Guide to Property Management Software Development for Real Estate

Nowadays, many real estate companies have a need for property management software development. Rapid digitalization and changes in customer behavior have had a significant impact on how real estate businesses manage daily operations.

On the one hand, business owners, property managers, and homeowners are looking for a cost-effective way to streamline internal processes and keep up with global changes. On the other hand, they are interested in winning the attention of potential prospects and standing out among competitors by adapting to new customer expectations. Modern property management software has become one of the technologies that helps users achieve both of these goals.

The shift from manual property management to automated solutions has become key to improving business productivity, ensuring excellent customer support, and reducing risks caused by manual business process management. As a result, demand for web tools that help with daily property management operations is constantly increasing.

There are a lot of players in the property management software market who offer various solutions to meet the needs of property owners and real estate businesses. However, off-the-shelf apps frequently lack customization, which creates problems for companies that have specific challenges. This issue is forcing real estate businesses to unlock the capabilities of custom software.

But how can you build real estate management software?

Whether you’re looking for an alternative to your current property management system, want to develop a custom system from scratch for your company, or plan to build software to sell to other companies, this guide will help you.

Below, we explain what property management software is, describe its types and features, and tell in detail about the advantages of custom solutions and how to build one for your business.

Benefits of developing property management software

Before talking about custom solutions, let’s answer the question: What is property management software? Property management software assists property managers and landlords with diverse tasks related to managing real estate, including accounting, rent collection, property repair and maintenance, listing generation, and marketing analysis. Overall, property management software (PMS) makes it easy to manage your property before, during, and after selling or renting it.

It’s also important to note that real estate property management systems are used not only by individuals who sell or rent property but by their customers as well. How convenient your system is for home buyers and tenants plays a big role in the software’s overall success.

There are already a lot of solutions on the market from leading companies that help real estate owners and agents manage properties. But off-the-shelf software sometimes can’t fully meet clients’ needs, and many companies choose to build custom solutions instead. Why is custom real estate management software development a good choice? Let’s take a look at a few advantages of tailor-made systems:

• Unlimited opportunities for customization. One of the main problems property management companies face using off-the-shelf software is limited customization. After using an app for some time, you may discover there are many unnecessary features. On the other hand, some critical features may not be available. And it’s usually difficult or impossible to customize third-party systems to your needs.

  A custom property management app, in turn, can be customized as much as you want. You can add or remove features as new needs arise instead of looking for and moving to new software.

• Scalability. A custom cloud-based app can be easily scaled up and down. If you need to increase storage space or upgrade your software, it can be done quickly and seamlessly. You won’t need to interrupt your business operations or wait for an upgrade, as you usually do with third-party software. Your custom housing management software can evolve with your needs as your business grows.

• Data safety. As you are the one who has control over the software’s security, you can ensure the best protection for all your data. With a custom app, you can apply all needed security measures to comply with specific security requirements and regulations, track access to your data by different users, and efficiently address potential issues.

• Opportunity to implement the latest technologies. Off-the-shelf software usually offers a solid set of basic features, but even with periodic upgrades it doesn’t let customers leverage modern real estate technologies.

  When you have custom software, you can implement the latest web development technologies that help you automate various property management tasks and significantly increase business productivity. For example, the Bricks and Agent startup founders say that using AI chatbots helped them enhance tenant support and reduce the time property managers spend on maintenance-related tasks by 70%. Using machine learning capabilities, implementing LLM, integrating with IoT devices, and leveraging other technologies can significantly improve customer support, help you tackle day-to-day operations and conduct market analysis, and so on.

Creating property management software for your company can bring a lot of benefits. You can make your software fit like a glove, and you can improve it as your business grows, eliminating the need to move from one software product to another.

Understanding property management software: types & modules

Real estate businesses have diverse needs, and likewise, there are many types of property management systems. To build good software, you need to know what types of digital property management tools exist, what features they provide, and how users access them. Below, you’ll find basic information you need to know about real estate management software.

Types of property management systems

Real estate property software can differ depending on the type of property it helps you manage. To know what type of software to develop, it’s essential to know the key differences and functions of all types. We can distinguish six types of property management systems: residential, commercial, industrial, hotels and hostels, homeowner associations, and special purpose. Let’s take a look at each of them.

