Deciding which property management software package is the right one to manage your multifamily property or portfolio is no easy task. There are more than 100 different packages on the market, each with its own features tailored to the needs of a particular market segment. Certain standard features and functions are contained in nearly all of the packages.
How a particular software program suits the needs of multifamily property managers depends both on the characteristics of the property and the ability of the software to capture all of the critical information pertaining to the property's performance and output it into meaningful reports.
The key to effective deployment of software solutions is to select tools that increase productivity, expand control over essential information vital to the property's performance, enable users to cut overhead, maintain and enhance data integrity and eliminate repetitive tasks.
Of growing importance is the ability to transfer data quickly between sites and the home office. As industry consolidation continues and the growth of apartment REITs lead to larger portfolios with centralized management, the need to share data broadly and expediently will be critical.
The first step in deciding which property management software is right for your situation is to compare the features of each prospective package vs. your organization's long-term objectives and business plans. This evaluation phase should include an audit of the particular needs of the class of properties in the firm's portfolio and a realistic assessment of the capabilities of the end users to learn and implement the software effectively. The time and cost for training, ease-of-use factors and need for technical support are important factors in making the final decision. It is also important to determine whether or not the software has the ability to grow with your company's needs.
In a marketplace more predicated on the speed of transactions, firms with the software and technology to leverage the information on their properties to execute key decisions and implement market action have a distinct competitive advantage. All of the data on leasing activity, market and demographic information, traffic and inquiry records, and financial reports should be output into customized reports that present property managers and owners with a hands-on, current perspective on their properties' performance.
One clear trend evident among the applications on the market is the expansion of offerings from stand-alone property management programs or individual modules to suites of applications that integrate such functions as executive inquiry, applicant screening, regulatory compliance and communications capabilities.
Ultimately what drives the choice of property management software is (1) how well the vendor executes the applications - were they designed primarily for multifamily use or thrown in as part of a "general" property management package? (2) cost - what is the total cost of ownership (including training, support, upgrades to hardware, software upgrades, etc.) and (3) ease of use -is the interface intuitive and easy to follow? Does the program reduce keying in of data and redundant tasks? Can you switch easily between related functions?
Market overview According to Michael Antonelli, president of Anton Systems Inc., a Fort Lauderdale, Fla.-based provider of information technology solutions to the real estate industry with offices in Atlanta and Dallas, the property management software market is divided into three main tiers, although these categories are not rigid and have considerable overlap.
"Tier one customers are your apartment REITs and large-scale portfolio owners and managers. These companies have the technical expertise, in-house information technology staff and the latest hardware," says Antonelli. "This group's needs are fairly sophisticated, and they find the software lags behind their current and rapidly changing needs. They want Internet solutions, electronic transactions, real-time data sharing - all of the cutting edge features available today or in development."
Tier two, maintains Antonelli, is comprised of middle of the road firms and properties. This group is satisfied with the current features and capabilities of property management programs. Many are moving to the Windows platform to gain further ease of use and broader compatibility. They're able to balance their technical needs and skill levels to gain productive improvements in their managerial practice.
The third tier - comprised of small owners and managers, single-property companies and mom and pop operations - find most of the software available too expensive, too complex for their needs and difficult to support without external assistance.
"The cost of property management software has doubled in the last few years," says Antonelli. The growing disparity between the needs of large companies and the smaller firms - plus the high cost of software and the technical expertise to run it - has opened up the market at the lower end to a whole host of new players. Outsourcing services, such as those offered by MRI, have become viable options for many firms seeking to contain costs.
Rent Roll maintains its lead For firms managing 120 multifamily units or more, Antonelli and other industry analysts note Rent Roll is the predominant package used. Currently, more than 25,000 properties use Rent Roll software, and many of its users are fee management firms that employ Rent Roll for their clients.
"Rent Roll is the most widely used and has matured through development and acquisition of leading software companies serving property management," says Antonelli. "Our clients tell us they like it because it relates to the way they manage their properties and matches their daily routines."
Since 1995, Rent Roll has been aggressively acquiring software companies, adding eight firms and their offerings to its roster of products. Based in Carrollton, Texas, Rent Roll is a wholly owned subsidiary of Computer Language Research Inc. (CLR). In February, CLR was acquired by The Thomason Corp. of Toronto. Rent Roll is widely acknowledged as the leader in software and services designed specifically for multifamily property management. The company offers products and services to handle the entire management process, including both affordable and conventional properties. The company's range of products address applicant screening, accounting, budgeting, property management, facilities, marketing and compliance reporting.
