What Is Property Management Software?
Property management software is a specialized application used by property managers and landlords to organize and manage their properties and tenants effectively. The software provides a centralized platform to oversee all aspects of property management, tenant interactions, accounting, and trust accounting. Property management software also includes full trust accounting support for property managers renting properties on behalf of other property owners.
Some of the core features you will find in property management software include:
- Tenant Management: Keep a database with all current, past, and prospective tenants. Tenant data may include ledgers, rental history, lease agreement, payment history, and other pertinent information related to the tenancy.
- Rent Collection: Most modern software will provide you with the means to collect rent online. Tenants will be able to log in to a tenant portal or app to schedule their rent payments online from their checking or savings account (ACH) or by credit/debit card payments.
- Maintenance and Repairs: The software will facilitate keeping track of pending repairs to your properties. It may help in assigning repairs to vendors and/or allowing your tenants to report issues online via a tenant portal or app.
- Financial Management: Provides accounting tools for tracking income, expenses, security deposits, and generating financial reports. Some software solutions integrate with accounting software like QuickBooks.
- Vacancy Management: The software will keep you informed of vacant units, and upcoming vacancies and provide you the tools to list those vacancies online. Some software will allow you to accept rental applications online and also syndicate your listings to popular rental listing websites such as Zillow or Apartments.com.
- Document Storage: The software will safely store all documents and files related to the tenants, owners, and properties within the software. This may include lease agreements, property management agreements, tenant notices, property photos, and more.
- Communications: The software will let you easily communicate with your tenants and owners by email, text message, or phone. Most software have built-in tools to do bi-directional text messaging right within the platform.
- Online Portals: Many software solutions include tenant portals where tenants can pay rent, send maintenance requests, and access important documents. Some also include owner portals for property owners to view financial reports and other property-related data.
- Reporting: Similar to other accounting platforms, the software should provide you with reporting to
give you a full financial picture of the properties you are managing. In addition to accounting reports,
specialized property management-specific reports will be available that give you insights into your renters
and properties. Reports unique to property management software include:
- Online Payment Reports: show you all of your online payments, the payment channel, and the expected deposit date into your account.
- Tax Reporting: since landlords have specific tax reporting requirements, the software should provide you with reporting to make filing taxes easy. This may include a Schedule-E helper report and/or 1099 assistant reports.
- Rent Roll: A rent roll report shows you exactly how much rent is owed at any given point in time.
- Move-in/Move-out Reports: Reports specific to your tenant move-in and move-out dates, along with lease expiration dates.
- Owner Statements: You will be able to print out specific reports for each property owner showing them a non-technical, but informative report of their property performance.
- Third-party Integrations. Some property management software integrates with third-party applications.
Popular integration options include:
- Electronic Signatures: Integrations into platforms like DocuSign or Dropbox Sign allow you to create templates that can include dynamic information such as tenant name, property address, rent amount, and many more and populate those forms directly to an electronic signature service for a legal signature.
- Showing Automation: Services like ShowMojo or Tenant Turner allow the information from your property management software to automatically populate the showing automation service.
- Cash Payments: Integrations with services like PayNearMe allow tenants to pay their rent in cash at any city in the US and the payment automatically reflects on the tenant ledger.
- Tenant Screening: Integrations into tenant screening vendors enable ordering of background reports on prospective tenants right within the software. Critical reports include credit report, FICO score, eviction history, and nationwide criminal reports.
- Inspections: Integrations with inspection software such as zInspector saves double-entry of property data as all the existing information in the property management software can be sent to the inspection application and the inspection information reviewed right from within the property management software.
- Bank Sync: Financial synchronization integrations with platforms such as Plaid enable connecting bank accounts and the transactions directly to your property management software ledger. This is useful for saving data entry and especially useful for reconciliation.
- Credit Reporting: Credit reporting integrations with software like Rent Reporters enables reporting tenant payment history to the credit bureaus.
- Rental Listing Syndication: Integrations with listing services allow the property marketing data from the software to be directly sent to dozens of syndication sites and published without double-entry.
