The flood of property management software systems coming onto the market today is making it more and more difficult for a consumer to make an educated decision as to which product will best suit their needs. Here are five things to watch out for when shopping for property management software:
1. Vendors That are New to the Market.
It is a monumental task to design and test a comprehensive, enterprise level accounting system. Unless you want to be a guinea pig, stick to the companies that have been in the market for 10 years or more.
2. Companies Touting “Web Based” as a Main Selling Point
Self-service resident portals are great. Remote connectivity is a must. However, the backbone of your system must be a bulletproof bookkeeping, accounting and financial reporting engine. Online web portals are relatively easy to create and any system can be setup for outside remote access. Especially if you are a self-managed cooperative or condominium development, this can be an easy trap to fall into. The board falls in love with the pretty online resident portal and low price tag, while the professional managers get stuck holding the bag with a system that cannot handle the true work required to make things run smoothly on the back end. Ouch… Better questions to ask are: How do adjustments to tenants’ accounts affect prior period reporting? Can I generate a rent roll from last year and have it be accurate? Does the system handle cash and accrual simultaneous accounting? Do you print 1098’s for owners? Can I perform bank reconciliations on multiple bank accounts per entity? Are resident balances tracked in a true open item format? These are much more difficult, complex problems to solve from a programming standpoint and will affect your day-to-day operations more than the way your new system is being delivered to users.
3. Vendors Unfamiliar with Your Local Market
This will become obvious the first time you make a call for assistance and ask something like “how should I be tracking preferential rents for rent stabilized units?” If you have to explain what that means, you are in big trouble.
4. Unlimited Free Service
Well, like it or not, the truth is, you get what you pay for. There are plenty of vendors operating on the low end of the property management software market that sell their product cheap and include service for “free” or at ridiculously low rates. The fact is, robust property management software requires a good ratio of skilled technicians to users to ensure a high level of service. Free service is either unsustainable (aka, the provider will eventually go out of business) or extremely poor (“I had to wait a week for them to call me back, and when they did they couldn’t help me”).
5. Never Ending Annual Licensing Fees with No Option to Buy
Having the option of getting into a high-end system without tremendous outlays of cash upfront can be very attractive and in some cases makes sense. However, keep in mind that you may not want to pay these fees forever and that the longer you are on a system of this nature the more data you have to lose if you do eventually decide to change vendors. In my experience, it is very common for a client migrating to our product to keep their old system “alive” in the background in order to avoid the additional expense and hassle of converting every last bit and byte of historical data. Without the option to buy, you are left with the choice of kissing access to your history goodbye, paying for two systems simultaneously, or converting your data. Sure, you still own the raw database after discontinuing service, but it isn’t in a format that can be realistically accessed by an average user.
To be sure, it’s a jungle out there when you are new to the property management software market! Hopefully, avoiding these potential pitfalls will help you to choose a system that will be a good fit and long-term investment for your business for many years to come.