Property Management Software Sure Is SaaSy

by

Market Analyst

If it's been a while since you last rented an apartment or a house, you may be surprised to find that the property management industry is much more tech savvy than you remember.

The rise in number of vendors offering web-based, Software as a Service (SaaS) systems for property management is driving the adoption of new technology by property managers. In addition to major web-based players such as Buildium, AppFolio, PropertyWare, and DIY Real Estate Solutions, an increasing number of other SaaS property management software vendors have recently started to emerge. Property managers are finding that the advantages of the SaaS model help them accomplish their most important goals – retaining tenants and attracting new ones.

Besides a relatively low entry cost, there are five major reasons why web-based property management software is gaining traction in the industry. The advantages of the model offered by SaaS property management vendors include:

  • Moving tenant services online;
  • Offering web site creation and integration;
  • Eliminating the need for extensive software training and maintenance;
  • Enhancing communication between owners and managers; and,
  • Improving record keeping and security.

Let's examine these reasons in more depth to see why property managers are spending more time than ever online.

Online Tenant Services
A business maxim that is becoming more true every day is that if a company can offer a service online, they should do so. SaaS based property management software fits this maxim well by taking many traditional functions of a property management company and making them available online.

Think about common interactions between tenants and property managers. Chances are a SaaS based software vendor has come up with a web-based solution:

Paying rent? Head to the company's web site with your checking account information.

Need to review your lease? Access it online behind a registration page.

Want to view available units? Peruse a online gallery of photos or videos.

Need to communicate en masse to tenants? Send out an e-mail blast.

It's true that these tenant services can be created without specific property management software. But what a SaaS model does is deliver these services in an integrated suite. A piece-meal approach would involve managing those with different services and it's possible the information wouldn't integrate with other programs without some doubling up of data entry.

Few would disagree that the more services a company can offer online, the better. SaaS based property management software gives management companies more online options.

Website Creation and Integration
In the spirit of moving services online, many SaaS property management vendors give companies the option to create online portals where tenants and owners can manage accounts.

Smaller management companies often lack the resources to build a web site that is also a business tool. By using a SaaS software vendor that offers a tenant/owner portal option, these companies are able to bypass the cost of hiring a web developer. This levels the playing field by lowering the barrier of entry to the online market.

These integrated solutions can also help market vacant properties and units more easily than traditional on-premise software.

Some SaaS software vendors offer integration with listing sites such as Craigslist, where a property manager is only a few clicks away from posting professional looking ads online.

These integrated web site and software suites increase the professionalism and efficiency of a management company, in addition to attracting new tenants and helping smaller companies easily get online.

Fewer Technology Headaches
In the software industry as a whole, one of the most attractive features of SaaS systems is that they're browser-based, multi-tenant architecture systems. All software updates are pushed out automatically by the software vendor, requiring little to no action by the customer.

This auto-updating, web-based approach is ideal for property managers. Many property management firms have at best a contracted IT worker to solve technical issues and at worst nobody. SaaS vendors are able to remotely fix issues, when they do occur.

Finally, one of the primary characteristics of SaaS property management vendors is that they've designed their systems specifically to be easy-to-use and to appeal to those who aren't especially tech savvy. This results in a faster learning curve for property managers who are not technically proficient.

Enhanced Communication
At the end of the day, a property management company not only has to satisfy their tenants to stay in business but also the property owner. SaaS can help improve communication between owner and manager.

Because SaaS property management software is web-based, owners and property managers are given access or e-mailed reports detailing rent rolls, financial standing and virtually any other data they'd like to be able to see. Owners can log in from their home or office and property managers can log in from any property with a web browser.

By quickly addressing problems between ownership and management, an owner is less likely to hear, "You didn't know we were only half-occupied?" at the end of the month.

Finally, web-based property management software is also accessible through a smartphone's web browser, adding another layer of mobility to SaaS.

Property managers and owners a like enjoy having this level of access and owners reward management companies who offer it.