- Automation: Automated transactions such as monthly rent, regular expenses. Automated reminders, lease renewals, and other routine tasks can reduce manual intervention and human errors.
- Security: Because the software acts as an accounting platform and payment gateway, the system will offer you bank-grade security options including: Multi-factor authentication with passkey support, automated multi-region data backups, security alerts to unauthorized access, and access controls for individual users.
- User Administration: Provides the means to set up all your staff with unique login credentials and permissions so each staff has access to only the functions of the software they need to do their job, and no more.
- 1099 e-Filing: The ability to electronically file your 1099-NEC and 1099-MISC forms using the information already present in the software. The IRS now requires all property managers to file 1099 forms electronically, so doing it from the software that already contains the data saves a tremendous amount of time and saves errors.
- Website: A professional website for you to advertise your property management business online that includes your available properties and contact information.
- Electronic Owner and Vendor Payments: You will be able to electronically transmit funds to vendors for services rendered, and to owners for their property distributions.
- Support: Modern SaaS solutions include support as part of the monthly subscription. Although the quality of the support varies widely among different vendors, it is a vital component of a modern SaaS platform.
- Continuous Updates: Modern SaaS software is also being continuously updated and enhanced and these updates are automatically delivered to the software user the next time they log in.
- Three-way Reconciliation: Three-way reconciliation is supported in major property management software platforms and required by most states when managing rentals on behalf of other owners.
How does property management software differ from typical accounting software, like Quickbooks?
Quickbooks is considered a general-purpose software for accounting and works with a wide variety of industries, including property management. There are many property managers that use Quickbooks for maintaining their financial records. The big difference in a property management-specific solution is that the property management software will include features designed specifically for property management whereas Quickbooks and other accounting software do not. Some examples of this include:
- Property management software includes tenant and owner portals which allow tenants and owners their own log in to view their data and make payments. Standard accounting software does not.
- Accounting tasks in property management software are often much simpler and require less steps than in a general accounting software. An example would be accepting a tenant payment in property management specific software only requires one step and the software takes care of the additional transactional related entries in the background. The same transaction in general accounting software may take 3-4 steps.
- Property management software is designed to allow you to easily pay owners with as few steps as possible. Some software will even provide a wizard which automatically calculates how much the owner is owed, transmit those funds to the owner electronically, and automatically update all associated accounts. With standard accounting software, this may be as many as ten steps per owner.
- Property management software maintains industry connections with other software that works well for property managers so you can transmit your data to/from the property management platform and other services. This is not typically available in standard accounting software.
- While general accounting software is designed to be used by accounting professionals, most property management is easy to use and easy to learn so it can be used by a business owner, a property manager, or other less technical staff.
Both general accounting and software specific to property managers can effectively manage your transactions; however, property management software is specifically tailored to the needs of property managers and designed in such a way to save you time on everyday tasks. What might take 2 hours per day to do in a general accounting software may only take 5 minutes to complete in a good property management software application.
What is the history of property management software?
Property management software was first introduced in the late 1970s and early 1980s. During this time, computers were becoming readily available to larger businesses and businesses quickly identified that computers and software designed for property management could make their operation more efficient allowing them to scale like never before. For property managers they saw the opportunity to expand by hundreds or thousands more properties using the same number of staff, while simultaneously increasing margins, and reducing errors from manual accounting.
What did property managers use before property management software?
Before the widespread use of computers and specialized software, property managers relied on various manual methods to keep track of records and manage their properties. Here are some of the solutions, and challenges, used prior to the advent of property management software.
- Ledger Books - These were often large bound books with pre-printed rows and columns, where property managers would manually enter rent payments, maintenance costs, and other financial transactions. Because ledgers were contained in a physical book it could be misplaced or damaged and keeping a duplicate, or backup, set of books was very time-consuming. It wasn't uncommon for water and fire damage to wipe out an entire company's bookkeeping records which would leave them in quite a bind. To make a correction to a ledger it would be necessary to edit the line item, and then adjust every line item after the correction to fix the balance. In contrast, with modern property management software the data can be automatically backed up to multiple locations, and a ledger item can be edited quickly because the software will automatically adjust all future balances.
