What to consider when buying property management software

In this article, multifamily professionals will learn what to consider when researching and buying property management software for their technology stack.

In the evolving world of multifamily, it is crucial to assess and adapt your portfolio’s strategy to stay ahead of the competition. With endless tasks to juggle, property managers require a thoroughly optimized system. In a manual workflow, staff members handle everything from payment processing to maintenance requests and financial reporting. But in today’s digital landscape, each of these tasks can be streamlined using the right software. These digital products offer a more productive operations flow while lifting strain off of your team.

Let’s dive into what property management software is, and how to consider which products best suit your portfolio’s needs.

What is property management software?

When you hear the term “property management software”, some products may already come to mind. In this section, we explain the structure of a PropTech (property technology) stack, and how to differentiate types of software.

First, what is PropTech? PropTech, or property technology, is an umbrella term referring to any software solution created for the real estate market. Your PropTech stack is a curated collection of these solutions that you handpick to enable, streamline, or improve your workflow. There are a few different elements to a stack, but we can fundamentally divide the structure into two working parts: core accounting software, and add-on property management software.

We can distinguish between accounting and add-on property management software as follows:

• Accounting software is the foundational tool upon which your PropTech stack is built. This software is used to manage and oversee your portfolio’s financials. The application has budgeting features that allows property managers to oversee cash flow, monitor income, and track expenses. Your portfolio is likely already familiar with accounting software if you are partnered with a product from companies like Rent Manager, Yardi, or MRI. Any additional digital products you introduce into your tech stack should integrate seamlessly with this core software.
• Property management software are the digital solutions added onto your tech stack that are meant to help enable, streamline, or optimize operations beyond the functionality of your accounting software. These products address specific pain points in your workflow such as limited team bandwidth or costly paper payment processing.

How do property management companies build their tech stack?

Property management companies (PMCs) assemble their technology stack in a variety of ways to fit the needs of their business. In the multifamily industry, the top three tech stack options are proprietary, all-in-one, and best-in-class solutions.

We can sum up the three types of PropTech stacks as follows:

• Proprietary software: Custom built apartment rental software.
  Proprietary software refers to fully custom-built software for your business from payments to maintenance requests and everything in between. This option appeals to large companies that require their own, fully customized tech ecosystem to manage their operations. Companies require a substantial level of resources and finances to build and maintain this software, including a fully operational team to monitor the technology, work through bugs, and provide training and support.
• All-in-one: One single platform with multiple applications.
  All-in-one technology works as a Swiss Army knife of sorts by offering several services in one solution. This product can include tools for accounting, investing, marketing, leasing, and resident communications to name a few. While all-in-one software allows property operators to manage their portfolio inside one convenient platform, there are often limitations to the product’s features. This is because in trying to spread their offerings across many different areas, all-in-one providers tend to present more high-level rather than substantial solutions.
• Best-in-class: Specialized apartment rental software solutions integrated together.
  Best-in-class software refers to a tech stack composed of different products from select providers. Because property managers can choose which software to include in the stack, this solution is fully customized to fit the portfolio’s specific needs. Unlike all-in-one software, best-in-class is not one platform; rather, it’s a puzzle made up of different point solutions that come together to create a high-functioning system.

Learn more about property management software assembly from our guide on building the “best-in-class” PropTech stack. For a quick temperature check on which software build may be best for your business, here’s a table from that ebook.

Property management software 101

What is the use of property management software?

Beyond your accounting software, other digital products exist to solve pain points in your management flow. Property management companies are turning to PropTech to attract, engage, or retain their residents. Overall, software added onto your tech stack is meant to streamline important tasks that can be lifted off you and your team.

How can property management software support your business?

Imagine each point of your operations that can benefit from optimization, from the rental payment process to billing utilities to managing community requests. There is likely a digital solution available. These products can come in the form of portals, apps, and other electronic formats. A good digital product also collects data that equips you to make better decisions for your business.

Why is integration so important in your tech stack?

As we mentioned previously, one of the most important features of a digital solution is its seamless integration with your existing accounting software. But why is this so crucial? Your accounting software is where all your financial reports and data live. In order to best optimize your property’s processes, any new product you introduce to your tech stack should work collaboratively with the accounting software. Think of your tech stack similarly to assembling a bicycle. If your accounting software is akin to a bicycle’s frame, you will want to find pieces that fit that frame. If you build the bike without fitting those pieces to the foundation, you may be in for an unpleasant ride. Your accounting software is home to your business’s most vital pieces of core financial data. Building a tech stack to take advantage of that data is in your best interest.

What does property management software do?

Today’s multifamily market is home to a vast supply of digital solutions. Here are a few key property management operations that can be supported and streamlined by software:

• Rent collection: Digital products like portals and apps can help you automate the rent collection process. Solutions can involve helpful features such as automated rent reminders and multiple payment options to help minimize delinquencies. And with the entire process digitized, staff no longer need to manually process paper payments, saving property management companies valuable time and money.
• Maintenance requests: There is software available to assist onsite teams with managing maintenance requests. These products benefit residents by making it easy to submit and track work orders through a digital app. Communication features also give both residents and staff the ability to respond quickly, easing friction as the request moves down the pipeline.
• Resident communication: Speaking of resident communication, property management software can also boost responsiveness in that area. By providing a way to interact through digital channels, property management companies can improve resident engagement and minimize confusion or disputes.
• Events and resident engagement: In a similar vein, apps and software exist that enables property management companies to elevate their resident experience through community engagement. From announcing and executing events to involving residents in interactive activities and initiatives, apps and other digital channels can greatly improve resident satisfaction.
• Property operations: One of the biggest arguments for adopting property management software is to optimize operations. As a property manager, you and your onsite team handle a ton of data, reports, and manual tasks that can benefit from a solid digital solution. Building out a robust tech stack can help you pinpoint areas that human eyes might miss, boosting your bottom line and potentially minimizing gaps or mistakes in your process. And with the support of digital software, your team’s time may open up to tasks that require more of a human touch.

