Technology in rental property management has come a long way. In a short time, we’ve gone from relying on Rolodexes, spreadsheets, and checks to using digital payments and AI-backed property management tools.
So, if you want to get ahead in rental property management, it’s time to reevaluate your tech stack. Investing in digital transformation can pay huge dividends for years to come. 92% of companies that have become digital leaders have seen a 17% increase in profit margins over three years, polished off with a 72% digital tool adoption rate.🔥
In this article, we’ll trace the issues that kickstarted digital transformation in property management and their consequences. We’ll also reveal some of the latest and greatest solutions to invest in to take your business to the next level.🚀
The problems with traditional tools fueling the tech takeover
Paper invoices, payment logbooks, postal orders—remember those? You may even still use them. These were once rental property management staples. Then, in the 1980s, PCs and spreadsheets like Lotus 1-2-3 and Microsoft Excel came along. Suddenly, there was a formula for almost every task, including record-keeping, accounting, and even communication with tenants and vendors (we’re looking at you, Mail Merge!😜). These technologies were a step up from their predecessors. But, some issues reared their ugly heads continually, setting property managers back. These include:
- Human error: Mistakes are common when using manual tools, whether it’s entering the wrong information into an Excel cell or forgetting to process a paper invoice. The consequences can be catastrophic. Take Citigroup, for example. An admin error while wiring funds caused an eye watering $900 million loss. 😨
- Time-consuming processes: Not all tech is good tech. In fact, some simply switch out the typical issues that manual tools bring with a whole new set of problems. A great example of this is online rental payment portals. While they’ll let a tenant pay rent online, some are inefficient, hard to understand, and expensive.
- Lack of real-time updates: Speed is everything when closing tenants on leases. But it’s hard to be fast when you’ve got to dig through physical documents and spreadsheets while relying on memory or calendar invites. And just like that, leads go cold, and your business misses out on precious revenue.
- Limited data accessibility: Imagine being off-site at a viewing, and you need access to a prospective tenant’s data to close the deal. The problem is that the sales file is in paper form. So, you call your colleagues, but they’re at lunch and in meetings. Now you’re stuck, and your hard work is on the line. Such are the consequences of manual and paper-based processes. The result? You guessed it—more lost sales. 💸
- Ineffective communication: Keeping prospective and current tenants updated is critical in property management for rentals. Except, reliance on traditional comms channels like phone calls, physical mail, and email leaves the door open for mistakes. For example, you might not record key data or miss messages, creating a poor tenant experience and financial losses.
- Data security concerns: Cybercrime is at an all-time high and shows no signs of slowing down. Losses could hit a record $13.82 trillion by 2028. Also, 98% of US consumers worry about the existing cybercrime threat. So, common practices like writing sensitive information like bank details and tenant profiles on paper and using unencrypted tools, won’t cut it. They’re a recipe for financial and reputation losses.
- Growing demand for more efficient and automated solutions: Imagine paying rent by bank transfer or verifying payments by eye. Every. Single. Month. This process gets old quickly. Soon, procrastination can set in, making on-time rent payments less likely. Those staff that power through pay for it with overwhelmed schedules and burnout. Lost opportunities, admin errors galore, and frustrated tenants soon follow. All of which negatively impact your bottom line. 😩
6 must-have tools for successful rental property management
Perhaps you’re using some of the traditional tools we just covered and experiencing the headaches that come with them. Or maybe you’re using newer technologies but not seeing the gains you’d like. We’ve got you covered. Let’s explore some game-changing solutions and their perks.