- Written agreements - Leases and rental agreements were handwritten or typed. Copies were obtained by using photocopiers, or carbon paper. Since they were physical documents, they too could be misplaced or damaged. In fact, unless documents were stored under the perfect conditions, the ink and carbon would slowly degrade and eventually become unreadable. Many property managers have run into trouble when they could not provide a legible copy of an agreement. In addition, corrections to physical documents are time-consuming and messy. The typewriter made things easier and more legible, but it was still difficult to make larger corrections.
- Filing Systems - Property managers used filing cabinets to organize and store physical documents, including lease agreements, tenant applications, correspondence, maintenance requests, and other essential records. Filing systems required a lot of physical space, and because ink degrades over time the space had to be temperature and humidity-controlled in order for the documents to last. Managing a filing system was time intensive and took extra employees to manage, and there was also a risk of misfiling or losing the physical documents stored within.
- Receipt Books - For transactions like rent payments, a two-part receipt might be used. One copy was given to the tenant as proof of payment, and the other was kept by the property manager. Receipt books are even still commonly used today by many property managers and other industries when a payment arrives but cannot be immediately entered into a software system. Receipt books have the same issues and challenges as other paper based products in that they can be easily damaged or lost. Receipt books are required to be maintained and accessible in the event of a property management audit or internal reconciliation.
- Physical Calendars and Planners - To keep track of appointments, lease expirations, and maintenance schedules, property managers would use physical calendars, planners, and daybooks. Physical calendars had many limitations which have entirely been solved by software in recent years. Physical calendars were not portable, and therefore, you could not reference your calendar unless it was physically in front of you. Physical calendars also have no notifications, so extreme care had to be taken to remember each appointment. Additionally, it was challenging to make a backup of a calendar, and in the event the calendar was damaged or misplaced the entire future schedule of the employee (or office) would be lost.
- Typewriters - Before computers became widely available, typewriters were used to prepare lease agreements, notices, letters, and other documents. Typewriters were a huge improvement over written documents because they were easily readable by anybody, and there was no question about handwriting interpretation. Typewriters are still used today, but much less with the advent of computers and word processing. The drawbacks of typewriters were that it was difficult to make corrections, and each document had to be individually typed. In today's modern electronic world a document can be saved as a template, and data inserted into it quickly saving thousands of hours of work per year for the average property manager.
- Rolodex - This rotating file device was used to manage and store contact details for tenants, contractors, suppliers, and other contacts. A rolodex would typically have a card for each contact and often organized alphabetically, or by industry and then alphabetically. Because these were physical cards, often handwritten they suffered from the same drawbacks as all other physical paper products. They could be lost or damaged, and it took more effort to update or correct them. It was also not easy to share a list of contacts in a Rolodex.
- Duplicate (carbon copy) Forms - For various records, carbon copy forms were used so that multiple copies of a written document could be produced simultaneously. Carbon forms were a terrific, time saving invention; however, they had a number of drawbacks. There was a limited number of copies which could be obtained, and often each copy was lighter and less legible than the original. Carbon forms often faded over time as well, especially when not stored in the perfect conditions.
These manual methods described above in the past required strict dedication and meticulous organization. They also required a lot of physical space. The introduction of computers and property management software dramatically increased efficiency, reduced errors, and made it easier to manage large portfolios of properties, but we're getting ahead of ourselves. Each of these historic methods had several disadvantages and problems.
Did property managers use other software prior to property management specific software?
Yes, when general accounting software became available it was widely used by property managers and was a huge time saver. General accounting software solved many of the issues presented above.
- Physical ledgers were replaced with electronic ledgers. This allowed near instantaneous corrections to take place and for the data to be backed up onto other computers or electronic media.
- Receipts could be saved and printed from within the software, removing the need for a receipt book and solving all the problems with receipt books.
- Filing systems were not entirely replaced by accounting software, but since ledgers could now be electronically stored it did save a lot of filing space.
Accounting software started to become available in the late 1970s and early 1980s. VisiCalc was the first spreadsheet
software and ran on the Apple II computer. The software was created by Dan Bricklin and Bob Frankston (ref) and is often
credited with bringing the first business application to the computer.