Residential

The first type of software is for residential property management, meaning this software has everything needed to manage multi-unit buildings, apartments, houses, and other residential real estate. Property managers and landlords can leverage such software to automate the following tasks:

• Generating and marketing listings
• Finding and screening prospects
• Collecting rent
• Scheduling and tracking maintenance
• Gathering marketing data
• Effectively communicating with tenants

A property management app also covers various needs of tenants, allowing for:

• Signing lease agreements
• Automating utility bills and rent payments
• Notifying a landlord about the need for maintenance

Some examples of property management systems for the residential real estate sector are solutions provided by Buildium, MRI Software, AppFolio, and Yardi. These tools are popular among property managers, as they allow for automating tasks usually executed by managers manually and, therefore, significantly improve productivity.

Commercial

Another type of real estate management tool helps to manage commercial property (office buildings, retail spaces, etc.). The functionality of this software is focused on:

• Automating lease management tasks (from marketing to lease agreements and renewals)
• Coordinating and tracking regular maintenance
• Monitoring compliance with laws, regulations, and standards
• Tracking expenses, income, and payments
• Managing use of space

The key difference between residential and commercial property management software is its functionality for tenants. The main needs of residential tenants are making quick rent and utility payments, requesting repairs and maintenance, and renewing lease agreements, while commercial real estate tenants also use property management systems for controlling space utilization, providing employees and visitors with access to offices, tracking attendance, and quickly communicating between front desk workers and employees.

Popular commercial property management systems include DoorLoop, TenantCloud, and Entrata.

Industrial

For managing warehouses, distribution centers, and other facilities, there are industrial property management applications. While this type of software involves many activities similar to residential and commercial management software (such as tenant screening, communication, and accounting), it also focuses on the operating efficiency of industrial spaces. This means that such software helps property owners work with tenants to analyze and monitor space usage, workflows, and other factors essential for optimizing business processes.

There are not that many specific industrial property management tools. Companies typically use tools designed for commercial real estate, which cover basic needs. Or, they choose to create custom tools with all necessary functionality to effectively manage industrial spaces. Developing custom software for industrial property management can be a profitable solution, as you can offer your app to other companies in this niche and provide them with software that covers their specific business needs.

Hotels and hostels

In the hospitality industry, property management systems are critical to facilitate various front- and back-desk processes, ensuring an excellent customer experience and effective administration of hotels and hostels. This type of software usually includes many unique modules. Besides common modules for accounting, maintenance tracking and scheduling, reporting and analytics, and other needs, hotel property management systems have modules that help with streamlining administrative processes such as:

• Reservations
• Customer data management
• Room services
• Housekeeping

Some popular hotel management software is provided by Oracle, Maestro, Hostaway, and Cloudbeds.

Homeowners’ associations (HOAs)

Property management software for homeowners associations is distinct from residential property management software, as it helps homeowners and association board members, not property managers and tenants. This type of PMS simplifies and automates numerous tasks related to managing a neighborhood or multi-unit building. For example, association members can:

• Automate payments
• Send notifications and announce upcoming events
• Create financial reports and share documents with other homeowners
• Manage maintenance and architectural change requests
• Track violations and compliance issues

Some examples of HOA property management systems are Yardi Breeze, Condo Manager, and Condo Control.

Special purpose

The last group of property management systems we want to highlight is special-purpose real estate management tools. These are needed to manage educational institutions, healthcare facilities, sports arenas, and other specialized buildings and spaces.

When managing this type of property, the focus is on compliance with regulations and standards of a certain industry to ensure the safety and accessibility of buildings.

That’s why some essential features of special-purpose property management software are maintenance prediction, scheduling, and tracking, as it’s critical to ensure that everything meets end users’ industry-specific requirements.

As you can see, there are many types of property management software, and within one type apps can differ depending on what functionality their owners have decided to include. Apps for residential, commercial, HOA, and hotel property management are widespread, while there are not that many solutions for managing special-purpose and industrial real estate. By building an app for these niches, you can get more chances to succeed due to low competition and demand for specific software functionality that can help with managing industrial spaces, healthcare facilities, educational institutions, and other special-purpose properties.

