Property Management Software

Introduction

Property management software (PMS) is intended to automate various back office, financial and operational tools for real estate property managers. Software solutions in this category will typically include features like lease management, maintenance management, and rent tracking tools. These allow property owners to continuously monitor the current state of their property portfolio and quickly respond to financial and operational issues as and when they arise. Additionally, it is common for PMS solutions to include a property database and a tenant portal, assisting with communication.

One of the single biggest benefits of a property management system for Canadian businesses is the ability to track various issues related to multiple properties, all from one place. Automation tools can help to reduce the overall workload for real estate property managers and their staff, while rent tracking and vacancy management tools can also help with optimizing financial results. However, it is also worth noting that property management software can be advantageous for tenants too. When a tenant portal is present, it can be used by those renting properties to ask questions, communicate problems, submit documents, pay rent, or alert property managers to maintenance issues.

Property management software is sometimes described as real estate property management software in order to separate it from similar software categories, including hospitality property management software. It is also closely related to other solutions, such as lease management software and real estate CRM software. Ultimately, the software makes it easier to keep track of key details related to properties and tenants. This is achieved by centralizing information and tenant communications so that useful data can be more quickly and easily accessed.

Many different aspects need to be factored into a purchasing decision, with examples including the available budget and the size of the property portfolio in question. Nonetheless, the property management software features will usually rank among the most important factors of all. Although the precise features of a property management system can vary, the majority of high-quality options will include the following:

• Keep track of important information, such as start and end dates, and renewal windows
• Access a record of rental payments, including payment dates and amounts
• Manage information related to property maintenance and repair requests
• Provide tenants with communication channels and/or options to pay their rent

What is property management software?

Property management software (PMS)—also known as a property management system or as real estate property management software—is designed to assist property managers via the automation of various operational, financial and back-office tasks. The best PMS solutions work by centralizing important information and making key data easily accessible. This can be especially valuable when a property manager has multiple properties in their portfolio and when they are responsible for overseeing a number of different tenancy agreements.

Generally, a property manager will utilize property management software to keep up-to-date with rent payments, manage tenancies, and stay alert of instances where a tenant enters into the renewal period. Moreover, a PMS solution can serve as a useful tool for monitoring tenant communications, managing maintenance requests, and providing tenants with important information about their tenancy or the agreement they signed. The automation component of property management software can also improve efficiency and accuracy, especially with repetitive tasks.

Aside from assisting property managers with their core tasks, however, many property management software solutions will also provide a tenant portal. When present, such a portal is likely to include options for communicating with the property manager or their staff and paying rent. This can then make it much easier for tenants to report problems, ask questions, make payments on time, and keep the property manager up-to-date with their intentions for the future.

What are the benefits of property management software?

The benefits of property management software are related to the idea of bringing communication, back office, financial, and operational tools into one place and centralizing as much relevant data as possible. When used effectively, the software can assist property managers with staying on top of core tasks and responding to tenant requests, and some tasks can be automated to reduce the workload. With that being said, it is important for Canadian enterprises to address some of the specific advantages of using the software, and these will typically include the following:

• Centralized data: real estate property managers are required to handle a lot of data, including terms of tenancy agreements, payment histories for each tenant, information about each property they own, and all relevant contact details. One of the biggest plus points of using high-quality property management software is that centralizing all of this data for easy access means many administrative tasks can be made significantly more efficient. Keeping all of the data in one place can also reduce compatibility issues and help to prevent errors. Given that 67% of Canadian home-buyers show concern over the use of their personal data when buying a property, integrating a centralized and secure system for data management is crucial in any property management tool.
• Automated processes: many of the tasks associated with property management are fairly repetitive and predictable. For instance, payment requests are likely to be sent at regular intervals and are likely to consist of the same information being sent out each time. A big plus point of many PMS solutions is the ability to automate some of these predictable tasks, meaning repetitive communications can be sent out automatically. This then frees up time for property managers to focus on more complex tasks. It can also help to avoid situations where an important notification is not sent out when it should be, which can then cause unnecessary confusion or delays.
• Two-way engagement: the benefits of property management software extend from property managers to their tenants. This is especially true when the software includes a tenant portal with communication options. In such cases, tenants can easily ask questions, make rent payments, report maintenance issues, or communicate other important information to the property manager, who can then respond appropriately. The ability to access previous discussions with tenants can also help to ensure issues are tackled efficiently. This can be vital for ensuring tenants are happy and that the terms of their tenancy agreement are met.
• Improved accuracy: by its very nature, the work property managers need to carry out can be time-consuming and requires great accuracy. When complex calculations are carried out manually, there is the risk of errors being made, and even a single small error can cause major issues down the line. With this in mind, a significant advantage of most property management software solutions is the ability to carry out much of this work digitally. This means fewer numbers need to be entered manually, delivering greater overall accuracy. As a result, the bills sent to tenants or accountancy work carried out by the property manager is more likely to be correct.
• Tenant screening: property management involves screening tenants to make sure they are suitable for renting and avoid potential scams or high-risk tenants. Using property management software, it becomes possible to automate some of this process while easily filtering candidates based on specific parameters. Potential tenants can be sorted based on factors like their age, income, occupation, and credit history so that the safest and most risky candidates can be identified, leading to better decision-making.