(AI-powered) property management software 🏢
First up, an industry favorite. Property management software is like a marketing, sales, bookkeeping, and administrator platform rolled into one. This solution acts like your very own assistant, streamlining and digitizing processes. Some benefits of property management software include:
- Less busy work, increasing productivity
- Maintain accountability by tracking actions
- Comprehensive task management spanning lease management, maintenance tracking, accounting marketing, sales, and more
- Reduce the administrative workload by automating tasks like managing tenant inquiries and maintenance requests
- Improved response times that enhance tenant satisfaction
- Streamline important administrative tasks like document processing and renewal reminders
- Increase data democracy and sustainability by going paperless
Flexible rent payments app📱
In a world where 2 billion people use mobile payments, it was only a matter of time before renters started to expect more modern rent payment options. A huge leap forward in payment technology is a rent payment app. Residents pay rent through a few clicks. This technology can replace checks, bank transfers, standing orders, and the tedious admin associated with them, making life easier for all. For example, a solution like Flex, a rent payments app, residents can split rent payments and manage them when and where they want. Some more perks of a flexible rent payments app are:
- Stabilized cash flow (Flex pays out rent to you on the 1st of every month, guaranteed)
- Improved financial visibility, reducing late payments and administrative overhead
- Higher NOI and ROI
- Streamlined and automated rent collection, allowing your team to reclaim their time
- More resources to focus on other strategic initiatives
- Increased leads, sales, and renewals
- Higher tenant satisfaction
AI customer support solutions 🦾
Answering tenant queries and concerns is a given in property management for rentals. So, you need tools that’ll make your customer service flawless. That’s where AI-backed support solutions come in. From chatbots and virtual assistants to automated ticketing and case assignment tools, many solutions help you get and stay in tenants’ good graces. Get this: tenants view properties using intelligent assistants as five times more tenant-focused and forward-thinking. Some more highlights of using AI customer support tools are:
- 24/7 availability to address issues and questions when it’s most convenient for the tenant, reducing wait times and increasing satisfaction
- Using automation to provide instant and accurate responses increases efficiency and reduces your team’s workload
- Scalability allows your team to help many tenants simultaneously, which is very helpful during emergencies or widespread issues.
- Reduce the need for staff, which drives cost savings and spending efficiency. It can also free up human agents to focus on more complex issues
- Create consistency to ensure that all tenants receive the same service level and information
- Improve data collection and analysis on tenant inquiries and interactions to gain insights into tenant needs, preferences, and pain points and inform decisions
Predictive analytics software 📈
Accurate, real-time data is essential to know what actions to take to optimize operations and scale. Predictive analytics will help. It uses insights, statistical algorithms, and machine learning techniques to analyze historical data and forecast future events or trends. For example, you track key metrics like tenant satisfaction, retention, and sales. As a result, predictive analytics is creating windfalls. Companies that use predictive analytics are twice as likely to sit in their industry’s top quartile of financial performance. Also, 80% of companies that use predictive analytics experienced an uptick in revenue, $321 billion in savings from reduced personnel costs, and 98% saw higher customer happiness. Some more perks of using predictive analytics include:
- Higher profits and operational accuracy through forecasting market trends and rental demand and optimizing pricing strategies
- Boosted loyalty by using data to tailor tenant experiences to fit current wants and needs to
- Increased conversions on marketing and sales campaigns by leveraging insights to personalize interactions and create more targeted audiences
- Reduced repair costs and downtime from predicting maintenance issues before they occur
- Higher accuracy and achievement of company goals by using data to guide decisions
Blockchain-based rent, building, and security management platforms 👩💻
Another high-tech solution you’ll want in your arsenal is blockchain. It facilitates secure and transparent transactions, data collection, and analysis, which you can use to optimize operations. Blockchain also allows you to manage buildings and documents remotely while keeping data secure. You’ll often find blockchain-powered solutions for lease management and tenant screening. Blockchain also features in smart building technology like sensors, lighting, cameras, doorbells, access controls, and energy management. Some benefits of using tools with blockchain include:
- Enhanced trust between landlords and tenants
- Reduced disputes and errors by simplifying rental payments, lease agreements, and ops,
- Increased tenant satisfaction from polished building operations
- Efficient tenant screening processes, enhancing property security
Virtual Reality (VR) property tours 🎥
If you manage many buildings or need more time to conduct viewings, VR property tour solutions are a must. These solutions place your prospective tenants in the unit using realistic 3D renderings. Users can view and navigate these VR showrooms, including the different rooms or areas, from various angles and interact with objects or elements within the environment. These features allow prospective tenants to feel what it would be like to live on the property without visiting in person. Some benefits of using VR property tours are:
- Attract more prospective tenants by offering remote and immersive experiences
- Scaled-up viewing completions by reducing the need for physical property visits
- Saved time and resources for both tenants and property managers
- Enhanced marketing conversion rates and leasing efficiency
Strategies for rental property management excellence
To get ahead in property management for rentals, your strategies need to be as good as your new tech stack. This may call for a revamp to compliment. Let’s explore some key tactics to elevate your rental property management game.