Better Record Keeping
Any property owner or manager will tell you that you only need to experience one lawsuit to know that your record keeping must be impeccable. By moving to a SaaS model, companies are able to easily digitize and store complaints, warnings, payment records, maintenance logs and lease agreements through their property management software. This information is important when dealing with evictions or lawsuits.

Data security is also an important consideration with record keeping and SaaS is able to deliver on that. Most web-based property management vendors offer security on par with online banking institutions.

Finally, a SaaS based vendor will likely back up records for a company. This is done automatically because the information isn't stored locally – it's in the cloud. Even in the event of a total loss of hardware, a company's data will be available as if nothing happened.

The Trend Will Continue
The advantages offered by SaaS systems closely mirror the issues that property managers have to solve. Moving services online, integrating data, reducing technical issues, improving record keeping and enhancing communication are all advantages that will continue to motivate companies to adopt SaaS based property management software.

 
  • http://www.rebliss.com Bryan McDonald

    Chris, This is a great article and a good list of resources available on the web. I think you are right that the trend of web based or cloud based software will continue. I recently wrote and article on REbliss.com about an appraisal software company that just updated their software to now let appraisers sync their reports across the web so they can edit them when they are out of the office. The real estate appraisal industry has been slow (in my opinion) to adopt new technology but I think this trend will continue.

  • http://www.venturacountypropertymanagement.com Erik Hansen

    I like the all-in-one package with the SaaSy platforms. But I don’t think it’s a good idea to have an owner portal where they can see when tenants pay late! I think it would lead to unnecessary stress from the owners which would lead to a ton of calls to the property manager. Isn’t it part of the business for tenants to pay late and managers trying to collect? This turbulence should be sheltered from the owners and they should be at peace as long as they get their owner draw without knowing the trouble we had to through to get the rent?

  • http://www.SoftwareAdvice.com Chris Thorman

    @ Erik

    Agreed Erik. Reporting options are/should be completely customizable.

  • http://www.rentworld.com Derek Kalles

    Spot on Chris. The only point I would make is that while you outline all the potential benefits, like any business decision, there are downfalls as well: Performance issues, downtime issues, scalability of cost, dependence on a single vendor, etc. While I don’t see any of these as a “smoking gun,” and am absolute in believe that SaaS is here to stay and for good reason, it is important for owners to make a decision that is based on analysis of all the pros-and-cons and this needs to include looking into the future of their business. Good stuff; really enjoying the blog!

    • http://www.SoftwareAdvice.com Chris Thorman

      @Derek

      Yep, you’re right on the possible cons. Connectivity seems to be the major one, although I think that becomes less and less of an issue every day.

  • http://ActiveBuilding.com Saar Safra

    Chris,

    Good article; comprehensive, deep and insightful. One worth mentioning comment, is that once you have a dedicated Saas(y) application for your property, the sky is the limit. Aside from Rent Payment, Service requests and the obvious contender features, much challenging tasks can be addressed, automated and streamlined. Package Management, Resource Reservation, Permissions to Enter, Premium Concierge Services (form to order a car, form for Dry Cleaning, with fully-automated back-end fulfillment) etc. Another aspect that is easily feasible is an in-property social network. With a dedicated in-property app, for owners, renters and on-site team, a social graph can be obtained, maintained and leveraged at very little to no effort (auto-register at move-in, auto-detach at move-out). There is more, but I will try to make this comment shorter than your piece :-) Not to solicit to our solution, I still think my point is valid regardless of the vendor (Saas Provider).

  • http://www.esquirepropertymanagement.com Gregory Guillen

    Chris,

    We currently use Tenant Pro 7 from Domin-8. We found it to be very buggy, but the company keeps coming up with new bug fixes and download patches. However, we recently discovered that the company filed for bankruptcty last November ’09. Evidently, Tenant Pro was purchased by another property management software company. After reading your article, I hope TP evolves into an all-in-one platform, otherwise, we may have jump ship to keep up with technology.