Cloud-based versus on-premises property management apps

So, you’ve decided what type of property management app you want to build. The next thing to determine before you start rental property management software development is the deployment model. Depending on where your app is hosted, there are two deployment models: cloud-based and on-premises. Let’s find out the difference between them.

On-premises property management apps have the following characteristics:

• Should be installed on a user’s hardware to get access to the app’s functionality
• Provide excellent security, as software is accessible only from authorized devices
• Complicate use by tenants, as they don’t have access to your local network
• Require time for implementation, as software should be installed on each work device individually and hardware should meet certain technical requirements

On-premises software is good for in-house use to manage things such as specific-purpose properties that require strong security and regulatory compliance.

Now, let’s take a look at characteristics of cloud-based property management systems:

• Hosted on a public or local cloud (depending on whether you want to provide your solution to other companies or use it only for your company)
• Provide great accessibility, as property managers, landlords, and tenants can access cloud-based apps from any device with an internet connection
• Easy to implement, as the app is available in web format and doesn’t have any specific technical requirements for hardware
• Give you an opportunity to monetize your software. You can offer it to other companies with similar needs on a subscription basis using the software as a service (SaaS) model. There is great demand for SaaS solutions for property management nowadays. According to Strategic Market Research, 61.31% of property managers, landlords, and homeowners worldwide choose cloud-based property management software over on-premises

Cloud-based solutions are convenient for managing any type of real estate. It’s easy to deploy them, provide access to employees and tenants, make updates to them, and scale them as your business grows. Developing a cloud-based app can be beneficial whether you plan to use it within your company or offer it to others as a SaaS product.

Modules to implement in your rental property management system

Property management software is multifunctional and includes many modules that help to deal with various tasks. So before delving into the real estate management software development process, let’s clarify what modules your custom system can include. Here is a list of basic modules that can be included in any type of property management app:

• Marketing management — allows for creating listings and marketing vacant properties on real estate portals, gathering marketing data, screening prospects, and more
• Document management — allows you to store all documents related to property leases, payments, maintenance, and much more on your software so you can quickly access it and easily create reports
• Payments management — enables easier rent collection and spending tracking for landlords and property managers as well as automation of rent and utility bill payments for tenants
• Landlord and tenant portals — ensure effective communication between tenants and landlords/property managers
• Maintenance management — tenants can leave requests for repairs and landlords can track, schedule, and notify tenants about maintenance and inspections
• Accounting — helps to automatically create financial reports and track income and expenses
• Space management — usually used in commercial and industrial property management software to analyze and optimize space occupancy and usage
• Data analytics — property managers can view and analyze data on their property in a convenient format

There are many other modules you can implement in your software depending on your goals and needs. Proper research and analysis of the market and your business (done yourself or with the help of an IT consulting team) can help you choose the right modules and reduce software development costs.

How to develop a property management system: step-by-step guide

So, you’re considering building your own property management system. You have a great idea of building your own property management software but don’t know how to bring it to life, as it seems hard to build something from scratch.

Software development is not a simple process. But the good news is that developers have already paved the way to successful development, and all you need is to use their practices to ensure an efficient and smooth process. In this section, you’ll find out how to develop a property management system for real estate in six steps.

Step 1: Research, validate your idea, and create a plan

Every SaaS application development project should start with proper research and planning. Otherwise, how will you know your idea is actually good and what you need to bring it to life? According to Forbes Technology Council experts, lack of clarity in execution strategy, requirements, and problems that need to be solved with your software are among the most common reasons why projects fail.

