You will find it difficult to manage your properties the manual way once your real estate portfolio starts to grow. There will be need for you to invest in property management software to derive maximum success from your real estate investment business.
Property management is not just about collecting rents from the tenants. It requires a great deal of money management that includes maintaining details of tenants, financial records, preparing balance sheets involving income and expenditure details, and bookkeeping. You also need to ensure that all the reports are ready for annual taxation purpose in order to claim back tax refunds.
Property management software is designed to handle normal accounting and general balance sheet requirements. Because of their user-friendly and affordable nature, the software can be used by individual investors, professional property managers, and management companies undertaking a range of property management reporting functions.
Key Features of Property Management Software
Good property management software helps you to:
- Record your key property details like property condition, room sizes, home furnishings
- Store images of all rooms and aspects of the property
- Store property purchase and landlord details
- Automatically generate landlord property management agreements
Some property management software come with unique facilities like pop-up reminders to remind you of late rent, expiring leases, and thoroughly categorized extensive reports. You can judge the user-friendliness of property management software if it allows you to manage your properties portfolio and database all on your own. It helps you to:
- Store lease details like rental charge, payment frequency and deposit details
- Automatically generate payment schedules for each tenant and property
- Produce various tenant reports including lease expiration and account balances
- View tenant payment history, account balance & future payment schedule
Inventory Management– You can list and keep track of every single detail about the property including the property dimensions, type of property, information about the chattels and even list out all the complaints received with respect to a particular property.
With good property management software you will be able to create groups or segregate properties depending on location, property values or monthly rental values.
Creating and Printing Reports – Report creation and record maintenance is an important function of the software. Whether you want to review the lease agreement, prepare an eviction notice, or send a late payment notice, you can easily create any report. With press of a button you can print out a balance sheet and other financial reports that are extremely important for year-end taxation purpose.
How to Choose the Right Property Management Software
Prices for property management software can range from $100 to $10,000 (or more). You should not buy software more than what you need.
The two most common mistakes are that either investors go for an over kill or an under kill.
Do you need software to manage your properties and your office too? Buy property management software that does property management and not the extras.
You can buy plenty of inexpensive products that are perfectly suited for your office management. Select cost effective property management software that can integrate with your office management software.
You can land up buying a piece of junk software from an impressive looking web site. Look for the following features as a sign of a good quality product:
- You should be able to use a ‘trial version’ before deciding to buy the product
- Maintain a separate ledger for each Tenant and each Owner.
- Deal with bank checks and deposits.
- Automatically post rent, management fees, and late fees.
- Should be able to handle different types of properties such as single family homes, multifamily homes, condos, and commercial units without having to buy extra modules.
- It should be able to grow as your real estate business grows. Look for the ability to purchase add-ons, such as work order modules, online rent payment modules, or tax related modules
This is one important aspect to consider when deciding on property management software. There should be ample storage space that you can upload and preserve your tenants’ profile such as personal details, credit reports, references from past property owners and current employer details. It should store copies of all correspondence that you have had with the tenant and any other information that you might consider useful in future.
Some software’s even allow you to upload digital images of each and every room in the property and store them. These images are of great value when the property is rented out to tenants, as they can be used as evidence describing the existing condition at the time when the home was being given out on rent.
Check the Cost of Technical Support
Many property management software companies don’t offer technical support. Ongoing technical support is a must. You must always check out the cost of the technical support.
Some vendors force you to buy their expensive software updates in order to receive their technical support. Others offer free support for a short period of time then charge exorbitant prices from a dollar per minute (with a minimum amount per call) to well over $100.00 per hour for support.
Look for at least a 60 to 90 day free support plan as part of the purchase. Better still find a vendor that offers free unlimited support.
Lookout for the Hidden Costs
Difficult, unfriendly software costs you time. Calculate how much money in terms of time it costs you when you battle with your property management software. The software you select should be easy to install, easy to use, and has plenty of help.