To sum up, property management software offers a variety of solutions to fill the gaps in your operations. A reliable tech stack does wonders to boost your portfolio’s productivity while making your property more competitive. With the purpose of digital solutions covered, we will now dive into what features you should consider when buying product management software.

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What to consider when buying property management software

What should you consider when buying property management software? Let’s explore the map of PropTech solutions, and the questions you should ask to ensure you’ve built the most optimized software suite.

Core system requirements

Pinpoint areas for improvement.

Where to begin when buying property management software? The first step is to look at your workflow. Note down areas you would like to see improvements. Pick your team’s brain on where they experience efficiency gaps. Once you’ve noted the current state of your system and its existing pain points, you can begin to research solutions for those specific areas. We recommend building your tech stack as a response to operational inefficiency, rather than shopping around for a solution. That way, you can better choose which software fills your needs.

Here are a few considerations that can start you on your journey to finding a solution:

• Lost revenue: Are your costly operations impacting your property’s profitability? We’ve found that areas such as processing paper checks drains thousands of dollars from your revenue over time. Identify places in your workflow where you can be recouping costs and search for a product that can support you.
• Lack of support: Are you satisfied with the level of support you receive from your current software teams? Sometimes, leveling up to a product with dedicated and helpful support can make all the difference. Implementing a great product is one thing, but knowing that there are contacts willing to help you when a system is down is a vital element in boosting efficiency.
• Team bandwidth: Constant strain on your team affects employee productivity and retention. Is your team bogged down by tedious day-to-day responsibilities? Most manual tasks can be automated these days using digital tools. If the main blocker in your operations flow is a lack of time, missed deadlines, or too little staff, consider starting there when researching property management software.
• Data-driven decision making: How accurate and up-to-date is your data? Are you leveraging insights to make strategic moves? Failing to inform your strategy with robust data insights can stunt your business and hinder profitability. If you’re looking for ways to collect data and insights, look for software that offers features in that area.
• Specific goals not met: You may be looking to improve your property’s success in one particular facet. Are your residents struggling with on-time utility payments? Do you hope to achieve 100% digital utilization? If you have a specific goal that’s not being met, chances are there’s a product to help you reach it.

Ensure the integration is seamless.

Before you lock in to any product, make sure you have a solid understanding of your current tech stack. What accounting tools are you presently using? Do you plan to stay with your accounting software, or switch in the near future? As you begin to research add-on solutions, you will want to pay attention to each product’s integration capabilities. If a product is not fully compatible with your existing software, you are likely to experience hiccups in functionality. This can be detrimental to your operations in the long run.

Implementation and Support

Opt for solid user training and support.

One of the most crucial things to consider when buying property management software is the reliability of the product’s support team. Your onsite staff will experience a learning curve when adopting any new software. Having dedicated product support to help your staff through onboarding and troubleshooting is vital in ensuring the longevity of the product in your tech stack. When looking into your product’s support team, there are a few questions you might want to consider. How accessible is support? What training resources are available; are there online tools such as chatbot support, an FAQ, or forums? What level of responsiveness would best help your team?

Keep resident support and user experience in mind.

Besides product support for you and your staff, you don’t want to forget about residents. In adopting software that is also community-facing, 24/7 product support is ideal. That way, you won’t experience a wave of questions and requests from your residents about a product that you yourself are learning. Before signing up for any digital software, check in about resident support capabilities. A 24/7 support option works best so that residents can inquire or troubleshoot when needed. With property management software handling sensitive and timely processes such as rental payments, urgent inquiries can be necessary.

Additionally, resident-facing products should be user friendly. An ideal property management app or portal makes your renters’ lives easier, and that includes an intuitive interface. How easy is navigating around the product from the resident side? Is the software known to be buggy, or has low ratings from resident users? Digital tools are meant to alleviate confusion, not contribute to it. Neglecting the resident perspective can actually set back your operations if you don’t do thorough research.

Business Growth and Finances

Think long-term by considering scalability.

If you aim to grow your business, you will want to ensure any software you implement can scale with your number of properties, units, or tasks. In this scenario, the best digital tool will be able to handle an expanding portfolio without losing efficiency or performance. Be sure to check in with the software representative about what portfolio sizes they work with, how seamlessly the product handles expansion, and whether the technology can accommodate your expectations for your business. A well-established digital product with many clients is likely to have more experience with expansion and scalability.

Take costs into account.

Understanding the costs associated with property management software is essential for property managers to make informed decisions in their operations. A crucial aspect to consider is the breakdown of these costs, including ACH fees, pass-through fees, or any other incurred charges. These expenses can significantly impact the overall pricing structure and should be thoroughly understood before committing to a software solution.

Additionally, property managers should recognize the value proposition and return on investment that such software can offer. By leveraging advanced tracking capabilities and data analytics provided by property management software, managers can gain valuable insights into their operations. This data empowers them to make more informed decisions, leading to potential cost savings and the implementation of better practices within their communities. Therefore, it’s imperative for property managers to carefully evaluate the costs and benefits associated with property management software to ensure they’re making the most strategic choices for their businesses.

Incorporating property management software into your workflow

Digital tools offer innovative solutions to your process that range from saving time to enhancing efficiency. What to consider when buying property management software depends on the specific needs and gaps in your business. Whether you’re looking to maximize NOI, streamline cumbersome operations, or save your staff time, building a reliable tech stack should be a priority in growing your portfolio.