"We provide software for multifamily managers from four different product groups, including applications for home office, property management, compliance and applicant screening," says Leslie Turner, director of product marketing for Rent Roll's Home Office Software.
Rent Roll's DOS-based home office products address accounting, communications and on-site functions. Its Windows-based home office application, called InSite Portfolio, is an advanced client/server-enabled executive information system capable of importing data from Rent Roll 2000 or Rent Roll's InSite Property Management. This highly flexible program allows detailed performance data to be looked at in various ways, including organizational as well as property levels, and has extensive drill-down capabilities.
"The second release of InSite Portfolio, due out by the first quarter of next year, will be able to capture accounting data and function in a remote client/server environment, including Internet capability," said Turner.
Rent Roll's Property Management products group includes Rent Roll 2000, the firm's century-compliant flagship DOS application, which serves as both a complete property management and an accounts receivable system for affordable and conventional multifamily properties. Its Windows version is called InSite Property Management.
To meet the demands of compliance reporting, Rent Roll offers its DOS 2000 compliance series to meet HUD and RHS reporting requirements. InSite Tax Credits is the company's first Windows-based product for affordable housing. Rent Roll is also one of the first property management applications to integrate applicant screening software into its core property management programs, and also offers applicant screening on a stand-alone basis.
Yardi keeps its pace Santa Barbara, Calif.-based Yardi Systems Inc. has earned a solid niche in property management software. Designed primarily for property management firms, Yardi Property Management is currently used at more than 13,000 installations. Yardi's property management components are built around a strong core accounting program. Key strengths of Yardi's applications include an open architecture system with broad compatibility and OBDC compliant database structure. Data housed in the program can be easily exported, queried and extracted.
According to Karen Edgar, director of marketing at Yardi, the company is developing stronger interrelationships between its asset and property management applications including its suite of general ledger and accounts payable and receivable programs. The company also offers extensive audit controls and comprehensive reporting tools.
"We're seeing more demand for asset management and data warehousing capabilities integrated with property management," says Edgar. "These two strategic areas are becoming more unified in the thought processes of today's owners and managers."
Yardi also offers tax compliance and HUD reporting products. One of its newest products, Voyager, introduced last year, is a web-based browser application that enables client/server and remote office reporting and analysis over the Internet using secure communications protocols.
A different approach Last spring, Timberline Software Corp., based in Beaverton, Ore., released its third-generation property management software, the Gold Collection for Property Management. The software is graphical and, unlike its competitors, it is predicated on leasing as the foundation for the application. In all other respects, Timberline offers a comprehensive, home-office package with fully integrated accounting and lease management applications.
Timberline's Gold Collection uses a unique data structure that places the lease document at the center of the program, making it a separate, independent record. This is a decisive departure from the strategies of traditional unit-based and tenant-based property management software. Lease-based design allows Timberline's Gold software to adapt to any lease arrangement, including tenants with multiple leases, leases covering multiple units and leases applying to more than one tenant.
As an industry leader since 1971, Timberline has earned widespread industry recognition for the quality of its software. More than 28,000 customers worldwide use Timberline's software, and Timberline's SitePro software has been widely used by multifamily managers. However, last fall CLR's Rent Roll and Timberline signed an agreement to provide a clear migration oath for users of Timberline's SitePro to Rent Roll's year-2000 compliant property management systems. Timberline no longer distributes SitePro to new users but continues to support current users until the end of the year. Rent Roll and Timberline have interfaced their new systems so that home-office users of Timberline's Gold Collection can use data from both Rent Roll 2000 and its InSite property management systems.
Designed for Windows 95 and Windows NT 4.0, Gold is fully year-2000 compliant and contains applications for property management (lease management, billing and accounts receivable), general ledger, accounts payable, check management, payroll and information assistant. There are also three custom-design applications for reports, inquiries and financial statements.
The end of an era Consolidation among real estate software firms has kept pace with the real estate industry, demonstrating how closely knit the two industries are. At the end of March, Chicago-based Quantra Corp., developer of industry standard programs such as Pro-Ject and Skyline, was acquired by SS&C Technologies Inc. of Bloomfield, Conn. With this acquisition, SS&C owns a broad portfolio of leading real estate equity and debt investment management systems.
Quantra, which began as Melson Technologies, is one of the pioneers of specialized real estate software. At one time, Pro-Ject dominated the market and was widely imitated by competitors. It too grew through consolidation and acquisition and has been a major player since its founding.
