8 Factors To Consider When Choosing The Best Rental Property Management Software
88 percent of residential property managers use cloud-based property management software, according to a survey by the National Association of Residential Property Managers.
Increased functionality, ease of use, and customizable features that come with many cloud-based software solutions may work for your managed properties, too.
Why should you use a targeted software system for your rental business? To save time and money by streamlining time-consuming tasks through automation and reporting.
Of course, you want the best property management software for landlords, but software that works for someone else may not have the functionality important to you. You need to decide what you want this new software to do for you now – and into the future – as your business grows.
The best property management software for one small landlord may not be best for a landlord with a large portfolio of over 200 units. Many software solutions offer both residential and commercial options. Whatever your needs, there are several main features that every property management software should include:
- Tenant Customer Relationship Management (CRM)
- Building Operations Management
Bruce Hogan, CEO at Software Pundit, mentions to look for “advanced features such as a website builder, lead scoring, and rent price optimization.”
With the basic property management software features identified, let’s look at are eight factors that can help you determine the best rental property management software solution for your business:
Rental Property Management Software Factors
- Read Property Management Software Reviews
- Efficient Rent Payment Processing
- Provides Accounting And Reporting
- Monitor The Big Stuff
- Ease Of User Interface
- Know All Costs And Fees
- Testing Is Everything
- Scope Out Customization Options
1. Read Property Management Software Reviews
Start your search by reading property management software reviews. Talk to other landlords or property managers to learn the pros and cons of the software they use. Ask questions and take notes for comparison. Most software is now delivered through website or cloud interfaces – no disk needed – so reading reviews can also help you identify any data security or downtime issues.
2. Efficient Rent Payment Processing
Is it easy for tenants to pay rent online? From C. Brian Davis’ – real estate investor and Co-Founder and Director of Education at Spark Rental –online rent collection payment processing is a huge differentiator. “The best services do this in one or, at most, two business days. Lackluster services take from three to five business days to process payments.” Cash flow is important. Check that the interface offers online rent payments and that it runs efficiently.
3. Provides Accounting And Reporting
Chane Steiner, CEO of Creditful, suggests that tracking building expenses and projecting future costs is a plus for any software solution. The same goes for repairs and tracking warranties. “You need to be able to get a cost forecast on upcoming expenses in order to create a better financial plan,” says Steiner. Similarly, “an ideal software would be able to deal with projecting taxes and helping to manage them.”
Aside from crediting tenant payments, does the software provide full accounting functionality for your business with easy-to-run reports for analysis and taxes? Make sure it does.
4. Monitor The Big Stuff
Properties, inventory, and assets should be regularly overseen to make running each property easier. “This also means tracking construction projects and vendor interactions,” states Steiner. “You’ll be dealing with plumbers, landscapers, professional cleaners, and security services, so you’ll want the best property management software for small landlords or larger portfolios.
These are all vendors – separate businesses providing services to you – and you need a way to manage them.”
Be certain that project management functions exist and work to your satisfaction.
We want software that my mom could use.
5. Ease Of User Interface
Do you have someone on your staff skilled with configuring this type of software? If not, research the ease of setting up the new software system into your business. Do you have a property manager to train on the new software? Work out any kinks in the system, especially if customizing the product, and be sure to train others. The training and customer service help desk should be readily available during normal business hours, at least, and able to easily explain software usage issues.
Simply Sold owner Caleb Lui flips and manages rental homes and just upgraded his rental software. From his experience, Lui looks for “a streamlined and intuitive user interface.” He feels that software is too often written by developers for developers. “We want software that my mom could use.”
While ease of use is important, Davis knows, “There’s a tricky balance between flexibility and simplicity.” The software platforms with lots of flexible features and options tend to be more challenging to use. Conversely, software platforms with fewer options are simpler to use. Your choice depends on your business requirements and the training provided by the software vendor. Ask some software training questions during your research and see if the responses are clear and understandable.
6. Know All Costs And Fees
Expect a base price along with additional fees based on the number of units. Standard features adjusted at your request or added for you above the base features will likely cost extra.
According to Hogan, “Property management software prices start at about $50 per month, but some companies charge a minimum monthly cost of $250. Extra charges may be [applied] for ingoing and outgoing payments, credit card transaction fees, tenant screening, and electronic leases.” Understand all the costs and fees of feature usage for each software option.
7. Testing Is Everything
Testing the complete software before purchasing is recommended in order to have confidence in getting the best rental property management software for you.
Is there a product demo you can try? “We want to be able to dip our toes and play around in the software environment before fully committing to it,” explains Liu. “The worst thing we could do is invest all of our time, money, and effort into an unproven system, only to find out that it doesn’t suit our needs.”
If you expect the software to work with mobile users, be sure to test the software from both desktop and mobile devices.
8. Scope Out Customization Options
For some landlords, a standard user interface works well and allows a quick software start-up. Other landlords have more specific needs and the standard software may need customization. Customization, states Liu, “shouldn’t be absolutely necessary to run your business, but act more like an optional tool to make your life a little bit easier down the road.” Custom features will considerably add to the cost, so get those figures up front.
Choosing The Right Property Management Software
There is a lot involved in choosing a property management software regardless of portfolio size. It can be overwhelming to review dozens of platforms, but before making that final decision, remember that adequate testing is the landlord’s friend. Choose a property management software system wisely, and you will be rewarded with better systems and time savings.