Choosing The Right Property Management Software For Your Business
With the right feature set, property management software can save you a lot of time and money.
It can also make your tenants happier, too, helping you retain better renters.
But in order to realize these benefits, the property management software you choose must have the right feature set for your business.
Let’s look at the core features you need, some nice-to-have features, and how to use pricing and reviews to guide your search.
Core Features
Most landlords look for five core features in a property management software:
- Online rent collection
- Tenant screening
- Document management
- Maintenance management
- Tenant communication
Your list may vary, depending on your property portfolio and the way you’ve structured your business, but the list above is a good starting place. Let’s drill down into each of these features.
Rent Collection
Rent collection is the most popular feature that property management software offers. And in many ways, it’s the most effective.
Whether your properties are in-town or hundreds of miles away, receiving rent digitally makes rent collection far easier. A National Apartment Association (NAA) study found property managers and landlords who adopt online payments spend 65% less time processing payments.
Imagine getting 39 minutes back for every hour you spend processing payment. No more running checks to the bank, chasing late fees, collecting from tenants, and so on. That’s a huge time savings and it makes an immediate and direct impact on your business.
But time saved is only part of the benefit. Electronic rent payment also makes your tenants happier. According to tenants surveyed by Innago, 79% of tenants prefer to pay rent online. With the #2 reason tenants move out being a desire for better management, offering online payments is an easy and highly visible improvement.
When you’re evaluating property management software, look at how easy it is for your tenants to pay. Your tenants might not be tech savvy, so the solution you adopt better be easy to use, or they won’t use it.
Auto pay is one of the best features that you can offer your tenants. The advantage to you is that the rent money comes in on time, every time. And it’s great for your tenants because they don’t have to remember to drop off a check. They just set up auto pay and forget it.
Software also makes late fee collection easier. Almost every landlord has experienced trouble collecting a late fee. The tenant is late past the grace period, so you can tell them they now owe you the rent payment plus a late fee. Inevitably, they drop off a check the next day, and it’s just for the rent—no late fee.
Most landlords choose not to pursue missing late fees, and that can raise problems down the road. First, you’ve just taught your tenant that you’re going to give them a reminder call when they’re rent is late. Second, they’ve learned that they don’t really have to pay your late fee. And finally, you’ve taught them that your threats are empty.
With property management software, late payments can be automatically assessed and enforced.
Just make sure the software you choose offers flexibility to be set up however your late fees are structured. Ask how it enforces those late fees, too. Does it send reminders to the tenants? Does it allow them to pay the next month’s rent before they’ve paid the previous month and all late fees?
PRO TIP: Tenants should have to pay all of their rent and all the late fees before they can pay the next month’s rent.
Tenant Screening
Tenant screening is another critical feature of property management software. If you don’t screen prospective tenants correctly, you could end up with tenants you have to evict. And that means having to pay for legal fees and other eviction expenses—pretty much guaranteeing you won’t be profitable that month.
Screening is your first line of defense against bad tenants. In 2019, 16% of landlords said screening was a top priority. With the pandemic and eviction moratorium of 2020, that number tripled; screening became a top priority for 45% of landlords.
PRO TIP: When evaluating a software’s screening process, first look at how easy it will be for your tenants to access the application. If they can’t get to it easily, they won’t use it.
Also check to see if the software is customizable. You may want to customize it if the default property type is different than yours. For example, tenant screening is much different if your properties are just down the street from you than if they’re hundreds of miles away.
Finally, make sure the screening software you choose can ask the kinds of questions you need it to ask—both for your prospective tenant and for yourself. For example, if you allow pets, you may want to know the breed and weight. You may want multiple references. Make sure the software can handle this level of customization.
Document Management
The next big feature to look for in property management software is the ability to manage and sign documents digitally. Digital document signing and management can save you thousands of hours—completing in minutes what takes you days to do manually.
Digital document management is more than just getting leases and other paperwork signed faster. It also allows you to get leases finalized days quicker, increasing your leasing velocity. That means fewer showings and greater savings on your costs and time.
A 2020 study by LunarPen found that electronic signatures (eSignatures) reduce document turnaround time by 80%. If you’re doing more than a few leases per year, that’s a huge time savings for you.
Tenants like the convenience of eSignatures, too. In the Innago survey, 50% of tenants said they prefer to sign leases online.
Make sure the property management software you adopt can tailor eSignatures specifically to your leases and other rental-specific documents—pet addendums, parking agreements, storage rental, and so on.
Look for the ability to create reusable templates. Does the software automatically duplicate key information, like lease start dates and end dates, and insert that information into all the appropriate places in the document? Does it have a template creator that will assist you?
