What Is Property Management Software?

What did property managers use before property management software?

Before the widespread use of computers and specialized software, property managers relied on various manual methods to keep track of records and manage their properties. Here are some of the solutions, and challenges, used prior to the advent of property management software.

• Ledger Books - These were often large bound books with pre-printed rows and columns, where property managers would manually enter rent payments, maintenance costs, and other financial transactions. Because ledgers were contained in a physical book it could be misplaced or damaged and keeping a duplicate, or backup, set of books was very time-consuming. It wasn't uncommon for water and fire damage to wipe out an entire company's bookkeeping records which would leave them in quite a bind. To make a correction to a ledger it would be necessary to edit the line item, and then adjust every line item after the correction to fix the balance. In contrast, with modern property management software the data can be automatically backed up to multiple locations, and a ledger item can be edited quickly because the software will automatically adjust all future balances.
• Written agreements - Leases and rental agreements were handwritten or typed. Copies were obtained by using photocopiers, or carbon paper. Since they were physical documents, they too could be misplaced or damaged. In fact, unless documents were stored under the perfect conditions, the ink and carbon would slowly degrade and eventually become unreadable. Many property managers have run into trouble when they could not provide a legible copy of an agreement. In addition, corrections to physical documents are time-consuming and messy. The typewriter made things easier and more legible, but it was still difficult to make larger corrections.
• Filing Systems - Property managers used filing cabinets to organize and store physical documents, including lease agreements, tenant applications, correspondence, maintenance requests, and other essential records. Filing systems required a lot of physical space, and because ink degrades over time the space had to be temperature and humidity-controlled in order for the documents to last. Managing a filing system was time intensive and took extra employees to manage, and there was also a risk of misfiling or losing the physical documents stored within.
• Receipt Books - For transactions like rent payments, a two-part receipt might be used. One copy was given to the tenant as proof of payment, and the other was kept by the property manager. Receipt books are even still commonly used today by many property managers and other industries when a payment arrives but cannot be immediately entered into a software system. Receipt books have the same issues and challenges as other paper based products in that they can be easily damaged or lost. Receipt books are required to be maintained and accessible in the event of a property management audit or internal reconciliation.
• Physical Calendars and Planners - To keep track of appointments, lease expirations, and maintenance schedules, property managers would use physical calendars, planners, and daybooks. Physical calendars had many limitations which have entirely been solved by software in recent years. Physical calendars were not portable, and therefore, you could not reference your calendar unless it was physically in front of you. Physical calendars also have no notifications, so extreme care had to be taken to remember each appointment. Additionally, it was challenging to make a backup of a calendar, and in the event the calendar was damaged or misplaced the entire future schedule of the employee (or office) would be lost.
• Typewriters - Before computers became widely available, typewriters were used to prepare lease agreements, notices, letters, and other documents. Typewriters were a huge improvement over written documents because they were easily readable by anybody, and there was no question about handwriting interpretation. Typewriters are still used today, but much less with the advent of computers and word processing. The drawbacks of typewriters were that it was difficult to make corrections, and each document had to be individually typed. In today's modern electronic world a document can be saved as a template, and data inserted into it quickly saving thousands of hours of work per year for the average property manager.
• Rolodex - This rotating file device was used to manage and store contact details for tenants, contractors, suppliers, and other contacts. A rolodex would typically have a card for each contact and often organized alphabetically, or by industry and then alphabetically. Because these were physical cards, often handwritten they suffered from the same drawbacks as all other physical paper products. They could be lost or damaged, and it took more effort to update or correct them. It was also not easy to share a list of contacts in a Rolodex.
• Duplicate (carbon copy) Forms - For various records, carbon copy forms were used so that multiple copies of a written document could be produced simultaneously. Carbon forms were a terrific, time saving invention; however, they had a number of drawbacks. There was a limited number of copies which could be obtained, and often each copy was lighter and less legible than the original. Carbon forms often faded over time as well, especially when not stored in the perfect conditions.

These manual methods described above in the past required strict dedication and meticulous organization. They also required a lot of physical space. The introduction of computers and property management software dramatically increased efficiency, reduced errors, and made it easier to manage large portfolios of properties, but we're getting ahead of ourselves. Each of these historic methods had several disadvantages and problems.

Did property managers use other software prior to property management specific software?

Yes, when general accounting software became available it was widely used by property managers and was a huge time saver. General accounting software solved many of the issues presented above.

• Physical ledgers were replaced with electronic ledgers. This allowed near instantaneous corrections to take place and for the data to be backed up onto other computers or electronic media.
• Receipts could be saved and printed from within the software, removing the need for a receipt book and solving all the problems with receipt books.
• Filing systems were not entirely replaced by accounting software, but since ledgers could now be electronically stored it did save a lot of filing space.

