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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.”
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
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.
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.
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…
What it is: Cozy (to learn more about Cozy, click here) 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 (to learn more about Buildium, click here) 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?