Also in the late 1970s, Peachtree Accounting was introduced. Peachtree went beyond a simple spreadsheet and was one of the very first accounting specific software applications. Peachtree was founded by Ben Dyer, Ron Roberts, Steve Mann, and John Hayes. Over the decades, Peachtree underwent numerous evolutions and was eventually acquired by Sage and became known as Sage 50.
Many larger organizations custom build accounting software to meet their own individual purposes and the features present in those custom systems were often similar to modern accounting platforms like Quickbooks and others. The costs to develop and maintain an application at this time were excessive so this option was only available to the largest organizations in industries like healthcare, education, government, and financial services.
A name most are familiar with today, Quickbooks, was developed by Intuit and was introduced in the 1990s. Quickbooks was preceded by and based on the Quicken code base which initially was not welcomed very well by the accounting industry as it did not have many necessary features and controls.
Later versions of Quickbooks rapidly became one of the most popular accounting platforms for small-medium sized businesses which included the vast majority of property managers. Quickbooks rose high in popularity, despite having heavy competition, because it had a user-friendly interface, aggressive marketing, and continuous development with annual improvements. Among small to medium size businesses, Quickbooks is still the most dominant accounting software.
In 2014 Quickbooks released Quickbooks Online which was their SaaS version of the existing desktop Quickbooks software. The SaaS model provided Intuit with numerous benefits to the desktop model, including instantaneous delivery of new features and bug fixes, a lower cost entry point for small businesses, and a monthly recurring billing model which significantly improved their profit margins. Intuit encouraged, and eventually required, most small businesses to transfer to the Quickbooks Online platform and the desktop software remained exclusively available for enterprise customers and eventually came with only an annual subscription option.
Although Quickbooks dominated the small business market, there were many notable alternatives available.
- Peachtree Accounting: Peachtree was recognized for its comprehensive features, which were sometimes considered more robust than QuickBooks in the early years. In 1984, Peachtree was ranked by InfoWorld as the seventh largest microcomputer software company in the world. Peachtree was subsequently purchased by the Sage Group in 1998 and is now called Sage 50 Accounting.
- Microsoft Money: While primarily known as a personal finance software, Microsoft Money did offer many features that worked well for small business owners. Its brand recognition, due to Microsoft's name, made it a notable competitor in the personal and small business finance software space. Microsoft discontinued the product in 2009.
- MYOB (Mind Your Own Business): MYOB had a heavy presence in Australia and New Zealand, but also made inroads into the US accounting market as well as other regions. MYOB was a strong software that had a user-friendly interface, custom tax localization options, and would easily scale from small businesses to large. MYOB remains a strong software in today's accounting software industry claiming to support over 500,000 small businesses.
The emergence of specialized software for property managers.
By the 1990s, software developers began to create specialized property management software that catered to the unique needs
of property managers. These solutions helped managers keep track of rent rolls, maintenance requests, and lease agreements.
In addition, the rise of the internet meant that software could be networked, allowing for better communication between
property managers and tenants.
Some property management software companies that were either founded in the 1990s or gained significant traction during this period include:
Yardi Systems: Yardi may be considered
the pioneer to modern property management software. Yardi was founded in 1984 by
Anant Yardi, with a DOS based application called Yardi Classic that provided core property management and accounting features.
The 1990s were a transformative decade for Yardi. They evolved from DOS-based solutions to launching their Windows-based product,
Yardi Genesis, in this decade. Yardi Genesis was a desktop application that ran locally on a computer or server. Later,
Genesis2 was released which was a web based application with an upgraded feature set that included internet connectivity,
better reporting, more integrations, and a much more user-friendly web based interface. Yardi also released Yardi Voyager
in the late 1990s aimed at the enterprise market which encompassed medium to large property managers.
In 2018 Yardi deployed another product named Yardi Breeze which was a significant refresh over Yardi Genesis and aimed at small-mid size property managers. Subsequently, Yardi encouraged their Genesis customers to switch to the Breeze platform.