Accounting software started to become available in the late 1970s and early 1980s. VisiCalc was the first spreadsheet software and ran on the Apple II computer. The software was created by Dan Bricklin and Bob Frankston (ref) and is often credited with bringing the first business application to the computer.

Also in the late 1970s, Peachtree Accounting was introduced. Peachtree went beyond a simple spreadsheet and was one of the very first accounting specific software applications. Peachtree was founded by Ben Dyer, Ron Roberts, Steve Mann, and John Hayes. Over the decades, Peachtree underwent numerous evolutions and was eventually acquired by Sage and became known as Sage 50.

Many larger organizations custom build accounting software to meet their own individual purposes and the features present in those custom systems were often similar to modern accounting platforms like Quickbooks and others. The costs to develop and maintain an application at this time were excessive so this option was only available to the largest organizations in industries like healthcare, education, government, and financial services.

A name most are familiar with today, Quickbooks, was developed by Intuit and was introduced in the 1990s. Quickbooks was preceded by and based on the Quicken code base which initially was not welcomed very well by the accounting industry as it did not have many necessary features and controls.

Later versions of Quickbooks rapidly became one of the most popular accounting platforms for small-medium sized businesses which included the vast majority of property managers. Quickbooks rose high in popularity, despite having heavy competition, because it had a user-friendly interface, aggressive marketing, and continuous development with annual improvements. Among small to medium size businesses, Quickbooks is still the most dominant accounting software.

In 2014 Quickbooks released Quickbooks Online which was their SaaS version of the existing desktop Quickbooks software. The SaaS model provided Intuit with numerous benefits to the desktop model, including instantaneous delivery of new features and bug fixes, a lower cost entry point for small businesses, and a monthly recurring billing model which significantly improved their profit margins. Intuit encouraged, and eventually required, most small businesses to transfer to the Quickbooks Online platform and the desktop software remained exclusively available for enterprise customers and eventually came with only an annual subscription option.

Although Quickbooks dominated the small business market, there were many notable alternatives available.

• Peachtree Accounting: Peachtree was recognized for its comprehensive features, which were sometimes considered more robust than QuickBooks in the early years. In 1984, Peachtree was ranked by InfoWorld as the seventh largest microcomputer software company in the world. Peachtree was subsequently purchased by the Sage Group in 1998 and is now called Sage 50 Accounting.
• Microsoft Money: While primarily known as a personal finance software, Microsoft Money did offer many features that worked well for small business owners. Its brand recognition, due to Microsoft's name, made it a notable competitor in the personal and small business finance software space. Microsoft discontinued the product in 2009.
• MYOB (Mind Your Own Business): MYOB had a heavy presence in Australia and New Zealand, but also made inroads into the US accounting market as well as other regions. MYOB was a strong software that had a user-friendly interface, custom tax localization options, and would easily scale from small businesses to large. MYOB remains a strong software in today's accounting software industry claiming to support over 500,000 small businesses.

The emergence of specialized software for property managers.

By the 1990s, software developers began to create specialized property management software that catered to the unique needs of property managers. These solutions helped managers keep track of rent rolls, maintenance requests, and lease agreements. In addition, the rise of the internet meant that software could be networked, allowing for better communication between property managers and tenants.

Some property management software companies that were either founded in the 1990s or gained significant traction during this period include:

Yardi Systems: Yardi may be considered the pioneer to modern property management software. Yardi was founded in 1984 by Anant Yardi, with a DOS based application called Yardi Classic that provided core property management and accounting features. The 1990s were a transformative decade for Yardi. They evolved from DOS-based solutions to launching their Windows-based product, Yardi Genesis, in this decade. Yardi Genesis was a desktop application that ran locally on a computer or server. Later, Genesis2 was released which was a web based application with an upgraded feature set that included internet connectivity, better reporting, more integrations, and a much more user-friendly web based interface. Yardi also released Yardi Voyager in the late 1990s aimed at the enterprise market which encompassed medium to large property managers.

In 2018 Yardi deployed another product named Yardi Breeze which was a significant refresh over Yardi Genesis and aimed at small-mid size property managers. Subsequently, Yardi encouraged their Genesis customers to switch to the Breeze platform.

RealPage: RealPage was founded by Steve Winn in 1998 as a result of the acquisition of Rent Roll, Inc, an existing on-premise software solution for property managers. RealPage emerged as one of the largest providers of software for multifamily property managers and remains so today. One thing that sets RealPage apart is a heavy use of data analytics such as Market Analytics, LeaseLabs, and YieldStar which assist property managers in setting prices, among other tasks, by using aggregated large amounts of data to help identify price targets and assist property managers in setting lease rates.