  • http://nicherealty.net Melissa Stanley

    Very interesting article, I have five rental units myself and write on my blog, chicagolandlord.blogspot.com, for the smaller real estate investor. I would love to have this type of software but I can’t see how it is cost effective for small property owners that have less than 20 rental units. The cost of purchase and implementation would probably out way the benefits. Still if I was working for a mid size company I would strongly consider SaaSy.

  • http://www.vreaze.com Marty Thomas

    Hi Chris.. I’m a one-man-team software company (Micro-ISV), and have worked in the SaaS landscape for the past few years. I thought your article was very encouraging for the industry in general. A portion of the property management industry that was not covered is the ‘Vacation Rental’ or ‘Short-term’ management area. This area has exploded because of Internet based services such as VRBO and Homeaway. For the first time (thanks to the internet), an individual has the power to make their homes available as a short-term rentals to the masses. The SaaS applications that stem from this can also be very powerful. For example, I have created the “Vreaze” SaaS application that automatically accepts rental inquiries from 3rd party sites, and automates the short-term rental process. Working on an iPhone/iPad app now when will open up a whole new realm of possibilities. A very exciting time in the SaaS world.

  • http://www.managerlabs.com Linda Day Harrison

    Chris,
    Thanks for infusing enthusiasm to our industry and reminding us we need to focus on our internal systems and retool everything possible to make our business model profitable. Automating, elimination of redundancy, improving customer service, rethinking processes, exploiting economy of scale and standardization should be the top of all of our agendas. I have connected your article through to my blog as well at http://www.managerlabs.com. I encourage your readers to join our awesome family of groups on LinkedIn as well.
    Thanks,
    Linda@ManagerLabs.com, CPM, CCIM

    Consider joining our family of LinkedIn groups:

    PFMI (Property and Facility Management Innovators)
    http://www.linkedin.com/groupRegistration?gid=1858850

    –Vendor Bidding Lab (beta) subgroup of PFMI
    http://www.linkedin.com/groupRegistration?gid=2238793

    –PFMC(Property Facility Management Companies) subgroup of PFMI
    http://www.linkedin.com/groupRegistration?gid=2644670

    Rooftop Gardening
    http://www.linkedin.com/groupRegistration?gid=143300

    Certified Property Managers (CPM Group)
    Need to be listed in IREM Membership Roster.
    http://www.linkedin.com/groupRegistration?gid=138868

    Join me at Maven Research too: https://www.mavenresearch.com/join/4G4Y4QmB

  • Aqi

    Great article and I agree SaaS is the way forward. I’ll add my few cents here to help people looking to buy or upgrade their property management software:

    Hidden charges:
    As the SaaS based software usually have monthly fee in shape of support/licensing etc, most of the companies i’ve come across have many hidden charges that can really swell your monthlies and eventually the total cost of software so always try to find out whats included in the standard licensing and whats not.

    Lengthy contracts:
    Well it wont be a big issue if the software does exactly what you need, but if you are buying into a software without thorough testing it’ll be good to not tie into long term contracts.

    Local support:
    Another important thing to consider is to make sure the software company have support team based locally, a timezone and cultural difference sometime can be a real pain in the arse, if you know what I mean.

    Training:
    Make sure some initial training is included in the upfront price you pay to avoid any nasty financial surprises, also make sure the software comes with a comprehensive documentation.

    Website:
    A software that comes with a pretty website is always better, see if your software provider can offer you an integrated website that is powered by your software to cut the down time on website management.

    Now here’s a list of companies that are offering SaaS based software, they all have pros and cons:

    1: Gnomen Estate Suite – Excellent all in one package, offers everything including residential and commercial property management, accounts and integrated website.

    2: Vebra live – Very good online software, do not come with a website but can feed your existing website using separate module

    3: LetMC – Good software but for residential properties only, don’t come with a website but can feed using separate module.

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