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You think you need Property Management Software?

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Property Management Software doesn’t make you a Property Manager

As most software products are moving to the “cloud”, you will start seeing traditional software fade away and you will have everything you need accessible through the Internet. Yes, this gives you the ability to be able to manage a lot of your tasks through a single portal from anywhere, with any device, but this all comes at a cost.

One of the major draws to becoming a DIY Property Manager rather than hiring out the task to a professional property manager is to keep as much money in your pocket as possible. So why do you want to pay the recurring costs of Property Management Software?

Before you dive into signing up for a “cloud”-based solution, take a few moments to think about what you are really looking for and how much money are you willing to spend. Remember, just like with physical goods, it is typical that the more you pay for something, the better it is.

It costs WHAT???

Now I have not worked with any of the available solutions as of yet (I am working on a plan for just that), but I can tell you that it appears the typical per-unit cost is around $1.00. However, some of these packages have minimum monthly fees, as high as $200.00 and setup fees as high as two months worth of fees; so a single package might cost you $400.00 in initial setup fees and $200.00 reoccurring monthly charges. Yes, if I am reading their website properly, that would be $600.00 in the first month! This particular package, all be it one of the more expensive, it also appears to be the most comprehensive package. If we move to the other end of the spectrum, I have seen packages that are strictly based on the $1.00 per unit costs as the monthly fees. At some point, corners have to be cut if a package is only going to cost you $1.00 per month.

I started as a DIY Property Manager before the big drive to move everything to the “cloud”, so I am still using software that I have purchased or free packages. I only have three rental properties that I am currently managing so it is not difficult to keep everything straight. I receive three rent checks per month, I rarely get a maintenance call, and I am the owner of two of the rentals. I don’t have a need for a dedicated system for my tenants to create a maintenance request online, there is no need for an owners portal so they can see what is happening with their property, and all of my accounting is done in QuickBooks Pro 2009 since my accountant uses QuickBooks and I just need to bring my business file in for my accountant to work with. And when a unit becomes vacant, I go over to my Postlets account and start writing up a new advertisement.

Dollars flying out the window

Yes I have a few steps that possibly could be consolidated in some way, but is it really necessary when I only have three rental properties to manage? Depending on where your properties are located, that $200.00 per month per unit is probably more than you would pay a professional property manager to manage each of your rentals. So where are your savings then?

Questions? Comments? Contact DIY Property Manager!

Comment(7)

  1. I am a consultant for a real estate and mortgage executive. He personally owns 2 commercial office buildings, and at least four residential rental houses with anticipated growth.

  2. It is true that there are very few options for decent property management software out there that are also free. There is one option, though, that is both entirely free, and also very easy to use: http://structure.pm

    This is a web-based app that is still in a public beta, but the basic service (the essentials) is free for up to 15 units. Having all your info in one place, and being able to easily communicate rent status and repairs with tenants is very helpful.

  3. Actually there are a lot of affordable PM software such as Buildium, Structure, and Rentec that are designed for small property managers.

  4. Now, I have not yet “played” with any of the available products, but I do plan on writing reviews of them. Structure is still in beta. Rentec seems pretty limited on functionality for their “Free” plan and Buildium starts at $25.00 per month. If you have very few units, like I do, which is pretty typical when you are just “starting out”, cost can be everything.

    What is the benefit of paying for dedicated property management software (SaaS or otherwise) when you only have a small handful of units? Do you expect a significant turn-over rate that you need to have a pretty user interface? Yes, it can make things easier, but there is a cost involved. You have a completely dedicated accounting system that cannot be used for other things such as your personal accounting or any other small ventures that you may have.

    Buildium: At $300.00 minimum per year. You appear to get the full feature set, but $300.00 per year can easily cut into your bottom line when you are talking about a reoccurring fee.

    Rentec: Very limited feature set for their “free” plan. “Free” seems to get you an accounting application and vacancy reporting. Again, if you only have a few units, do you really need an application to inform you that you 1 out of 5 of your units is vacant? In general, since most free plans don’t work as a business model unless the company is venture backed, how long will the “free” plan be available.

    Structure: This is still a beta application, but appears to have potential. The website isn’t nearly as polished as others, but it very well might not have the funding that the other companies have acquired. It would be nice if there were a definitive feature list provided somewhere (maybe I just don’t see it) as well as a ‘Login’ button. I guess I will have to dig through my e-mail from last night to figure out how to log back in…

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