One of RealPage's growth strategies is to grow by acquisition. RealPage has purchased numerous companies over the years including other prominent software companies in the property management space. These acquisitions include OneSite, Propertyware, and Buildium among about a dozen others. In 2010, RealPage became publicly traded on the NASDAQ stock exchange; however, in 2021, RealPage was acquired by Thoma Bravo, a private equity firm, for an estimated $10.2 billion and transitioned back to a private entity. Thoma Bravo continues to operate Realpage and its subsidiaries.

MRI Software: MRI Software was founded in 1971 by Fred and Sid Goodman and was then known as Management Reports Incorporated. Like Yardi, the 1990s was a significant period for them as more businesses became digitally aware. During the 1990s, MRI Software expanded its software to cater to a broad range of real estate segments, including residential, commercial, and more. In 2002, Intuit purchased MRI Software and further expanded and modernized the platform. A short time later, in 2009, the company was again sold to Vista Equity Partners, a private equity firm and then again sold to GI Partners in 2015.

In the 2010s, MRI Software acquired numerous firms in the property management space to grow their company through acquisition. Some of these companies include: ProLease, MDS (Multifamily Data Set), RAM (Real Asset Management) and Qube Global Software. Most of the acquisitions swerve UK based companies which assisted MRI with their global expansion.

Like many other companies in the space, MRI has transitioned from primary on-premise based installation to a cloud based SaaS (Software as a Service) solution. This enabled MRI to easily expand globally and embrace the benefits of the modern web.

Promas: Though founded in the 1980s as a DOS-based program, Promas became more notable in the 1990s with its property management application designed for the Windows operating system. Promas was founded by Bob Lefebvre who had a desire to create software to cater to the specific needs of property managers. Promas was designed to cater to both commercial and residential property managers. Promas software made a strong point to cater to customers one-on-one, which included specific customizations. Although Promas is one of the oldest and longest active property management software solutions, they work with approximately 3,000 customers which is very small in the scope of the available market.

Rent Manager: Rent Manager was created by London Computer Systems (LCS), a company founded by Dave Hegemann in 1987. The software was initially designed as a tool to help manage Hegemann's own properties. Although Rent Manager began as a DOS based program, in the 2000s, like many others, Rent Manager transitioned to a web based SaaS (Software as a Service) platform and called the new product Rent Manager Online.

One of the compelling reasons many property managers have chosen Rent Manager is its customizability. Rent Manager offers customizable reports and integrations, which isn't found in many other platforms. Rent Manager has emphasized the importance of user training and support. They introduced Rent Manager University, a comprehensive training system, regular webinars, an annual user conference, along with other support mechanisms.

TOPS Software: TOPS was founded in 1985 and was aimed at providing management software for HOA (Homeowners Associations), condominiums, and other community management companies. Although established in the mid 1980s, TOPS became more prominent in the 90s, evolving with the technology of the time. Later, TOPS embraced the cloud and transitioned to focus on their TOPS ONE platform which is still in use by many community associations today. TOPS Software is now known as Enumerate.

These companies, along with numerous others, began to shape the property management software industry during the 1990s. As the internet started to become more commercialized and computer usage increased among businesses, the foundation for the SaaS boom of the 2000s was laid.

Cloud Based Property Management Software (SaaS).

The 2000s marked the rise of Software as a Service (SaaS) platforms. The property managers and landlords using software had mobile occupations, and therefore started migrating their preference over to cloud based applications. Software as a Service quickly gained a lot of popularity because it met the needs of the current digital world. Significant differences in SaaS involve the billing and service components. SaaS is typically billed on a regular monthly or yearly basis at a rate much lower than buying on-premise software outright. That service fee compensates the software company for regular updates to the software along with customer service and training. It became more common during this time frame for companies to focus on excellent customer service since the buyer was paying for it as part of their monthly fee.

This decade also saw the introduction of online portals where tenants could pay rent, submit maintenance requests, and communicate with property managers directly either via a tenant specific website (often referred to as a Tenant Portal), or a dedicated mobile app. Several SaaS property management software companies emerged in the 2000s. While this list may not be exhaustive, here are some of the notable companies that were founded during this decade:

Buildium: Buildium was founded in 2004 by Michael Monteiro and Dimitris Georgakopoulos as a cloud based platform that was initially bootstrapped, but subsequently received $85 million in venture funding ($20 million from K1, and $65 million from Sumeru Equity Partners) in order to continue operating and grow their business.

