3 Technologies Changing the Way Landlords Manage Rental Properties

by | BiggerPockets.com

At $73 billion a year, property management (a.k.a. landlording) is a huge industry—and arguably the most important element of your investing activities. After all, the value of the asset directly correlates to how well you manage it.

To help investors do just that, a number of startups, platforms, and apps are popping up to help ease this process—and landlords and management firms are paying attention.

According to a survey by the National Association of Residential Property Managers, 88% of residential property managers have already adopted “dedicated cloud-based property management software.”

(Some even create their own own systems with a little bit of Google Doc and DocuSign in their lives. And sometimes a little Venmo’s all you need. *Lou Bega voice*)

Nowadays, most rentals are run by old landlords (58 years old on average, according to a recent property management panel here in New York that featured Vornado Realty Trust’s COO, one of the biggest landlords in the world).

And get this: According to Fortune, 95% of rental properties are run by “small businesses with less than $20 million in revenue and fewer than 10 employees.”

Related: 5 Real Estate Jobs That Have Been Made Obsolete by Tech (& 4 That Haven’t)

In other words, the next generation of real estate moguls may be right here on BiggerPockets. Crazy enough, according to that same aforementioned panel, some of the biggest landlords alive still use checks, faxes, and Yellow Pages.

(Seriously, a $21 billion landlord said this.)

In short, the industry is changing and property management is changing with it. Here are three platforms that are changing how investors—big or small—manage their properties.

3 Technologies Changing the Way Landlords Manage Rental Properties

1. AppFolio

What it is: The biggest company on the list, this SaaS property management service launched in 2007 targeting mid-to-large property managers. Founded by former “Entrepreneur of the Year” Klaus Schauser, AppFolio has raised $30 million total from private investors before going public at $74.4 million in 2015, a clear indication that the market has responded to their service.

Price: $.80 to $1.50 per unit per month, depending on property type with a $250 monthly minimum.

Pros: AppFolio allows you to meander across the spectrum of property management, whether it’s accounting, tenant screening, or rent collection.

Cons: Great for bigger property managers but may not be the perfect fit for a bootstrapped, startup real estate investor.

2. Buildium

What it is: Since its 2004 launch, the Boston-based outfit has eaten sizable market share from traditional property managers, racking up 12,500 customers as of 2016 with “one million residential units in 46 countries worldwide.” Has many of the same features as its aforementioned counterpart AppFolio, ranging from accounting to screening to rent collection.

Price: Ranges from $45 per month for 1-20 users to $560/month for landlords with over 500 units.

Pros: While it fits the big portfolio, it also has room for future moguls, with a cheap option for landlords with 1-20 users. A good, high-end solution that actually fits the investor with a couple of properties under their belt.

Related: 4 Ways Technology is Shaking Up Commercial Real Estate (& Why Multifamily Will Pull Ahead)

Cons: Yes, it fits the smaller investor, but it’s still an expenditure that can be avoided with DIY tech solutions. Or the option listed next…

3. Cozy

What it is: Cozy is the new kid on the block, opening up shop in March 2012. Seeking to fill a void in the property management software market, Cozy targets “independent landlords and small property management companies.”

Price: Free for landlords. (The company monetizes through paid credit checks and a 2.75% credit card fee.)

Pros: No doubt designed to fill the gap (and market) left unmet by Buildium and AppFolio, Cozy really provides a great solution for smaller landlord and beginning investors. In fact, I personally fired an expensive property manager to jump on this one. It gives you many of the same functionalities but is specifically designed to cater to the smaller investor.

Cons: Because it’s a “freemium” product, it deliberately discourages you from using the free payment option. (The people behind know that smaller landlords depend on rental income to service the mortgage so the free rent collection option really isn’t that great.) That said, the 2.75% fee is on par with any credit card provider—and far less than a gouging 10% property manager.

[A version of this article appeared on cre.tech.]

BiggerPockets fam, what are your favorite platforms and apps to manage your properties?

Share below!

About Author

Philip Michael

Philip Michael is the founder of New York Equity Group (NYEG), a 12-man investment company with $5M in assets and $25M in investor capital under management. When he’s not buying real estate, Philip moonlights as a TV/radio personality (Fuse, SiriusXM, Fox Sports) and hosts events and seminars to help young professionals build wealth through real estate. Follow Philip on Twitter at @Philip_Michael.

21 Comments

  1. Brad Simmons

    Nice summary of the three programs I see discussed the most.

    Is your beef with the free payment option on Cozy the 5 day delay? Is that what you mean by “they deliberately discourage you from using the free payment option” ?

    • Philip Michael

      There’s no “beef”, Brad. Cozy is my favorite option out of the bunch. I love the interface, the way it’s set up — I think it’s the boutique landlord’s dream, honestly. Simply listing the pros and cons as I see them.

      And I get it, they have to have a business model to scale. And 2.75% is reasonable compared with credit card fees. But that doesn’t change the fact it does seem set up to encourage the paid option.

