To find the right provider, an Independent Rental Owner (IRO) has to do research and figure out how big they want their business to become.
When he was a Regional Vice President at Lincoln Property Co., John Ridgway was accustomed to fixing any software issue by simply picking up the phone.
When he set out to buy his own apartments in early 2009, things weren’t so convenient.
“I took for granted that when you are with a large organization, there was a guy who set up applicant screening and bank accounts and all these other administrative things just happened,” Ridgway says. “It went from ‘I’ve got a guy’ to ‘I am the guy having to do all of this myself.’ ”
For seasoned IROs, this experience is familiar. When there is a software problem, they have to get a service technician on the phone and troubleshoot and fix the issues themselves. When owning and operating rental communities in this day and age, the computer is essential.
If an IRO grows its portfolio to a certain level, a new approach is required. Dan Lieberman, President of Berkeley, Calif., -based Milestone Properties and the author of “The Effective Landlord,” says property management software becomes necessary at 100 units or more.
“It’s a cost of doing business,” Leiberman says. “Some software providers offer a per-unit fee on top of a base fee, which can make the expense pretty reasonable.”
Outside of cost, how does an IRO determine what software platform is right for them?
Networking with peers is always a good starting point, according to Steve Lightner of Jefferson City, Mo.
“It becomes trial-and-error,” Lightner says. “Sometimes you try something that just doesn’t work. Everyone says they have a great program. Maybe it’s a great program for them, but it doesn’t fit your portfolio?”
Whichever direction is taken, owners should attempt to project where their company will be a few years out so they can prepare, accordingly.
Lisa Pelloni, CAM, CEO of AdaLease Property Management in Summerville, S.C., says that companies with more than 50 units need something beyond traditional accounting software. “Beyond that, I suggest choosing a provider that offers the type of data that owners and investors need to measure their operations and investments,” she says.
Successful IROs find it to be important to maintain an online presence to list available units.
“A huge segment of our prospective residents are using the Internet and mobile phones to look for apartments,” Lightner says. “I used to use Craigslist, but now I use different providers [Appfolio, Apartments.com, Real Page, and a local print publication, Show-Me Apartments] to market our apartments to list our rental homes.”