RealPage: RealPage was founded by
Steve Winn in 1998
as a result of the acquisition of Rent Roll, Inc, an existing
on-premise software solution for property managers. RealPage emerged as one of the largest providers of software for
multifamily property managers and remains so today. One thing that sets RealPage apart is a heavy use of data analytics
such as Market Analytics, LeaseLabs, and YieldStar which assist property managers in setting prices, among other tasks, by
using aggregated large amounts of data to help identify price targets and assist property managers in setting lease rates.
One of RealPage's growth strategies is to grow by acquisition. RealPage has purchased numerous companies over the years including other prominent software companies in the property management space. These acquisitions include OneSite, Propertyware, and Buildium among about a dozen others. In 2010, RealPage became publicly traded on the NASDAQ stock exchange; however, in 2021, RealPage was acquired by Thoma Bravo, a private equity firm, for an estimated $10.2 billion and transitioned back to a private entity. Thoma Bravo continues to operate Realpage and its subsidiaries.
MRI Software: MRI Software was founded in 1971
by Fred and Sid Goodman and was then known as Management Reports
Incorporated. Like Yardi, the 1990s was a significant period for them as more businesses became digitally aware.
During the 1990s, MRI Software expanded its software to cater to a broad range of real estate segments, including
residential, commercial, and more. In 2002, Intuit purchased MRI Software and further expanded and modernized the
platform. A short time later, in 2009, the company was again sold
to Vista Equity Partners, a private equity firm
and then again sold to GI Partners in 2015.
In the 2010s, MRI Software acquired numerous firms in the property management space to grow their company through acquisition. Some of these companies include: ProLease, MDS (Multifamily Data Set), RAM (Real Asset Management) and Qube Global Software. Most of the acquisitions swerve UK based companies which assisted MRI with their global expansion.
Like many other companies in the space, MRI has transitioned from primary on-premise based installation to a cloud based SaaS (Software as a Service) solution. This enabled MRI to easily expand globally and embrace the benefits of the modern web.
Promas: Though founded in the 1980s as a DOS-based program, Promas became more notable in the 1990s with its property management application designed for the Windows operating system. Promas was founded by Bob Lefebvre who had a desire to create software to cater to the specific needs of property managers. Promas was designed to cater to both commercial and residential property managers. Promas software made a strong point to cater to customers one-on-one, which included specific customizations. Although Promas is one of the oldest and longest active property management software solutions, they work with approximately 3,000 customers which is very small in the scope of the available market.
Rent Manager: Rent Manager was created by London Computer Systems (LCS), a company founded by Dave Hegemann in 1987.
The software was initially designed as a tool to help manage Hegemann's own properties. Although Rent Manager began
as a DOS based program, in the 2000s, like many others, Rent Manager transitioned to a web based SaaS (Software as a Service)
platform and called the new product Rent Manager Online.
One of the compelling reasons many property managers have chosen Rent Manager is its customizability. Rent Manager offers customizable reports and integrations, which isn't found in many other platforms. Rent Manager has emphasized the importance of user training and support. They introduced Rent Manager University, a comprehensive training system, regular webinars, an annual user conference, along with other support mechanisms.
TOPS Software: TOPS was founded in 1985 and was aimed at providing management software for HOA (Homeowners Associations), condominiums, and other community management companies. Although established in the mid 1980s, TOPS became more prominent in the 90s, evolving with the technology of the time. Later, TOPS embraced the cloud and transitioned to focus on their TOPS ONE platform which is still in use by many community associations today. TOPS Software is now known as Enumerate.
These companies, along with numerous others, began to shape the property management software industry during the 1990s. As the internet started to become more commercialized and computer usage increased among businesses, the foundation for the SaaS boom of the 2000s was laid.
Cloud Based Property Management Software (SaaS).
The 2000s marked the rise of Software as a Service (SaaS) platforms.