    • Philip Michael

      Jeb, I just looked it up. Judging from the features, this actually seems like a really solid option for smaller investors. They seem to be targeting a specific vertical similar to Cozy and choose to monetize through vendors. An interesting model…not sure how sustainable it is but seems like a great option! I almost feel bad I didn’t know, definitely would’ve included it in here. Thanks for bringing it up! Would love to hear other people’s experience with it.

      • Jeb Brilliant

        @Philip I haven’t used TenantCloud yet but like the interface I’ve seen. If Appfolio had a version for small time investors I’d probably give that a shot.
        I’m standoffish about managing my own properties specifically because I’m at a distance, I invest out of state. Though there are a few of us at my local BP meetup that would consider hiring someone to do the hands on stuff we can’t do from here and use a cloud service to self manage.

        • Amy Emmerson

          Hi Jeb, Philip,
          I have to jump in after reading your thread – do you two have any thoughts on Rentigo? (I was actually debating between them and Cozy.) I’ve just recently started using their service and so far so good, I’m happy, but would love to hear your thoughts on them too.

  2. Avi Garg

    Appfolio might be good for individual investors but it simply does not work for property managers. As an owner, I get no info on their portal to the point that I cannot even update my information. I have to email the PM for anything I would want to know. It does not even show if the tenants paid. I will only get to know if PM tells me or I see the end of the month reports.

  3. Amy Emmerson

    I’ve been using Rentigo. When I was looking around, I was debating between Cozy & Rentigo and decided to go with the latter since I remember reading somewhere that Cozy is actually free up to a certain number of units, so I went with Rentigo, since their claim is they’re always free (looks like they’re monetizing from the rent payment fees.) So far I’m happy with them.

  4. Chris Ayers

    Been using Cozy ever since they went to the free model and I am all for it.

    I only manage one rental myself and I and the tenants love it. Applications are easy. Credit checks are easy and you don’t have to worry about dealing with SSN’s. Fee collections are easy. Rent collection is easy (although waiting 5 days for your money isn’t fun although tolerable).

    For the smaller landlord it’s a no brainer.

  5. I just started managing for a new investor just getting started with a 14 unit building and a couple of single family homes. I set him up with TenantCloud, and for a freebee, I really can’t complain. It has a very easy setup,access through tenant or unit number, or general accounting where you can add charges for tenants, or invoices for vendors to track expenses. Sets up monthly charges per lease and posts late fees, with easy payment entry or online payment setup. Option for online app submission and lease signing (new) , and free vacancy posting. The only thing that is odd is it does not allow for a credit if there is an overpayment. This has to be done manually Has a limited amount of reports but basic rent roll and expense reports and no where to store everyday tenant notices (I use Google Drive for this ) Maintenance requests are done online…..It covers the basics very well, perfect for small investor to start with.

  6. Jerome Kaidor

    I have been writing my own software to manage my buildings. I’ve been doing this since 2006, and it has grown fairly elaborate. It’s written in Perl, as a secure website. My program

    * Tracks rents and maintains a ledger for each tenant. Rents can be entered from the manager’s laptop or cell phone. Rent charges are automatically accrued on the first of the month.

    * Does reports: How much did property X gross last quarter? Last year?

    * Organizes checkout of prospective tenants. When I’m happy with a prospective, it creates a 16-page rental
    agreement with a couple mouse clicks. When they move in, the software initializes their register and prorates
    rent for the day they moved in.

    * Organizes maintenance & repair – information from this module flows into…

    * Payroll! I use an external service for this, but they don’t grok Schedule E categories. My payroll module slices and dices every penny for the IRS. Gross, net, employee taxes, employer taxes – all categorized by percentage of hours.

    This past year, I have been integrating telephony into my programs. They can dial out to prospective tenants, references, vendors etc. They can also send them texts. I can also quickly and easily send a text “newsletter” to all the tenants of a specific property. “Pest control Tuesday! Call the operator at xxx-xxxx if you want service”.
    Having integrated telephony, I wrote a “contacts” app.

    I put in a system of usernames, passwords and privileges. This let me sluff off the daily booking of rents to my staff, and they do a MUCH better job of it than I ever did. They can also generate late fees or 3day notices with the click of a mouse.

    I found a web-based service that can send postal mail to people. Integrated that into my tools: I type text into a web form, and it formats it up into a PDF and sends it to the web-based service. A few days later, the tenant gets a letter in the mail.

    My software is surely not as slick as the professional offerings – I’m only one programmer, and I do it when I feel like it. But it reflects exactly how I do business, and if I feel a need for a feature, I just write it. Also, my business information is kept on my local network, behind its paranoid firewall, so I worry less about hacking.

    My wife has been urging me to commercialize my stuff – I try to explain that there BIG difference between personal-use software and software-for-sale. And there are already players in this space. And I am adequately
    compensated…. my software has turned my full-time property management job into maybe 10 hours a week part-time.

  7. Jenny Gremillion

    Unfortunately, I paid $399 for Quickbooks and then another $299 for the extra support. 🙁 Ir does not appear to be what I need for our 6 Rentals. I wish I had this info before I did that!! We currently collect rent via Venmo which is free!

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