What are the features of property management software?

The features of property management software can vary significantly from one solution to the next, and this represents one way that buyers can narrow down the available options and select the most suitable package. After all, the most important features for a commercial property manager with a small portfolio could differ substantially from the features that are most important to a residential property manager with a large portfolio. A Capterra article outlined the top six realtor CRM software solutions for Canadian real estate agencies to manage their database, and a lot of similar features exist with property management software solutions. Nevertheless, some features are more common than others and, in general, expect the best options to include most of the following:

• Property database: a built-in property database allows access to information about all properties. Some of the details that may be accessible through this feature include room measurements, property valuations, and the property's current status. The ability to easily access this information about all properties within a portfolio can be useful for making quick comparisons or providing important details to tenants or potential buyers.
• Financial management: create financial reports and carry out accounting functions through the use of financial management tools. This may include managing overall cash flow, viewing financial transactions—including property sales and rental income—and producing charts and other reports.
• Lease management: view lease agreements for all properties that have been leased to tenants and manage other relevant information. In addition to having access to the agreements signed by tenants, it is also possible to view the length of each tenancy and the renewal schedule. As a result, it becomes much easier to stay on top of when action needs to be taken. Some solutions also provide automation in this area, automatically sending out renewal notifications, or other important notices, so that deadlines are less likely to be missed.
• Maintenance management: manage maintenance issues across an entire property portfolio, all from one place. View communication from residents about repair work that may be needed—or other maintenance issues that may need to be addressed—while also accessing details about previous maintenance work that has already been carried out. Additionally, PMS solutions with maintenance management features will often also allow the allocation of maintenance work to specific staff members once the need for such work has been established.
• Commercial/residential management: switch between commercial and residential real estate management options. Many property management software solutions include the option to manage commercial and residential properties simultaneously, although some solutions only specialize in one area. When the option to manage both is present, there may also be slight differences in terms of the features that are available, depending on whether the portfolio is in the commercial or residential section. Solutions that allow for the management of both property types can be especially useful for those with a diverse property portfolio.
• Rent tracking: view all of the key information related to rent collection and store this data in a single location. Access the payment histories of all tenants, view when rent is due for each property, check who is up-to-date with their payments and identify who is lagging behind. In some cases, it is possible to track how rates have changed over time and create reports indicating how much rental income is generated each month.
• Vacancy management: keep on top of which property units are currently occupied and which are currently vacant and available to rent out. Some property management software will also include options that can assist with listing vacant properties on popular platforms in order to attract new tenants.
• Tenant portal: provide tenants with access to their own dedicated portal, where they can carry out important tasks, ask questions, submit queries, or alert managers to maintenance issues that need to be resolved. Tasks that may be possible for tenants to carry out using the portal include accessing their bills and paying their rent each month. This then helps to make the property management software mutually beneficial for property managers and their tenants; it improves efficiency, makes common tasks easier, and aids communication.

Use Capterra's property management software directory to filter options based on the features they contain. As only solutions that match requirements can be seen, narrowing down a search for property management software is easy.

What should be considered when purchasing property management software?

When purchasing property management software, property managers looking for the ideal PMS solution will need to weigh up a number of different factors. After all, the software on the market can vary significantly, and the option that suits one property manager may not necessarily be the best option for another. One of the best ways to narrow down the available options is to ask some key questions.

