or streamlined integrations with third-party accounting solutions to enable the financial monitoring and management of properties.
Rental payment — The software provides rental collection and processing functionality as a built-in feature or designed to integrate with specific third-party rental payment solutions.
Lease management — Lease management features of property management software provides customizable lease templates or a workflow to streamline the lease contract management workflow. It enables the creation, duplication, and storing of rental applications.
Maintenance management — Property management software allows the management of maintenance and service requests, the scheduling of service contractors and providers, and communication between tenants and property owner about upcoming maintenance activities.
Rental listing — This type of software provides built-in rental listing management, integrations with multiple listing services (MLS) or real estate websites, or both to advertise vacancies or upcoming available units.
Tenant portal — Property management software provides a portal for tenants to communicate with property managers, pay rent, and submit service requests.
Additional Property Management Software Features
Tenant screening — This feature facilitates the screening of prospective tenants, either before or after the submission of lease or rental applications. It may also provide a contact database for existing tenant or prospective real estate leads.
Space management — Space management feature streamlines resource allocation, monitors and reports of space and material utilization, and enables the better management of physical properties.
Insurance management — The software provides features to simplify compliance with and access to relevant real estate insurance policies.
Other Features of Property Management Software: Commercial Capabilities, Industrial / Retail / Mixed-Use Capabilities, Multifamily Capabilities, Residential Capabilities
Potential Issues with Property Management Software
Property type — While some property management software vendors are very clear on the type of property they support, proper research is still important. Without due diligence, for example, a residential property manager can purchase a property management solution that’s better designed for commercial properties. Buyers of the software must pay close attention to the property type that the solution can support, so they don’t spend time investing in a platform that may not fit their needs.
Scale and scope — A property manager who is in charge of a handful of properties will have different requirements and budgets than a property manager who is in charge of multiple units in multiple buildings. Some property management solutions are designed to scale with the portfolio while some are not. In such situations, some vendors provide customer support while others may not. Buyers must determine what aspects of property management is important, to avoid purchasing a solution that is either too comprehensive or too limiting, in terms of property growth.
Property management experience — Property managers are just as wide-ranging as property owners. Brand new property managers who are in charge of a single property don’t necessarily have the same pain points as more experienced property managers who have nurtured their property portfolio and must navigate a variety of local compliances and regulations. Property management software can either address a single pain point or provide users with an expansive, end-to-end solution.
Software and Services Related to Property Management Software
Most property management systems can handle the basic business needs of property management companies. The basic features include built-in accounting and reporting capabilities. Extra functionality on top of those basic features include advanced tenant screening, insurance compliance, and property marketing, for example. If a real estate property management software doesn’t offer built-in accounting and lease contract management functionality, then it is designed to integrate well with third-party solutions with those functionalities.
The following solutions can be integrated with or used in conjunction with property management systems:
Lease administration — Lease administration software offers advanced lease management functionality to property managers who do not have a comprehensive lease management system. Lease administration software simplifies the leasing workflow, from creating to sharing to storing.
Rental payment — While some property management solutions do offer bundled-in rent processing functionality, rental payment software exists to close the gap between managing properties and collecting rent from tenants.
Multiple listing service (MLS) — Multiple listing service (MLS) software enables real estate agents to list vacant or to-be-vacant properties on behalf of property owners and managers. Properties listed on MLS streamline the advertising of available properties to prospective buyers, because they can be filtered by specific requirements.
Real estate marketing — Similar to MLS software, real estate marketing software enables the marketing of available properties. Property owners as well as real estate agents leverage customizable and branded real estate marketing collateral to generate leads and gain the attention of buyers and renters.
Vacation rental — Vacation rental software is similar to property management software but tailored to the nuances of the hospitality sector. Owners of vacation rentals have different requirements than owners of apartment buildings, condominiums, offices, and single-family homes. Vacation rental software provides functionality like booking engines, check-in and check-out workflows, and daily cleaning services.
Real estate investment management — Investors and stakeholders leverage real estate investment management software to forecast, report on, and manage the return on investment (ROI) of real estate property portfolios. Real estate investment management software bundles together the monitoring and nurturing of property assets specifically to maximize property value.
Facility management — Owners of plants, warehouses, and infrastructure and manufacturing buildings turn to facility management software instead of property management software. While property management software optimizes the financial management and tenant relationship of both commercial and residential buildings, facility management software is more comprehensive. Facility management software includes health and safety management, materials and resources management, and large-scale maintenance and inspections management.