Before development, you need to conduct research, validate your idea, and prepare a plan. This is also known as the discovery phase. It includes the following steps:

• Define your business goals and what problems you want to solve with your software. In the case of a custom property rent management system, you need to understand the disadvantages of off-the-shelf software. What problems do you or other users face using ready-made property management software? What does such software lack to solve your business challenges or the challenges of your potential customers? What ways are there to overcome those challenges? Answer these questions and set your business goals.
• Research competitors. This step is useful both for those who plan to develop property management system software for in-house use and those who plan to sell their SaaS product to other companies. By researching the target market, you can identify your competitors and their strengths and weaknesses. Sometimes, this step also helps you find out that there is already software that can solve all your business problems and you don’t need to build your own.
• Think about the value proposition. What will be unique about your software? What value will it bring to users?
• Decide on your software’s features and the tech stack needed to develop and implement them. The technical part is crucial for software development, so you need to know from the start that it is technically possible to build what you want.
• Create a proof of concept. Proof of concept development helps to test and validate your idea. It can be a piece of functionality or documentation that shows it’s possible to build software according to the project requirements and business goals with the chosen technology stack.
• Prepare documentation. This is the last step of the discovery phase, when you combine everything discovered in the previous steps and form a software requirement specification (SRS) that includes the functional and non-functional project requirements, business goals, scope of work, and more.

You can conduct project discovery by yourself or reach out to professionals. An experienced discovery team can help you conduct research, set business goals and project requirements, estimate the budget and time, and create a development plan in the most efficient way, saving you time, money, and effort.

Step 2: Choose a team

Once you have planned the development process and formed project requirements, it’s time to choose a software development team. There are three main cooperation models you can choose from depending on your preferences, the project’s scale, and other factors. Let’s take a look at each of them.

In-house development

This model refers to development within your company, which involves hiring a team of specialists for a project. Usually, this model is suitable for companies that already have an in-house development team, experience managing software development processes, and the budget needed to maintain a team. Among the main advantages, in-house development allows for full control of all processes. But it also means that you’ll need to invest more time and effort in the project along with the costs of maintaining a team.

Dedicated development team

Let’s imagine you have an in-house team but lack several specialists with experience in, for example, building AI solutions for real estate. In this case, you can use Dedicated development team to expand your team with the necessary specialists for a particular scope of work. It’s much easier and faster than going through the entire hiring process in search of suitable candidates.

Software development outsourcing

Software development outsourcing involves delegating software development to a third party. Of course, there are several pros and cons of outsourcing software development. Among the main advantages are:

• Team with expertise in your niche. When you develop property management software, you need a team that has experience building software for this niche. It will ensure high product quality and help you avoid mistakes that developers with no expertise in real estate apps can make.
• Enable you to focus on your core business processes. When outsourcing software development, you don’t need to control everything and invest all your time in the project. The entire project process will be handled by the outsourcing team, while you will need to participate only in key decision-making activities.
• Reasonable price. Outsourcing is a cost-effective model, as you pay for a complete product, not for hours of work, as is the case for in-house development or Dedicated development team.

Among the main disadvantages of outsourcing are:

• Time zone differences. A service provider can be miles away from you, which can cause problems in work organization. But these problems can be easily solved if you set a communication schedule and expectations at the start of cooperation.
• Security. You may be worried about security risks related to sharing information on your project with a third party. In this case, choosing a reputable property management software development service provider can help to minimize security risks and ensure fruitful cooperation.

All in all, if you don’t have an in-house team or expertise in building property management software, offshore application development with an experienced team is a winning solution. The key to success is to choose a software development company that has relevant real estate expertise and enough specialists with a suitable tech stack to bring your idea to life.

Step 3: Design your app

Your app’s interface is critical for a good user experience. And as you probably know, how well users like your rental management system will have a great impact on its success. So, you need to dedicate time to creating your software interface. This stage is all about creating an intuitive and appealing user interface (UI) and user experience (UX).

UI/UX specialists will create a prototype of your app according to the software requirements specification to ensure that the system is comfortable to use while covering all user needs. Specialists can also prepare designs for different devices as needed, such as tablets and smartphones.

Step 4: Build and test an MVP

When the design is ready, the team starts to work on your app’s front end and back end. One of the best solutions is to build a minimum viable product, or MVP, first. An MVP is a small version of the rental property management software you want to build, but it has just one or a couple of features needed to complete the software’s key task.

You might be wondering why you should build an MVP first instead of building full-fledged software. The software development process is iterative, and developers build software gradually. An MVP with just a few features helps you see how your software will work in real life, collect feedback from users, identify issues, and make necessary improvements early to ensure your product meets your users’ needs. Such an approach can help to significantly reduce the cost of custom software development and ensure the quality of software once it is launched.

