Understanding Property Management

Discover what property management entails, explore top property management software and companies, and learn about their costs and features. Click the link below to learn more.

Property management is a crucial aspect of real estate, encompassing a range of services designed to maintain and enhance the value of properties. Whether you're a landlord managing a single rental unit or a large property management firm overseeing hundreds of units, having the right tools and services can make a significant difference. This article explores what property management entails, highlights popular property management software, discusses common features and costs, compares top property management companies, and evaluates the pros and cons of hiring a property management company versus using software solutions.

What Does Property Management Entail?

Property management involves overseeing and managing real estate properties on behalf of their owners. This can include residential, commercial, and industrial properties. The goal is to ensure the properties are well-maintained, occupied, and profitable. Key responsibilities of property management include:

1. Tenant Management

Marketing rental properties and finding tenants.
Screening prospective tenants and handling lease agreements.
Collecting rent and handling late payments or evictions.

2. Maintenance and Repairs

Coordinating routine maintenance and repairs to ensure properties remain in good condition.
Managing emergency repairs and ensuring quick response to tenant requests.

3. Financial Management

Handling budgeting and financial reporting.
Managing operational expenses and optimizing income.
Ensuring compliance with tax regulations and legal requirements.

4. Legal Compliance

Ensuring properties meet local and state regulations.
Handling lease agreements, tenant disputes, and evictions in accordance with the law.

5. Communication

Acting as a liaison between property owners and tenants.
Providing regular updates and reports to property owners.

Effective property management can maximize rental income, minimize vacancies, and ensure properties are maintained to a high standard, enhancing their long-term value.

Popular Property Management Software

Property management software has become an indispensable tool for landlords and property management companies. These applications streamline various aspects of property management, from tenant screening to maintenance scheduling. Here are some of the most popular property management software solutions:

1. AppFolio Property Manager

Features: Online rent collection, tenant screening, maintenance tracking, accounting, and reporting.
Cost: Starting at $1.40 per unit per month with a minimum monthly fee of $280.
Promo/Offers: Free demo available.

2. Buildium

Features: Tenant and lease tracking, accounting, online payments, maintenance management, and resident portals.
Cost: Plans start at $50 per month for up to 150 units.
Promo/Offers: Free 15-day trial.

3. TenantCloud

Features: Rent collection, lease management, tenant screening, maintenance requests, and accounting tools.
Cost: Free for up to 75 units; premium plans start at $12 per month.
Promo/Offers: Free basic plan.

4. Propertyware

Features: Customizable workflows, tenant and owner portals, accounting, maintenance management, and marketing tools.
Cost: Starting at $1 per unit per month, with a minimum monthly fee of $250.
Promo/Offers: Free demo available.

5. Yardi Breeze

Features: Lease management, online payments, maintenance tracking, accounting, and marketing tools.
Cost: Starting at $1 per unit per month, with a minimum fee of $100 per month.
Promo/Offers: Free demo available.

Common Features of Property Management Software

Property management software typically includes a variety of features designed to simplify the management of properties. Common features include:

1. Tenant and Lease Tracking

Manage tenant information, track lease terms, and monitor rental payments and due dates.

2. Online Rent Collection

Allow tenants to pay rent online, reducing late payments and simplifying the collection process.

3. Maintenance Management

Track maintenance requests, schedule repairs, and communicate with vendors and tenants.

4. Accounting and Financial Reporting

Manage property finances, including tracking income and expenses, generating financial reports, and ensuring tax compliance.

5. Tenant Screening

Conduct background and credit checks to screen potential tenants and reduce the risk of problem renters.

6. Marketing Tools

List vacant properties on multiple rental websites and manage online applications to attract new tenants.

7. Resident and Owner Portals

Provide online portals for tenants to pay rent and submit maintenance requests, and for owners to view financial reports and property updates.

8. Document Management

Store and manage important documents such as leases, rental applications, and legal notices.

Average Costs to Use Property Management Software

The cost of property management software varies widely based on the number of units managed and the features offered. Here’s a general breakdown:

1. Free to Low-Cost Options

Software like TenantCloud offers free plans for managing a limited number of units, typically up to 75 units.
These options are suitable for small landlords or those managing a few properties.

2. Basic Plans

Basic plans from providers like Buildium or AppFolio start around $50 to $100 per month, covering essential features for a modest number of units (e.g., up to 150 units).

3. Premium Plans

Premium plans with advanced features and higher unit limits can range from $1 to $2 per unit per month.
Providers often have minimum monthly fees ranging from $100 to $280, making these plans suitable for larger property portfolios.

4. Enterprise Solutions

Large property management firms may opt for customized enterprise solutions with extensive features and support.
Costs for these solutions can be significantly higher and are typically negotiated based on the specific needs of the business.

Top Property Management Companies

For those who prefer to outsource property management, several companies offer comprehensive services to handle all aspects of property management. Here are some of the top-rated property management companies:

1. Greystar

Services: Residential property management, leasing, maintenance, and asset management.
Specialty: One of the largest property management firms globally, managing over 500,000 units.

2. CBRE

Services: Commercial property management, including leasing, maintenance, and financial management.
Specialty: Focuses on managing commercial properties and offers extensive real estate services.

3. Lincoln Property Company

Services: Full-service property management for residential properties, including leasing, marketing, and maintenance.
Specialty: Known for managing luxury apartment communities and providing personalized service.

4. Cushman & Wakefield

Services: Commercial property management, facility services, and tenant representation.
Specialty: Expertise in managing office, retail, and industrial properties.

5. RealPage

Services: Property management software and services, including leasing, maintenance, and financial management.
Specialty: Provides both software solutions and managed services for property management.

Pros and Cons of Property Management Companies vs. Downloading Software

Choosing between hiring a property management company and using property management software depends on your specific needs and circumstances. Here are the pros and cons of each approach:

Property Management Companies

Pros:

Full-Service Management: Companies handle all aspects of property management, including leasing, maintenance, and financial reporting.
Expertise: Access to experienced professionals who understand legal and regulatory requirements.
Time-Saving: Property owners can be hands-off and focus on other priorities.

Cons:

Cost: Management companies typically charge a percentage of rental income, usually ranging from 8% to 12%, plus additional fees for certain services.
Less Control: Owners may have less direct control over the management of their properties.
Variable Quality: The quality of service can vary widely between companies.

Property Management Software