Complete Breakdown of Property Management Software Pricing Models
February 24, 2022
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Breaking Down The Property Management Software Pricing Models
Whenever we’re buying something, cost is always one of the deciding factors.
Property management software is no different.
However, to understand the cost of different platforms, we need to understand the pricing models.
The various pricing models can be confusing if you don’t know what to look for and how each structure works.
Unit-based pricing, monthly subscriptions, feature-based pricing, tiered pricing, onboarding and setup, freemium, free, and private quotes (or some combination of these) are what you’ll need to get familiar with.
This pricing structure centers on how many units you own or manage. Software programs that use this structure charge you on a unit-by-unit basis, or when you reach certain thresholds (e.g., 10 units, 25 units, 50 units, and so on). This kind of pricing becomes more significant the larger you grow your business, with each threshold or unit bringing on more costs.
Unit-based pricing usually works best for property managers with a lot of units. Volume discounts are often available when exceeding a certain number of units.
It’s important to note that this kind of software often involves other forms of pricing as well. Examples of companies that use this pricing structure are Palace, Yardi Breeze, and Appfolio.
This is the most common pricing model in the property management software space. If you choose a tool with a monthly subscription, you pay a monthly fee to access the platform. Most of the time, these monthly fees can come in different plans, with more expensive versions allowing you to use more features on the platform. An example of a company using this pricing structure is Cozy.
Rentredi, however, is an example of a platform that charges a flat monthly fee regardless of how many units you rent. This is a less common pricing model, but one that you will see in rare instances.
Some property management software providers bill quarterly or yearly instead of monthly. A few of these may offer a slight discount if you pay and commit to an entire year upfront.
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.
Property management software that adheres to this pricing model usually has three to four tiers that come with increased access to features as you move up tiers. For example, tier one may only allow access to managing units, reports, tenant screening, and advertising. Then, if you pay a higher price, tier two may add e-signatures and inspections. And then tier three and four will continue to build off that.
Propertyware is an example of a company that uses this pricing structure. They have three pricing tiers that each allow more access than the last.
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 added 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 a dedicated 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.
This pricing structure is widely used by online software companies and 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 of different ways. The first is through a free trial, in which you gain full access to the platform for a limited number of days before payment is required. Rentroom is an example of a tool that uses this method.
The other setup is through a feature-light version of the platform. In this layout, you can access basic functions like adding a property or tenant for free, but you cannot use the software in its full capacity without paying. Two companies that use this type of pricing structure are TenantCloud and Avail.
One of the least common pricing structures—but by far the best for your bottom line—is the free model. With this model, 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 free property management software for as long as you want it.
How does the provider 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.
This is a rare pricing model wherein the provider of the software doesn’t have any pricing online. You must call and take part in an interview to assess why you need the software. The provider will customize the plan to fit your needs and price the software accordingly.
This pricing structure doesn’t offer a free trial. But it does seem to leave the door open for some negotiation while on the phone call. A company called MRI Software uses this pricing model.
In your search for the best tool, you will most likely come across a number of these pricing structures. The better you understand each of them, the easier your search will be.
Also, it’s important to remember that many providers use some combination of these pricing models. This is why it’s important to conduct thorough research before you decide on a property management software tool.
At the end of the day, you want to get the best platform for the lowest price. It helps significantly to understand the various pricing models and how they work.