Tackle change adoption barriers head-on
Many have high hopes for their digital transformation but fail. The reasons vary from business culture and entrenched legacy technology to budgetary and legal constraints. For example, 28% of businesses see digital transformation as a cost center. So, before you upgrade tech solutions, take some time to identify the barriers to your success. Then, set clear goals and timelines to combat them.
For example, say you discover renters want more flexible payment options like solutions that offer split rent payment. However, internal discussions reveal staff worry that such solutions could increase their administrative load. You could:
- Look for tools that leverage automation
- Share how such tools will reduce the team’s workload with specific examples and demos
- Provide training on how to use the solutions to maximize productivity and efficiency
Pick only the best solutions for the job 🛠️
With so much choice, it’s easy to get swept up in adding more tools to your tech stack. Set a high standard for what you’ll onboard. Ensure each solution adds value to your existing tech stack rather than diluting it with yet another software staff, and tenants will have to learn. What counts as a top-quality solution varies, but as a rule of thumb, pick ones that are:
- Comprehensive, offering multiple solutions and addressing various concerns
- Cloud-based platforms that provide real-time access to data
- Automation-friendly (especially for manual, tedious, and repetitive tasks)
- Offer mobile applications facilitating remote management and communication
- Data driven. E.g., they provide advanced analytics to optimize operational efficiency and decision-making
- Security-focused, e.g., encryption, 2FA, firewalls
- Customer-focused with on-hand support
- Good value for money
- Scalable
- Able to integrate with other solutions used in your company
Learn more with our flexible payments eBook.
Track performance metrics and KPIs 📊
Another critical job is keeping an eye on your company’s performance through KPIs and metrics. This task will share what you’re doing right and what you need to improve to stay on the right track. It’ll also give you insights to share with different teams to optimize results. Some KPIs and metrics to track include:
- Rental income
- On-time payments
- Delinquencies
- Occupancy rates
- Expenses
- Tenant turnover
- Net operating income
- Return on investment
- Net promoter score
Top tip💡: Integrate insights from key company software like property management, payment, ops, and account solutions. Then, push the data to a dedicated dashboard to track progress at a glance.
Act, assess, adjust 🎛️
Analysis paralysis, rigid processes, and entrenched beliefs hold back many projects, but they don’t have to delay yours. The trick is to set S.M.A.R.T. goals, start small, collect feedback, and then tweak your approach. Taking the leap into agile digital transformation will pay huge dividends on your rental property management journey. Companies that go agile see a staggering 98% success rate and 60% more profit than businesses that take a more traditional approach. This could look like testing a solution with one team or department. Then, conduct a phased rollout to the rest of the company once you’ve got proof of concept.
Train your team and tenants for the digital future
Change can be intimidating when you’ve always worked a certain way or relied on specific tools. Even when the current setup has issues. So, it’s important to share why you’re changing technologies and the benefits tenants and staff will get from them.
Additionally, provide comprehensive training, support, and resources to your team and residents to ensure they can use the new digital tools and systems. This move will ease everyone into the switch and increase adoption.
Make a seamless transition to digital rental property management
Not too long ago, we could only dream about executing rental property management on autopilot. Thankfully, those days are gone. You can now use technology to do the heavy lifting. So, assess your current tools and processes. Highlight what takes too much time, energy, or funds. Then, find solutions to optimize managing them, starting with mission-critical tasks. Keep improving your approach based on data, and you’ll be well on your way to lighter workloads, higher profits, and happier.
It’s time to level up your rent collection. Learn how Flex can help you go from cash to clicks pain-free.