These founders knew firsthand the challenges of managing properties and wanted to create a platform to address those challenges. The initial focus of Buildium was aimed at residential managers and to simplify tasks like rent collection, leases, and maintenance. The software, being web based, was designed to be intuitive so almost anybody could use and learn the software. Seeing an opportunity for expansion and a vacancy of options supporting HOAs, Buildium built in support and features to accommodate homeowners associations.

In 2015, Buildium acquired All Property Management, which was a digital marketing service for property managers. This provided instant means for Buildium to expand by offering their software tools to the existing property management base of All Property Management. All Property Management still operates as a search engine for property owners to find property managers.

In 2019 Buildium was acquired by RealPage, becoming a RealPage subsidiary, in an acquisition estimated at $580 million. At the time, Buildium indicated that they supported 17,000 landlords and 2 million units. RealPage at the same time served 16.8 million units.

Buildium primarily services the mid-large tier property managers with pricing starting at $174/mo, plus setup fees, for their all-inclusive product.

AppFolio: Appfolio was founded in 2006 by Klaus Schauser and Jon Walker, with $30 million in venture capital startup funds. The company was established with a vision to provide modern software solutions for residential rental markets. Their first product was property management software, tailored for residential, commercial, and community association management which quickly became a significant competitor to Buildium which was founded just a couple years prior.

Appfolio went public in 2015 and was listed on the NASDAQ with an estimated value of $330 million. Although Appfolio falls squarely in the company of the other mature applications (Rentec Direct, Buildium, etc.), Appfolio made a unique, and highly profitable, move to begin charging transaction fees to tenants for eChecks in 2023 (also see Fees can make your rent even higher). This was unique and a first in the industry for an established platform since traditionally software in this space only charged their customer; not the customer of the customer. However, as discussed below in The Evolution of the SaaS Property Management Software Industry, in order to find new revenue sources some organizations put the billing burden on the tenant instead of the property manager. In the case of Appfolio, they bill both the property manager and the tenant.

Appfolio currently services approximately 19,000 property management customers.

Appfolio targets the mid-large size property managers with an entry price of $280 per month, plus setup fees and a required one-year contract.

Rentec Direct: Rentec Direct was founded by Nathan Miller in 2007 and offers cloud-based property management software and tenant screening solutions for landlords and property managers. The founder, a landlord himself, needed software that was easier to use and designed for the small to medium landlord in mind, and in 2007 none existed that fit his criteria. Rentec Direct was designed initially to service the private DIY landlord community with their Rentec Pro platform. Later, property managers learned of Rentec Direct, and upon a steady stream of requests from property managers using alternate platforms, Rentec Direct created Rentec PM which added features needed by property managers including trust accounting and owner management.

A unique fact about Rentec Direct is that it is the only major software company in the space that did not seek or receive any venture funding. As such, Rentec Direct is entirely self-funded, debt free, and controlled entirely by the founding members and their clients. Although self-funded and organically grown, Rentec Direct has maintained a position on the INC 5000 fastest private growing companies in America for seven consecutive years, which exceeds all other companies in the space. Rentec Direct has achieved this by being customer focused, designing the software to the exact specifications that their customers have requested, while maintaining award-winning customer service.

In 2022, Rentec Direct acquired TrueRent to simultaneously improve the software experience of trueRent customers, and to grow the Rentec Direct customer base. Rentec Direct currently services over 17,000 property managers and landlords in the United States.

Rentec Direct targets US-based small to mid-sized (1 - 2500 units) landlords and property managers with an entry price of $45 per month, with no contracts or setup fees.

Propertyware - While technically founded in the late 1990s by Sina Shekou and Adam Silverthorne. Propertyware began to make its mark in the 2000s with its cloud-based single-family property management solutions. The founders aimed to create a comprehensive property management solution tailored to the unique requirements of single-family rental owners and operators. Under their leadership, the company developed its software to cater to this specific segment of the real estate market, eventually gaining significant traction and garnering the interest of RealPage acquisitions.

RealPage acquired Propertyware in 2009 and integrated into the RealPage suite of products. At the time of acquisition, Propertyware supported approximately 2,000 property management companies.

Propertyware is still run as an independent application of RealPage, and targets the small-medium size property manager market with an inclusive entry price point of $350 per month, plus setup fees.

The SaaS model and cloud computing really began to pick up steam in the late 2000s. Many companies, even if they were established earlier, started transitioning to the SaaS model during this decade. Additionally, several smaller startups might have emerged during this period but did not achieve significant market share or recognition.