If you've recently purchased one or more rental properties, you'll soon need to make the decision whether to manage these properties yourself -- seeking tenants, negotiating leases, and responding to maintenance problems -- or delegate this responsibility to a property management company. If you do choose to self-manage your properties, what documents or computer programs will you need to make this process easier? Read on to learn more about some of the different types of services offered by property management software.
What is property management software?
This term is used to encompass several types of software packages or bundles which include all the legal documents, tax preparation forms and programs, and data entry programs you'll need to handle the rental and maintenance of your property. Although you'll be able to obtain these forms and programs piecemeal, these bundles make the process much easier -- and may even tune you in to ideas or money-saving tips you might not have heard.
In addition, these software programs also receive automatic updates (generally for a small fee) that will ensure you're up-to-date on changes in rental law or tax reporting. If you are choosing not to use an accountant or professional tax preparer, this service will make it much easier to file your own income taxes. For example, each January, property managers are required to provide a 1099 tax form to each vendor or maintenance person who has been paid more than $600 in the last year. Software that tracks these expenses -- including the vendor's address -- makes it easy to determine to whom the forms should be sent, without requiring you to look through hundreds of receipts and invoices.
What type of property management software do you need?
There are a number of different software packages at a wide range of prices. Choosing the right type of software for your needs depends on the following factors.
- Number and types of properties managed
- If you have primarily residential property, your software needs will be different from someone who is renting commercial or industrial property. Look for a software solution targeted toward your rental demographic -- or, if you manage different types of property, a deluxe version that offers everything you need.
- Number of people who will be using the software
- Most software programs will either charge a flat fee for an unlimited number of users, or charge based on the number of users subscribed. If you run an entire rental business and will have a handful of employees all using this software, purchasing the unlimited bundle will save you money -- whereas if you handle your rental empire yourself, you may be better served with a per-user fee structure.
- Structure of your rental office
- Most software programs are either available in disc form -- installed and kept on your primary computer -- or web form, where the program itself and all your data is kept on a cloud server. If you're often on the go and don't have a "home base," being able to access your management software from any web device can be handy. If you manage all your properties from a single computer in your home, the disc program is likely more convenient.
- Be sure to see if the cost of training is included in the software price. This can save you days or more when trying to navigate the software and instructing your employees on how to create reports or input data.
What else should you consider?
In addition to the above factors, there are some nice-to-have features that may help tip the scales in one direction or another. In addition to using the above criteria, you may look for software that includes:
- Programs allowing your tenants to pay rent online;
- Programs allowing you to electronically post rental advertisements, accept applications, and screen tenants; and
- Programs allowing you to contact (and pay) repair and maintenance technicians online.