• Why use property management software? The first set of questions to ask when purchasing property management software is related to its purpose and what it is actually needed for. How will it be used? How can it assist or make things easier? What are the main features required? With the answers to these questions, it becomes easier to prioritize the right features and focus on the solution that actually fits. It is crucial to understand that the search is for the best software for a company's needs, rather than simply finding the best all-inclusive package. Some solutions on the market may have a range of excellent features that are irrelevant to what the software will be used for, while others may have a smaller range of features but tick all relevant boxes.
• How much does property management software cost? As with any purchasing decision, a major factor that needs to be considered is the cost. The option chosen needs to be the best solution available within the budget. It is also important to think about the total cost of ownership and not just the upfront fees. For instance, if buying a cloud-based option, the upfront fees may be very low, but there may be a monthly subscription fee. Also, give consideration to whether specialist training will be required, how much it will cost, whether or not there is a free trial, and whether or not the software offers free updates.
• What is the best deployment option? Property management software falls into two categories: options deployed on-site and options deployed in the cloud. Both of these approaches have advantages and disadvantages. For example, cloud-based options tend to have lower upfront costs. They are easier to set up, and information can be accessed remotely from anywhere in the world, as long as a compatible internet-enabled device is used. By contrast, on-site options provide a greater sense of ownership, and while they tend to be more expensive initially, there is no tie-in to recurring subscription charges. Ultimately, which of the two options is best may come down to personal preference and individual circumstances.
• What property types are supported by the software? Within the real estate property management software category, different solutions may focus on different types of properties. Some solutions will be based on commercial property, while others may have more of a focus on residential property or accommodation that is rented to tourists. Some solutions will cover all of these areas, which is ideal for a diverse portfolio, but a more focused solution may be better if the portfolio is smaller and consists of only one type of property.
• Can the software be integrated with existing systems? To get the most from property management software, property managers need to think about the current software, systems, and processes in place and evaluate how much the PMS could be integrated within that current setup. In particular, consider how well it can integrate with any existing CRM software being used, along with any accountancy tools. Ideally, try to combine software packages that will allow for the smooth transition of data from one application to the other so that the various packages can be used in combination without unnecessary friction.
• How easy is the software to set up and use? Finally, it is worth considering how easy the software will be to set up and then use. This is relatively simple when free trials are available, but user feedback and knowledge of how similar software solutions work may need to be relied upon in other cases. Capterra's property management software directory can assist with this because it includes user reviews for the various software solutions on offer. Better still, these reviews are broken down, and one of the categories users can rate software on is the ease of use. As a result, the platform can serve as an invaluable tool for finding the most user-friendly option.

What are the most relevant property management software trends?

The most relevant property management software trends should be factored into any purchase decision. This means considering the major software trends and the trends that are having the biggest impact on property management in general. In particular, some of the most significant trends that organizations and individuals involved with property management need to be aware of prior to buying software are:

• The rise of virtual reality (VR) within real estate: Virtual reality (VR) technology has been an emerging trend in Canada for years now, but Gartner research suggests it is still several years away from reaching full maturity. Nevertheless, there is an ever-growing demand for VR capabilities within the field of real estate, with potential tenants wanting the option to take virtual tours of properties prior to making an in-person visit. A Capterra study revealed that 20% of Canadian home-buyers purchased a property after only viewing the house via a virtual tour during the pandemic, and 35% consider virtual tours to be essential when purchasing a property. Property managers can also benefit from this technology because they will be required to organize fewer in-person tours of properties, and they can use VR to present a virtual tour that highlights the best aspects of their property to potential tenants.
• Cloud technology and the growth of Software as a Service (SaaS): Over recent years, there has been a shift within many industries to cloud-based software solutions. This has been motivated by a number of different factors, including concerns about data being stored in a single location, demand for remote accessibility, a desire to reduce setup times, and the ability to switch to a model with more predictable costs.
• Increased demand for mobile accessibility: A general trend within software development has been increased demand for mobile accessibility, which ties in with mobile optimization and remote working ideas. If this is an important factor, it may be best to turn to a software solution that either has a companion mobile app or a cloud-based solution that can be accessed using a mobile web browser.
• Widespread use of AI-powered chatbots: With modern demands for fast response times, the use of AI-powered chatbots is becoming widespread within the field of customer service. Despite reports that the real estate industry has been slow to adopt property technology, or 'PropTech', the use of chatbots is becoming more common in this field too. Chatbots are especially good at providing answers to the most popular questions, and they can deliver excellent response times. Yet, even when human intervention is needed, chatbots can play a role in gathering preliminary information and putting the user through to the right staff member. In software solutions with a tenant portal, chatbots could help to reduce workloads and provide tenants with swift resolutions to many problems.
• Heightened focus on sustainability: Concerns about the environment and about sustainability, in general, are disrupting most industries. In the aftermath of the COVID-19 pandemic, 67 per cent of Canadian consumers stated that they were reassessing the way they buy, with a view to living more sustainably. Within real estate, this could mean more communication being carried out online, a demand to go 'paperless', and opportunities to cut down on travel by viewing properties remotely, using technology like VR and 360 degree photography.
• The need for accuracy and efficiency: The field of real estate relies upon accuracy, especially with financial information. Additionally, tenants, customers, and others involved in business or property transactions tend to demand swift responses to questions and efficiency in terms of processes. These demands tie in with the concept of automation, which is why many property managers tend to seek solutions that allow the most repetitive and predictable task to be handled automatically, and in an accurate and timely fashion.

Sources

The features highlighted were identified based on their relevance to property management and the percentage of products in Capterra's directory that offer them. The following sources were used for the creation of this document:

1. Best Real Estate Property Management Software 2021 - Capterra Canada 2021 (Date accessed: Monday, August 30, 2021)

2. 3 Reasons Why VR and AR Are Slow to Take Off - Gartner.com (Date accessed: Wednesday, September 1, 2021)

3. Real estate technology in Canada: 20% purchased property after a virtual tour - Capterra Canada 2021 (Date accessed: Thursday, December 12, 2021)

4. Sustainability: consumers care, but don’t necessarily act - Capterra Canada 2021 (Date accessed: Wednesday, September 1, 2021)