The property managers and landlords using software
had mobile occupations, and therefore started migrating their preference over to cloud based applications. Software as a
Service quickly gained a lot of popularity because it met the needs of the current digital world. Significant differences
in SaaS involve the billing and service components. SaaS is typically billed on a regular monthly or yearly basis at a rate
much lower than buying on-premise software outright. That service fee compensates the software company for regular updates
to the software along with customer service and training. It became more common during this time frame for companies to
focus on excellent customer service since the buyer was paying for it as part of their monthly fee.
This decade also saw the introduction of online portals where tenants could pay rent, submit maintenance requests, and communicate with property managers directly either via a tenant specific website (often referred to as a Tenant Portal), or a dedicated mobile app. Several SaaS property management software companies emerged in the 2000s. While this list may not be exhaustive, here are some of the notable companies that were founded during this decade:
Buildium: Buildium was founded in 2004 by Michael Monteiro and Dimitris Georgakopoulos as a cloud based platform that
was initially bootstrapped, but subsequently received $85
million in venture funding ($20 million from K1, and $65 million
from Sumeru Equity Partners) in order to continue operating and grow their business.
These founders knew firsthand the challenges of managing properties and wanted to create a platform to address those challenges. The initial focus of Buildium was aimed at residential managers and to simplify tasks like rent collection, leases, and maintenance. The software, being web based, was designed to be intuitive so almost anybody could use and learn the software. Seeing an opportunity for expansion and a vacancy of options supporting HOAs, Buildium built in support and features to accommodate homeowners associations.
In 2015, Buildium acquired All Property Management, which was a digital marketing service for property managers. This provided instant means for Buildium to expand by offering their software tools to the existing property management base of All Property Management. All Property Management still operates as a search engine for property owners to find property managers.
In 2019 Buildium was acquired by RealPage, becoming a RealPage subsidiary, in an acquisition estimated at $580 million. At the time, Buildium indicated that they supported 17,000 landlords and 2 million units. RealPage at the same time served 16.8 million units.
Buildium primarily services the mid-large tier property managers with pricing starting at $174/mo, plus setup fees, for their all-inclusive product.
AppFolio: Appfolio was founded in 2006 by Klaus Schauser
and Jon Walker, with $30 million in venture capital startup
funds. The company was established with a vision to provide modern software solutions for residential rental markets.
Their first product was property management software, tailored for residential, commercial, and community association
management which quickly became a significant competitor to Buildium which was founded just a couple years prior.
Appfolio went public in 2015 and was listed on the NASDAQ with an estimated value of $330 million. Although Appfolio falls squarely in the company of the other mature applications (Rentec Direct, Buildium, etc.), Appfolio made a unique, and highly profitable, move to begin charging transaction fees to tenants for eChecks in 2023 (also see Fees can make your rent even higher). This was unique and a first in the industry for an established platform since traditionally software in this space only charged their customer; not the customer of the customer. However, as discussed below in The Evolution of the SaaS Property Management Software Industry, in order to find new revenue sources some organizations put the billing burden on the tenant instead of the property manager. In the case of Appfolio, they bill both the property manager and the tenant.
Appfolio currently services approximately 19,000 property management customers.
Appfolio targets the mid-large size property managers with an entry price of $280 per month, plus setup fees and a required one-year contract.
Rentec Direct: Rentec Direct was founded by Nathan Miller in 2007 and offers cloud-based property management software
and tenant screening solutions for landlords and property managers. The founder, a landlord himself, needed software
that was easier to use and designed for the small to medium landlord in mind, and in 2007 none existed that fit his
criteria. Rentec Direct was designed initially to service the private DIY landlord community with their Rentec Pro
platform. Later, property managers learned of Rentec Direct, and upon a steady stream of requests from property managers
using alternate platforms, Rentec Direct created Rentec PM which added features needed by property managers including
trust accounting and owner management.
A unique fact about Rentec Direct is that it is the only major software company in the space that did not seek or receive any venture funding. As such, Rentec Direct is entirely self-funded, debt free, and controlled entirely by the founding members and their clients. Although self-funded and organically grown, Rentec Direct has maintained a position on the INC 5000 fastest private growing companies in America for seven consecutive years, which exceeds all other companies in the space. Rentec Direct has achieved this by being customer focused, designing the software to the exact specifications that their customers have requested, while maintaining award-winning customer service.