Step 5: Deploy your system

Deployment is the process of making your property rent management system available for users. At this stage, DevOps specialists merge parts of code created during the previous step to a central software repository. Deployment involves various activities, such as system testing, continuous integration (CI), and continuous delivery (CD) that help to automate the process of testing and integrating new parts of code and ensure that all implemented features will work as expected individually and together.

Step 6: Monitor and improve your property management software

Property management software development doesn’t end with deployment. When your MVP is finally available for users, it’s time to monitor software performance, gather feedback, and address arising issues. This step is crucial for long-term success, as only at this stage can you see how your software performs in real life.

Based on feedback from users and the results of monitoring, you can understand what works and what doesn’t, what needs improvements or fixes, and so on. As a result, you can enhance your MVP, gradually upgrade it, and implement new features.

Mistakes in developing real estate management software

Now you know all the steps required to build a custom online real estate management system. Depending on the specifics of your project, your chosen development methodology, and the scope of work, the steps can differ, overlap, or consist of different activities. That’s all okay. But at the same time, there are many nuances you should know about before getting started on your project. We want to give you a few tips, telling you about common property management software development mistakes and ways to avoid them. Here is what you need to avoid when building a tool for real estate management:

• Lack of planning. It’s crucial to dedicate enough time to planning the entire development process before moving further. This adds clarity to what should be done and how to measure the success of each development stage and helps you estimate app development time. As a result, you minimize risks of missed deadlines, higher expenses, and rework.
• Bad cybersecurity. According to a National Association of REALTORS survey, most property management system users desire better cybersecurity. It’s important to pay attention to your app’s security measures.
• Wrong development team. If you start cooperating with a development team that doesn’t have expertise in building real estate tech solutions or uses a technology stack that doesn’t meet your product requirements, there’s a risk of failure. It’s best to cooperate with a real estate software development company that has relevant experience and specialists.
• Forgetting about user needs. Focusing on users’ needs is critical for success. When planning your app’s interface, architecture, and features, make sure that they all meet users’ needs.

Conclusion

Custom property management software is a great solution for those who can’t find an off-the-shelf app that can fully cover their business needs or who have an idea for an outstanding system that will provide a better experience for users than apps already on the market.

If you don’t have an in-house team or relevant expertise in building real estate software, you can outsource mobile app development. It’s best to cooperate with real estate software development companies that know all nuances of how to develop a property management system. This cooperation model is a winning option, as you can have your project managed by professionals for a similar budget to hiring an in-house team without having to invest your time and effort in every development stage and take care of office rent, utilities, and other expenditures involved in maintaining an in-house team.

The development process includes many steps, but it’s critical to conduct in-depth research first; clarify your goals, objectives, and requirements; and plan the entire development process. One of the best ways to do this is to reach out to professionals. Use software development consulting services or cooperate with a skilled discovery team to ensure a smooth and efficient development process.

Sources

• Real Estate Innovations Overview 2022. Insights into current innovative developments in the real estate industry.
• Proptech startup Bricks and Agent using AI to help tenants and property managers alike. Interview with Rafael Niesten and Jon Stul, founders of the Bricks and Agent startup, on using cloud technologies and artificial intelligence capabilities in property management.
• Emerging Trends in Real Estate 2023. Real estate market outlook in 2023, current issues, and investment and development trends based on responses of workers from different real estate segments.
• McKinsey Technology Trends Outlook 2022. Overview of 14 of the most significant technology trends and their impact on industries.
• Property Management Software Market Research Report. Research results on changes in the property management software market between 2019 and 2021, analysis of the competitive landscape, software use among industries, current market trends, and growth opportunities.
• Long-term Tenant Rental Market Survey 2023. Report on survey results on long-term tenant preferences and expectations from landlords and property managers.
• Real Estate in a Digital Age 2021. Report on how technologies are used by real estate companies, emerging trends, and needs.
• The Profile of Home Buyers and Sellers 2022. Insights gained from a survey of home sellers and buyers on the home search process, preferences, and overall transaction experience.