Property Management Software is a Little Different From Real Estate Management Software

Property management software is typically for managing a portfolio of rental properties. Real estate management software is for real estate developers who sell residential and commercial properties and plots. The requirements of the two businesses are different and this is reflected in the software. We look at the features of property management software in this article and real estate management software in another article.

Rent Dues and Property Related Transactions

In property management software, the focus is on keeping track of rent and other tenant dues, and on accounting for all property related transactions. Property management software becomes worthwhile for these tasks when there are several properties to be managed. Both landlords and professional property managers will find the software an invaluable tool in such a situation. A portfolio of properties can consist of both residential and commercial properties. Many, if not all, of these properties can have multiple units, rented separately. Property managers would thus have to keep track of many units. The units could fetch different amounts of rentals, and the rent dues might fall on different dates. Keeping track of the dues month after month is going to be a little complicated in such a context.

Tracking Rent and Incidental Dues From Tenants

A typical solution for keeping track of tenant dues is to create a list of rented units with tenant, rent amount and due date details against each unit. As each tenant pays, the amount paid and date is marked against the unit. That way, the blank cells in the "paid" column quickly indicate the unpaid dues, and also shows which tenants are overdue. While it is possible to create such a list by hand month after month, it is much more effective to generate the list from relevant data using computer software. Payment details entered through the software can update not only this list, but also other accounts such as those of tenants and building units. The software can also automatically compute late fees when rent becomes overdue, and keep track of the payment of these fees also. It is also common to color-code overdue amounts, highlighting each overdue line in a different color based on how long it has been outstanding. Different kinds of recovery actions are typically needed for temporary short-term overdues and for longer period outstandings.

Accounting for Property Transactions

Properties require different kinds of expenses and payments, such as taxes, maintenance, mortgage interest and principal payments and so on. By keeping unit-wise accounts of the expenses, and comparing these with rental receipts, it will be possible to identify the profit contributions from each unit. This is typically done by maintaining separate accounts for each unit. All expenses and revenues relating to each unit are accumulated under relevant units. This option would also facilitate tracking the appliances kept in each unit, and the maintenance costs of these appliances. Accounts need to be maintained building-wise also, for ease of recording such payments as building taxes, insurance, mortgage payments and others. In the case of professional property managers, the buildings might belong to other landlords, and in this case their details, as well as their accounts, need to be maintained.

Accounting for Tenants

Tenants can come and go, and up-to-date accounts need to be maintained for each tenant. The accounts will show tenancy dates, rent and other dues from the tenant, and payments made by the tenant. Repair costs that are due from tenants are also accounted here. Additionally, contact, employer and other identifying details of each tenant are also maintained in these accounts.

Accounting for Maintenance

Work orders will typically be raised for maintenance and other property related works. The work contract rates are negotiated with vendors, who are then given target dates for completing the work. Details of these work orders need to be maintained and the dues and payments to vendors have to be accounted. Vendor performances will have to be reviewed and recorded.

Control Reports

While the details are maintained in the various accounts above, it is the reports extracted from these that provide real value to managers. There would be reports of overdue rents, color-coded for age, profitability reports by rental units and buildings, maintenance cost budget and performance comparisons and so on. It is the above kinds of accounts, records and reports that are facilitated by property management software. The work involved is routine, and is best done by computers and software.