In 2022, Rentec Direct acquired TrueRent to simultaneously improve the software experience of trueRent customers, and to grow the Rentec Direct customer base. Rentec Direct currently services over 17,000 property managers and landlords in the United States.
Rentec Direct targets US-based small to mid-sized (1 - 2500 units) landlords and property managers with an entry price of $45 per month, with no contracts or setup fees.
Discover what Rentec Direct PM can do for your business.
Propertyware - While technically founded in the late 1990s by Sina Shekou and Adam Silverthorne.
Propertyware began to
make its mark in the 2000s with its cloud-based single-family property management solutions. The founders aimed to
create a comprehensive property management solution tailored to the unique requirements of single-family rental
owners and operators. Under their leadership, the company developed its software to cater to this specific segment
of the real estate market, eventually gaining significant traction and garnering the interest of RealPage acquisitions.
RealPage acquired Propertyware in 2009 and integrated into the RealPage suite of products. At the time of acquisition, Propertyware supported approximately 2,000 property management companies.
Propertyware is still run as an independent application of RealPage, and targets the small-medium size property manager market with an inclusive entry price point of $350 per month, plus setup fees.
The SaaS model and cloud computing really began to pick up steam in the late 2000s. Many companies, even if they were established earlier, started transitioning to the SaaS model during this decade. Additionally, several smaller startups might have emerged during this period but did not achieve significant market share or recognition.
The Evolution of the SaaS Property Management Software Industry
After 2010, word spread like wildfire among many venture capital and software firms and dozens of new property
management software applications sprung to life working to capitalize on the property management industry. During
this time, the dominant players from the previous decade (Rentec Direct, Appfolio, and Buildium) were still extremely
relevant and getting the bulk of the new property manager market share, estimated at 4.3 billion. Also, all three of
these dominant platforms had made significant investments in modernization and therefore had the benefits of both
software maturity, industry stability, but also modern easy to use web based interfaces.
Because of this, new entrants into the market often needed to identify new ways to stand out and attract market share. One of the most common ways this occurred was to switch the billing on to their customers' customer, the tenant. This was done by providing the software for free, or at a significantly reduced cost, to the landlord while instead billing the tenant for fees ordinarily paid by the property manager such as payment processing fees, or tenant screening costs. This method proved very attractive to the startup landlords who needed to keep their costs down at all costs, but rarely gained traction with larger landlords or property managers who wanted to maintain a more professional appearance.
Here are some of the more notable software startups during this period. There were dozens of other startup companies, but most did not reach sufficient market share to be recognized.
Zumper: Founded in 2012, Zumper started as a rental listing site but expanded its offerings, including tools for landlords and property managers, such as rent collection and tenant screening.
Avail: Founded in 2012 as Rentalutions, Avail provides tools for DIY landlords, covering aspects like listing syndication, tenant screening, lease signing, and rent collection.
TenantCloud: Launched in 2014, TenantCloud provides a cloud-based property management software solution for landlords and property managers, offering features like accounting, communication tools, and listing services.
Hemlane: Founded in 2014, Hemlane provides a platform for real estate professionals focusing on property management. Their toolset includes rental advertising, tenant screening, lease tracking, and more.
Innago: Founded around 2016, Innago offers a platform for small-to-midsize property managers and landlords. Features include online leasing, payment collection, and tenant screening
Stessa: Founded in 2016, Stessa provides a streamlined solution for real estate investors to track and manage the finances of their rental properties, making it easier to gauge performance, prepare for taxes, and make informed investment decisions.
Rentvine: Founded in 2019, Rentvine leaned on the experience gained during the previous decade building websites for property managers and designed a property management software application which was intended to compete directly with the current industry leaders.
DoorLoop: Doorloop was founded in 2020 and offers cloud-based property management software with features like accounting, tenant and lease tracking, and property maintenance.
Mobile Revolution and Integrations
The widespread adoption of smartphones and tablets meant that property management software had to adapt. Many companies launched mobile applications, allowing property managers and tenants to manage their affairs on the go. Additionally, integrations became crucial. Property management software started to integrate with other software solutions like payment gateways, CRM systems, electronic signature solutions, showing software, and many other industry affiliated applications.
