Running a successful property management operation is no small feat. Any number of business challenges keep property managers awake at night. How to fill vacancies? What can be done to ensure timely, full rent collection? Will property repairs, acquisitions, or improvements justify the return? To complicate things just a bit further, owners and investors want to know the answers too! After all, they know they have options. Savvy property management companies are increasingly utilizing robust software solutions to gain a competitive edge.
This guide offers information on the following topics:
Property management software helps manage tracks income and expenses involved in managing properties, such as collecting rent and proper maintenance.
What types of business challenges do property management software options address? Another way to ask that might be: What types of challenges do you have? The reality is that where there exists a need, the software market has responded with sophisticated, software-based solutions. There are property management solutions that address back-end accounting, payment processing, investment management, tenant tracking, work orders, complex reporting, and beyond.
Let’s take a closer look at some of the most important capabilities provided in property management software programs:
|Accounting||Handles check writing, management of receivables and collections, bank reconciliations, top-level financial reporting, and fixed asset depreciation.|
|Rent collection||A more industry-specific accounts receivable module that allows access to payment portals and the ability to establish electronic (ACH) payments. Options can also keep track of which payments cover fees and security deposits more manageable.|
|Tenant management||Provides a central repository for tracking tenant information and optimizing the relationship. Allows the storage of data such as contact info, payment and service history, renewals, rent increase schedules, and beyond. Tenant screening functionalities can also be available to analyze credit data and criminal histories.|
|Work order management||Manage service work, preventative maintenance, and unit prep work. Helps coordinate work performed with internal staff, in addition to work subcontracted to outside vendors. Scheduling features optimize availability of labor and equipment to make sure work is being performed as efficiently as possible.|
|Property tracking||Track property assets and value, vacancies, tenant histories, property descriptions, previous improvements, and work, as well as ownership and investment information.|
|Investment management||Track and report on ownership and investment data. Track investments, handle disbursements, and even identify new investors. Online owner portals provide owners a snapshot view of their investment data.|
|Prospect tracking||Allow automation of much of the work related to finding new tenants including databasing contact info, posting vacancy ads, scheduling showings, and coordinating with interested potential tenants. Can be thought of as an industry-specific CRM software module.|
Robust property management solutions are becoming increasingly more accessible. Many features, which just a few years ago were reserved for only the most sophisticated, enterprise solutions, are now available to property management businesses of all sizes and software budgets. Software providers are leveraging many of the following tools to help property managers run their business more efficiently:
Property management companies come in all shapes and sizes of course. That’s a big part of the reason there is no one single answer to which property management software is the best. If you’re managing a large portfolio of industrial or office-oriented commercial space, your needs are different than if you manage a small set of single-family residences. Still, there are many common challenges. No matter your needs, software solutions are being designed to reinforce operating best practices and help your company become more profitable.
AppFolio (pictured above) is a solution for small to mid-size property management firms. They pride themselves on being more affordable and completely web-based. They allow the management companies to create professional looking websites that can easily post details and photos of vacant units, let tenants pay bills online, and submit maintenance requests. The solution requires a minimum of 50 units for implementation and pricing starts at $1.25/unit/month.
Buildium is a solution designed by property managers. It is a complete solution that handles property accounting, company financials, reporting, as well as handling online payments and both a tenant portal and an owner portal. The solution is recommended for businesses with 100-5000 units and pricing starts at $150/month.
Using QuickBooks as a property management tool is possible for a property manager handling small to midsize properties. Desktop versions of Quickbooks allow you to set up company and customer files as various properties. This will allow you to handle tasks such as collecting rent from tenants and paying property owners and management companies, on top of any fees involved in property maintenance.
The above video demonstrates just how you can set up your Quickbooks Desktop to manage buildings and units within them.
If the property management business is comprised of several large properties or multiple complexes, it is advised you look into a more advanced system. A professional property manager could be better off finding a trust accounting system. Once rent is received from the tenants, it needs to be disbursed to the property owners. This money should be kept in its own account and separate from any account that is used to pay expenses. Any money also received from the owners for the work you’ve done (your management fee) should be put into your own account. QuickBooks lacks this type of account management and is why it can be difficult to manage multiple properties using QuickBooks.