The real estate industry is huge.
More and more, realtors are turning towards real estate software to help them with demand. And according to CNBC, there are more renters now than any time since 1965. In 2016, 36.6 percent of household heads were renting their home, and that number has only been growing. So odds are, if you’re not renting property, you have experience as a renter.
But in case you don’t have experience renting or you’re looking to enter property management, there are some key things you should know before you go diving into property management software (even if it’s free property management software).
What is a tenant?
A tenant is someone who occupies a property they are renting from the owner. The owner may own a single house or apartment unit, or they may own an entire building with multiple units for rent.
Tenants typically pay rent monthly to the owner to continue living on or in the property. To protect the rights and property of both parties, tenants and owners are often required by law to sign a lease that is valid for a certain amount of time and solidifies details such as when a tenant can move in or out and how much they will pay for rent.
What is a lease?
A lease is a legal document that grants usage of land or property to a person for a specified amount of time. For renters and property owners, a lease is typically valid for one year, allowing a tenant or tenants to live in a house or apartment for that amount of time while paying a fixed amount in rent each month. A lease protects renters from being kicked out of their apartment without notice and prevents property managers from raising rent each month as they see fit.
A lease also protects the property owner by setting out certain rules a tenant must follow to continue living on the property. Tenants may be prohibited from having more than a certain number of pets, or pets over a certain weight limit. Tenants may also be prohibited from smoking inside the property, be allowed a certain number of guests visit at one time, or not be permitted to make permanent alterations to the apartment or house. Move-in and move-out conditions are also typically established within the lease, as well as any fees or security deposits required to move into the property.
Once the term of a lease is up, tenants typically have the option to re-sign the lease for another year or more, but changes may be made to the new lease. If an apartment or house is not rent controlled (meaning the government has established the amount that can be charged to rent a property), rent will typically go up by a certain percentage each time a lease is re-signed.
Tenants may also have the option to sublease their space if they cannot uphold their end of the lease but don’t want to break it and suffer the fees or ramifications for doing so. A sublease is a separate lease held by a third party that essentially allows them to take over the current tenant’s lease terms. For instance, if an individual signs a two-year lease on an apartment, but their job forces them to move to another city after a year, the tenant can find someone to sublease their apartment for the remaining year. That person will live in that apartment upholding all the terms of the original lease, but the agreement is between the original tenant and the holder of the sublease. That may mean that the new tenant pays rent to the original tenant, who then pays that rent to the landlord.
What is property management?
Property management is the operation and management of a real estate property. Property management ensures the property is up to code and properly maintained. Property managers also screen tenants, write leases and field maintenance requests from tenants.
Typically, property managers rely on some kind of property management software to organize their day-to-day tasks. Property management software can also provide tenant portals so tenants can communicate easily with property managers and submit rental payments and maintenance requests on their own.
Property management companies may operate a single building or hundreds of buildings across multiple cities. The more properties that are being operated, the more complex workflows become. Property management software can make it easy to stay organized and on task. Property managers may even operate condominiums where the majority of tenants own their units. In this case, property managers help coordinate maintenance and upkeep of common areas using HOA funds.
Property managers will also coordinate with real estate agents to show their houses or units in order to attract residents. Marketing is extremely important for property managers, as many potential tenants search for new homes online without the help of real estate agents. If no one knows that a property is available for rent, the odds of it becoming rented quickly become quite slim. Vacant properties don’t bring in money, so it’s in a property manager’s best interest to fill vacancies quickly.
Best property management software in 2019
Property management software can help a property manager stay miles ahead of the curve. Here are three top examples organized by G2 score as of Jan. 17, 2019.
1. AppFolio Property Manager
AppFolio Property Manager provides a complete solution for all property managers, including commercial and student housing managers. Property managers can manage maintenance, marketing, leasing and accounting all within a single platform.
Image courtesy of AppFolio Property Manager
- Online owner portal
- Reports and analytics
- Online maintenance requests
- Work orders
- Marketing tools
- Website builder
- Tenant screening
- Online leases
- Task management
- Residential: $1.25/unit per month
- Commercial: $1.50/unit per month
- Student housing: $1.25/unit per month
- Community associations: $.80/unit per month
What users say:
“Reporting, Universal Search, Customer Support. The ability to search all of AppFolio in their universal search bar is incredible. Doesn't matter if I need tenant, owner, property or specific unit info. I can access all of it very quickly. That plus the varied and detailed reports we can create are incredible. We used AppFolio when working at a 418 unit HOA. It was our first time with HOA management and AppFolio support was incredible. They worked with us to port over data from the old property management software system (TOPS) and did so in a way that was very convenient, quick and efficient. We felt supported throughout the whole process and were able to get the software online and activated very quickly. Once [the software was] up and running, we sent tenant and owner portal activation emails and were surprised at how quickly individuals adopted the online system. The reporting, the universal search and the customer care we received make AppFolio awesome.”
—AppFolio Property Manager review by Sam W.
2. Yardi Voyager
Yardi Voyager is a cloud-based property management system designed for large property management companies. With robust accounting features and the ability to automate workflows, Yardi Voyager provides flexibility so property managers can focus on their tenants.
Image courtesy of Yardi Voyager
- Centralized data
- Accounting tools
- Automated workflows
- Mobile access
- Search functions
- Marketing tools
- Online leases
- Resident services
- Available upon request
What users say
“Yardi Voyager is a versatile software that makes property management much easier. It allows us to keep track of work orders, payments, lease expirations and much more! I would highly recommend it! Yardi Voyager also works well in conjunction with other property management programs like Aptex, for example. You can access and print applications, notices, leases and work orders with ease.”
—Yardi Voyager review by Adam S.
3. Rent Manager
Rent Manager provides a customizable solution for property managers of any size building. The platform contains accounting, contact management, marketing, maintenance and mobile tools so property managers can have everything they need at their fingertips at all times.
Image courtesy of Rent Manager
- Online payments
- Two-way text messaging
- Loan manager
- Mobile apps
- Resident portal
- Metered utilities
- Available upon request
What users say
“We love Rent Manager software because it’s very user-friendly! If for any reason we get stuck on anything we just call the service line and get help, someone will hold our hand and walk us through the whole problem that maybe seem like a mountain to me and it’s just a little molehill! We also love that the software is very customizable, we are big on company branding, with Rent Manager our logo is on every form that leaves our office.”
—Rent Manager review by Olimpia G.
Next steps with property management in 2019
Real estate can seem complicated, but renting and property management are not as difficult as they appear once you become familiar with the more basic ins and outs. Becoming an effective property manager can come down to simply using the right tools to set you up for success.
To help you get started, check out 7 Best Free Property Management Software Solutions for 2019.