Weigh it from the tenant side, too. Does it prompt tenants to insert information into the right blanks? How easy is it for your least tech-savvy tenants to use? Ideally, they should get an email, click a button, and put in their signature.
PRO TIP: Make sure the software meets all your document needs. Some platforms only handle leases, while others handle a variety of forms and agreements.
Maintenance Management
You’re going to get maintenance requests; that’s just part of being a landlord or a property manager. The question to ask when shopping for property management software is this: How can this software make maintenance requests easier—for me and my tenants?
We found that, on average, landlords get six maintenance tickets per year. That’s six chances to either impress or disappoint a tenant who needs something fixed.
Our survey also found that 46% of landlords use a third party to perform maintenance. So not only does the software need to make it easy for your tenants to submit a ticket, but it should also make it easy for you to assess the request and assign it to the appropriate vendor—plumber, electrician, locksmith, and so on.
Questions to consider when looking at a software product’s maintenance management capabilities:
- How easy is it for a tenant to submit a ticket?
- Can they submit a ticket with their mobile device?
- How will you be notified?
- Can you have multiple users—maintenance staff, property manager, leasing manager, etc.?
- How does a maintenance provider get notified about a ticket?
Extra Features
Beyond the must-have features we just looked at, there are a few nice-to-have features that can make a positive impact on your bottom line.
Renter’s Insurance
An increasing number of landlords understand the importance of renter’s insurance for shielding them from potential liability.
For example, if your tenants damage your property, it may be covered by their renter’s insurance. This saves you an insurance deductible and keeps your premiums down.
But tracking who has renter’s insurance and if it’s up to date can be a hassle. The good news? Some property management software platforms can track when an insurance policy took effect, if it’s still in effect, and what’s covered.
Again, make sure it’s easy for your tenants to use. Uploading a copy of an existing policy should be straightforward. If they don’t have an existing policy, it should be easy for them to purchase one. Many platforms offer the ability for tenants to purchase insurance within the application itself.
Responsive Support
We’ve all had the experience of calling a company and either reaching an automated answering system or winding through a lengthy option menu—only to reach a customer service rep who couldn’t help.
You may not consider customer support a feature of your property management software, but it can be. Good support is worth its weight in gold. It’s especially critical when it involves the operation of your business.
PRO TIP: Look for property management software that offers you a dedicated account representative, live chat, or help center at no additional charge. These tools pay off big in terms of tenant satisfaction and loyalty.
Mobile App
Mobile apps offer you and your tenants greater flexibility when it comes to common property management tasks.
From your smartphone or tablet, you can send leases, screen applicants, collect rent, and communicate with tenants. Meanwhile, your tenants can more easily communicate with you, submit maintenance requests, and pay rent—all from their mobile device.
An easy-to-use mobile app with all the core features built in makes life easier for you and your tenants.
Rental Advertising
Getting your properties filled quickly is vital to your profit margins. Minimizing vacancy time requires getting as many high-quality applicants as possible. This is typically done by leveraging a variety of listing sites, so your listing has the greatest chance of being seen by an interested applicant.
Unfortunately, adding these listings to each platform is a time-intensive process. This is where listing syndication can help.
By using listing syndication, you can create a single listing within your property management software that can be exported to all major listing sites at once. This allows you to maximize your exposure while saving you hours of manual effort.
Multiple Users
One of the most undervalued features of property management software is the ability to add multiple users and define them by customized roles—property managers, maintenance personnel, accountants, leasing agents, and others.
If the property management software allows you to define multiple users, you can add your entire team and give them access only to the features and areas they need to use to do their job. It’s another way you can stay organized and keep your employees focused on their daily tasks.
Pricing
Now that you have an idea of the must-have features and nice bonuses, you hopefully have a more complete picture of what your ideal property management software platform looks like.
The next question is, how much will it cost you?
There are a variety of pricing models for property management solutions. It’s important to become familiar with these pricing structures so you can choose the best property management software for your needs—without any surprise costs.
Unit-Based Pricing
This structure is based on how many units you own or manage. Software programs using this structure will charge you on a unit-by-unit basis, or when you reach certain thresholds (10 units, 25 units, 50 units, and so on). This type of pricing becomes more significant the larger you grow your business, with each threshold or unit bringing on more costs. Examples of companies that use this pricing structure are Yardi Breeze and Appfolio.
Monthly Subscription
This is the most common pricing layout across all software companies and is seen frequently in the property management software space, as well. In this structure, you are paying a monthly fee to access the platform. These monthly fees can come in different plans, which typically allow you to use more features on the platform. An example of a company utilizing this pricing structure is Buildium.