The acquisition of Quantra seems to mark the passing of an era where small, innovative start-up firms emerge and introduce new technology that energizes the market and serves as a catalyst to its competitors. While, this type of environment still exists at the lower end of the property management market, the mid- to upper- range is becoming more stratified by large, powerful companies creating similar products and vying for the same customer base. SS&C will take over the following: Quantra's Pro-Ject for Windows, Skyline, Real Estate Management System, Portfolio Management System and the Mortgage Loan Management System. It remains to be seen what impact this will have on the rest of the market.
Skyline was the first system to employ Magnetic Ink Character Recognition (MICR) technology for low-cost, high-efficiency generation of check using standard laser printers. While Skyline is widely used by multifamily managers, Quantra's development efforts have historically placed more emphasis on home-office applications and commercial property management. Skyline offers powerful modules for management, accounting, reporting and analysis. The property management application interfaces with Skyline's financial system and reporting system modules to provide a comprehensive package for managing all types of multifamily properties.
MRI shifts focus Cleveland-based Management Reports Inc. (MRI) is one of the most experienced developers of property and asset management software. MRI places a strong emphasis on service and support and offers a comprehensive array of outsourcing services for firms that would rather invest in expertise than hardware and software.
MRI's residential property management system is a flexible and easy to use solution for managing any type of multifamily property. The application has a number of innovative features, including "rent roll recap," one of many summary reports designed for executive level management. A host of add-on modules cover all facets of multifamily property management, including HUD reporting, traffic reporting, work order maintenance modules and a lockbox interface that streamlines cash collection. With MRI's distributive processing module, users can flexibly control on-site processing capabilities and automate data transfer procedures to synchronize with home-office databases.
"Historically, MRI has placed more 'in-house' emphasis on its commercial applications than residential," says Ron McComas, vice president of marketing for MRI. "But that changed last year when we upgraded our residential applications. In outsourcing services, we've been the industry leader for some time but, in the multifamily arena, we're playing catch up. We've won some big clients, and we're working with some major apartment REITs."
IPM-Software moves to Windows Integrated Property Management Software, based in Pasadena, Texas, will move its existing customers to a Windows version later this year. The company specializes in affordable housing products in addition to a comprehensive line of property management, accounting, central office and on-site management applications.
The DOS version of IPM-Software is year-2000 compliant and offers a full-featured property management solution designed especially for multifamily use. To ensure maximum effectiveness of the product, IPM-Software involves property managers in the design of its applications. The software includes all the standard modules for accounting, resident receivables, ledger, maintenance, RHS and HUD compliance, and such modules as Tax Control and TRACS. In 1997, IPM-Software acquired HUD Control, which has been on the market for seven years and used in more than 450 installations.
"I think we're definitely creating 'cutting-edge' applications," says DeVaun Dickson, national sales director for IPM-Software. "By the end of this year, we're introducing a tax-credit product that will serve both conventional and market-rate properties. We're also developing an exciting product called Management Control, for the affordable housing market that allows managing agents to review all TRACS files being transferred from the site to the central office prior to submission to HUD. The program has built-in error checking protocols to help ensure accuracy."
Tenant Pro adds screening Signifying a major trend among developers of property management software, in March, Property Automation Software, developer of Tenant Pro for Windows, signed a deal with the Registry to integrate its RegAccess for Windows program for applicant screening. This will enable property managers to instantly check on applicants' prior rental histories, credit reports and criminal records. Users will also be able to check for previous landlord and tenant court filings.
"While applicant screening has been available for some time as a separate product, we're one of the few developers who have integrated it into their core product," says Jacob Garza, president of Richardson, Texas-based Property Automation Software.
Solidly entrenched in the midrange market, Tenant Pro for Windows is a comprehensive accounting and information management system in an all-in-one package as opposed to the modular offerings of some developers. Tenant Pro provides more than 120 financial and management reports to track property performance and includes such features as a built-in word processor, a lease generator, digital imaging and MICR check encoding. According to Garza, coming next will be the capability to do direct deposits and electronic funds transfer and OBDC compliance. Tenant Pro is year-2000 compliant and is currently in use at about 5,000 sites.
Tough decisions With more than 100 software packages available, multifamily managers face some tough decisions. Key factors in selecting property management software are cost, usability, adherence to accepted accounting standards, data integrity, compatibility and flexibility. Most of the developers cite a 486 as being the minimum requirement, but base Pentiums of 120 MHz or better are a more realistic choice for any real productivity now and in the next few years before the next wave of microprocessors raises the ante for everyone.