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If you currently run a property management operation, whether it is business or residential management, you are likely looking for a way to streamline your business. This streamlining effort will benefit both you and your renters. Utilizing property management software has benefits and pitfalls that all potential investors should fully consider before making a purchase. Although the basic formula for determining the value of an investment involves weighing costs against time and money saved, there may be certain aspects of property management software that you fail to consider. Comprehensive research can save you time and money and ensure that you make the right decision for your property management business.
Benefits
Inventory Management
Whether you’re dealing with commercial, industrial or residential properties, managing an inventory of available units is one of the primary responsibilities of any property manager. Without accurate inventory information, a property manager has no idea what properties are available for immediate use, which ones are already leased, and which ones may be available for occupation in the near future. As the number of units under the manager’s control grows, so does the amount of paperwork necessary to keep track of such information. This in turn increases the chances for losing necessary information at a critical moment.
Rather than face possible lost revenue due to information overload, a property management software package can place the information a manager needs in an easy to access location. With a few keystrokes, every unit’s details can be made available. As long as the information is kept up to date, even large inventories of units are easily dealt with, reducing information overload possibilities significantly.
Accounts Management
Accounts management is as important as inventory management to a property manager. Payment days may differ from unit to unit, along with payment plans. Each payment represents revenue for the property company, and any payments allowed to fall into disarray means a loss in profits. The greater the number of accounts under management, the more necessary property management software is that will keep track of payment terms and status. With proper tracking, the manager can better anticipate payment times and ensure on-time payments, maximizing revenue.
After Hours Access
While office hours may be from nine to five, according to Apartment Internet Marketing, 46% of apartment seekers make inquiries into availability after normal office hours. Keeping an office staffed 24 hours a day is an expensive and possibly dangerous proposition. However, for the rare exceptions when a property manager needs to meet after normal hours, having property information available in software form saves the need for early evening office visits to locate data on unit availability.
Financial Software Integration
Property management software isn’t usually a standalone product. Most software packages feature full integration capabilities with accounting software packages. This integration allows the exportation of property financial information into accounting software for presentation in acceptable accounting formats. With full integration, the two software packages can present profit and loss statements, cash flow statements and accounts receivables reports, among others, all in a format that anyone familiar with common business reports can understand.
Pitfalls
If you own multiple rental properties, you may be wondering if property management software is right for you. These programs make it possible to view financial statistics and the status for each of your properties individually or as a whole. However, there are some pitfalls to consider before you make your purchase.
Cost
While there are some free property management software programs available, these are often subpar and are only good for very basic needs. If you need detailed reports for your properties, you will have to upgrade to a more expensive program. For example, if you need records of repair and maintenance costs for each of your properties, a free program likely won’t work.
Complexity
Many property management software programs require you to enter specifics for each property, adding considerable time to get setup. You have to enter all of the specifics for each property. Additionally, because most of these products have numerous reporting options, you will have to determine exactly what reports you need to successfully manage your rental properties.
Limitations
Many inexpensive and moderately priced programs are meant for very small rental companies. If you have more than 100 units, these programs aren’t likely going to work for your needs, and you will have to upgrade to one of the expensive programs offered. Some programs also limit the number of items you can report per unit, so if you charge weekly rent or need a separate entry for each expense for each property, you may need one of the higher-priced options. For example, assume a program limits you to 10 items monthly per property and you charge weekly rent. During a month with five rent collections, you would only have five remaining entries. That means if each had a late fee, you couldn’t record anything else, such as plumbing expenses or landscaping maintenance.
Availability
Very few inexpensive property management software packages offer mobile applications. Because of this, you will likely only be able to access the program on one computer unless you have a network of computers. This may be a problem if you are out of town or not at your desk when you need some information about one of your properties.
Pricing
The Census Bureau reports that there are over 15,000,000 rental properties in the United States. Managing all of those units can quickly become an overwhelming task. The investment made in property management software is frequently offset by more effective recordkeeping, more control over property statuses, and speedier rental payments. The price of this software depends on the features purchased, the number of units managed, and the installation type.
Online Software
Online software is generally inexpensive, but it requires a reliable Internet connection. Monthly payments for Internet-based property management applications cost from $20 to $2,000 per month. The expense is often based on the number of units managed.
Licensed Software
Property managers who do not need to access property records on the go may prefer licensed management software. These packages cost $100 to $1,000 per computer installation, with additional fees for upgrades, extensions, or customizations. Software solutions that integrate accounting, maintenance, real estate, and administration options tend to be more expensive than separate, stand-alone packages.
Conclusion
Without a doubt, the biggest benefit of property management software is the ability to increase the workload of your operation without hiring full-time staff. If you are currently understaffed or unable to add employees to your payroll, using software can solve all your problems. With every new investment, however, comes a learning curve and start-up investment. Luckily, just as every business has a different size needs, project management software can expand and contract to meet that size and those needs. Any worries about ease of use and the return on investment can be eased by taking advantage of free trials and software that include a satisfaction guarantee.
Are you looking for quality rental property management software? Property management software can help in a number of areas, from expenses and rent collection, to quick access to resident's records, maintenance scheduling, to keeping track of employees. The right software depends a lot on the type of property you are managing. You can find software that offers solutions for any property or software designed specifically for commercial, apartments, or neighborhood property management.
There are many options and you will want to keep a few things in mind as you are making your decision. Of course cost is always a major factor. Other things to think about include usability; will everyone who needs access be able to understand the program quickly and easily without mistakes? Is the software compatible with other programs you may use on your property? And what type of solution do you want? Outside of software which may be designed for a specific type of property, think about which features you will use and which you may be able to do without.
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