Feature-Based Pricing
In the property management software niche, this is by far the most widely used pricing plan. This type of pricing setup requires you to pay for specific features you want to use. These features can range from online rent collection, tenant screening, lease signing, customer service, listing syndication, and other critical features. This pricing structure can be a monthly fee, an annual fee, or a one-time fee.
Unfortunately for landlords, this pricing structure is also primarily used by companies with multiple pricing models. This means that when you see this pricing structure, you are most likely going to have to pay multiple ways. Companies that use this type of pricing plan include Buildium, Appfolio, Yardi Breeze, Tenant Cloud, and Avail.
Onboarding & Setup
Another popular cost option you may come across is paid onboarding and setup. In this payment structure, you pay a one-time fee to get access to the platform and additional onboarding help.
Getting setup with property management software can be time consuming. If you aren’t tech savvy, have several units with leases that need to be uploaded, or simply value having your own account representative to help you get started, you should expect to pay these fees. A few companies that have onboarding and setup fees are Buildium, Appfolio, and TenantCloud.
Freemium
This pricing structure is also widely used by online software companies and is no different for property management software companies. It’s an easy way for companies to give new users a taste of what the platform is like before making them pay.
This structure can be presented in a couple different ways. The first is through a free trial, where you will get full access to the platform for a limited number of days, before being asked to pay. The other setup is through a feature-light version of the platform. In this layout, you can do basic functions like add a property or tenant for free, but not use the software in its full capacity without paying. Two companies that use this type of pricing structure are TenantCloud and Avail.
Free
One of the least common pricing structures—but by far the best for your bottom line—is the free model. In this structure, you get complete access to the software without having to pay any monthly subscriptions, setup fees, unit fees, feature based fees, or onboarding and setup fees. You get unlimited access to the software for as long as you want it.
How do they make money? In this structure, you will commonly see minimal fees spread out to tenants. These fees may include the cost of running a screening report when they apply for a rental or small convenience fees for purchasing renter’s insurance or paying rent online each month. These fees are insignificant on an individual level, but when added up across thousands of tenants, they provide a great stream of revenue for the software provider.
Reviews
When you are thinking about buying any kind of big-ticket item, one of the first things you do is look at the reviews, right? Shopping for property management software is no different.
Obviously, the more reviews, the better. A few glowing reviews of a product could just be the employees of the company trying to up the ratings. But when a product has one-hundred-plus of 5-star reviews, that’s a good indicator of a solid product.
But beyond the number of reviews, there are a few other considerations to keep in mind.
Review Quality
It’s easy to look at rating scores and say, “That product has a 4.5, this has a 4.9, and that other one has a 3.0. Clearly, the 4.9 is the best.”
The thing to keep in mind is not just the score in a vacuum, but how the score compares to the rest of the industry. If most platforms score 4.5 or above and one scores 4.3, it may be a lot worse than the others, even though a .2 drop might not seem that bad.
Another thing to look at in terms of review quality is what reviewers said. A product that might have gotten a 4.5 rating might be dragged down to 4.3 by a single 1.0 rating that was left for reasons unrelated to the quality of the app.
Recent Reviews
It’s also important to look at recent reviews. A five-star review from 10 years ago is not the same as a five-star review from today. If the software has been around for many years, it may have gotten better or worse over time—which the overall rating might not reflect.
As mentioned above, somebody may have left a review a couple years ago about a serious bug that was fixed soon after. Do some research, check out the product website, and reach out to that platform to see if that’s still a bug or if it’s been fixed.
Diversity
The final item is review diversity. In other words, look at a few different review sites. Is the property management software you’re considering rated 5.0 on one site and 3.0 on another? If so, which site is the most trustworthy?
The three big software review sites are Capterra, TrustPilot, and G2. These sites are trusted by thousands of users. One reason Capterra and G2 are highly regarded is that they are two of the hardest review platforms on which to have a review published. They require reviewers to connect their LinkedIn or Gmail accounts and provide proof that they’re actually using the software they’ve reviewed.
TrustPilot makes it a little easier to get reviews published, but it’s the site Google relies on more than any other. Whichever direction Google goes, most people follow.
There are many other sites, but you should at least include those three in your research. The point is to look at multiple, trusted review sites and see how the reviews stack up for the property management software you’re considering.
Summing Up
Property management software can make life much easier for you, your staff, and your tenants. It can cut days off the time you spend doing tedious tenant-related tasks and improve your bottom line.
The trick is choosing the property management software that best fits your business. Figure out the most beneficial features for your business, find the pricing structure that works best for you, and once you have a short list of platforms, check out their reviews.
The time you spend selecting a property management platform will pay off huge once you have the right software working for you.