The Tenant Portal
As online payments started to become popular it became clear that there was a need for tenants to be able
to log in to a specific section of the software to view their account and make payments online. The tenant
portal came in various shapes and sizes, but most commonly it was provided either via a web based interface
or a mobile application.
The tenant portal provided the following features.
Online Rent Payments - Tenants can pay rent from anywhere at any time, eliminating the need to write checks or make in-person payments. Some tenant portals allowed ACH/eCheck payments, while others also included the ability to make payments with a credit or debit card.
Maintenance Requests - Tenants can quickly report issues or request repairs directly to their property manager. This provided an easy and secure way to send the information and pictures of the problem to their property manager, and even track the progress of the repair.
Tenant Ledger - Tenants can view their real-time accounting from the tenant portal which provides the tenant's information 24x7x365 and also provides transparency in the accounting process.
Documents and File Storage - The tenant portal makes it easy for the property manager to share files or agreements with the tenant in a secure method. Prior to tenant portals, it was common for managers to email documents, which was an insecure way to send sensitive information.
The Owner Portal
The owner portal, similar in many ways to the tenant portal, provides a property owner the ability to view the performance of their properties under management. Owner portals were typically accessed by the property owner either via a web interface or dedicated owner portal app on their mobile device.
Property Ledger - Owners are given real-time access to their property ledgers so they can immediately review the performance of each property they have under management. This provided a much needed layer of transparency for owners to see their data real-time.
Real-time Financial Reporting - Owners can view real-time income and expense reports, monthly statements, annual summaries, and other financial documents without the need to ask or wait for the report to be sent by the property manager.
Property Status - Owners can see and track the status of maintenance requests along with occupancy rates for the properties they have under management.
Electronic Payments - Although not mutually exclusive to the owner portal, most property management software that contains an owner portal feature also offers electronic payments to the owners. Electronic payments reduce errors and get the funds to the owner quicker than the traditional check, and they also save the owner from having to deposit checks monthly.
Documents and File Storage - Similar to sharing information in the tenant portal, the same can be done with the owner portal. The manager can optionally share files or agreements directly with the owner and keep those files secure.
AI (Artificial intelligence) in Property Management Software
In 2019, OpenAI introduced ChatGPT to the world, and this began to change everything. Property managers, and almost every other industry, quickly found uses for AI based technology to save them time or do things better. Here are some ways in which AI has affected property management software:
- Customer Service: Since most software includes customer service, many organizations have turned to AI to provide either a complete experience or partial support via AI. Service is often provided via a chat-bot which responds like a human to the user's inquiries. This has come with mixed feelings from the clients who previously were used to always reaching a human for support; however, in some cases it has been welcomed because the user may get an answer quicker from services who traditionally provide slower support response times.
- AI Generated Agreements: Some property managers have begun having AI write their agreements. This is a controversial idea because AI tends to aggregate information from across the internet to form its answers, and that information may not be entirely relevant, or legal, to the locale of the property manager.
- Listing Generations: It can take a good writer 10-15 minutes to write a compelling listing for a vacant property. Since properties may go vacant on average once per year, and a property manager typically manages hundreds of properties, that is a huge amount of time required just to write and update rental listings. Services like Rentec Direct's AI Listing Generator have taken what is otherwise a long task and reduced it to seconds.
- Simplified Workflows: Just like you can now speak to your car and say "Hello Car, turn on the Air Conditioner", it is becoming more common for software to simplify workflows by receiving a chat-like input and directing the user to the task. In 2023 Appfolio integrated AI into their software making it possible to ask the system to enter bills, maintenance requests, do chat-bot show scheduling, and other information based on an AI prompt. This still requires human review to ensure the data is correctly understood and entered properly.
- Tenant Screening: It's possible that AI will be helpful in identifying who is a good candidate for your vacant rentals. For example, Realpage uses AI to help with resident screening by using a predictive scoring model to help match tenants with properties by using the data within their proprietary database of over 30 million past leases.