So you’ve decided you need new software to help you manage your rental business. Where do you start? If you’re like most landlords, your first question is probably about pricing. How much does good property management software cost? Do all platforms handle pricing the same way?
As you would with any significant purpose, you should know what you’re buying and how it differs from other options before making a selection. Choosing among several different pricing models can be confusing, so here are four main types you’ll encounter.
Monthly subscriptions are a familiar model among many online services and the most common pricing layout among all software companies. This pricing model charges you a monthly “pay to play” fee which grants you access to some or all of the software’s features, depending on which plan you select. Buildium is one example of a company that uses this model.
If you like the structure of a monthly fee and unrestricted access to a software platform, a monthly subscription might work for you. However, make sure to do your research before opening your wallet. If you’re looking for a specific one or two features, you’ll want to check that they are offered in the plan you’re considering. The last thing you want is to have to pay more than you initially anticipated.
Pricing based on individual features is another widely used structure. You’ll see this one frequently while browsing for property management software companies. Feature-based pricing charges you for only the features you select. For example, you might be given a list of features to choose from, including online rent collection, tenant screening, maintenance management, lease signing, tenant communication, listing syndication, and so on.
When and how frequently you pay could vary depending on the software. Read the fine print to find out whether the fee listed is monthly, annual, or one-time only.
Feature-based pricing is a good option for landlords who only want one or two specific features, such as online rent collection or tenant screening. This way, you won’t have to pay for extra features you aren’t going to use. Appfolio, Tenant Cloud, and Avail are all companies that use this pricing structure.
Freemium is another pricing model you should watch out for when searching for property management software. These platforms allow you to make an account and sometimes use a few features for free, but charge you for most of their benefits.
You might see this type of plan advertised as a free trial (free access for a limited amount of time) or as a feature-light version (basic functions are free, but you have to pay for most features).
Companies that use this model include TenantCloud and Avail.
Freemium might be a good place to start if you’re interested in testing out a few features or the platform before committing to an expensive software investment.
Can high-quality property management software really be free? The answer is yes—while uncommon, free options are available. Under the free pricing model, you won’t be charged for signing up, adding features or units, or using the software for longer than a few weeks. Every feature is accessible. One company that works like this is Innago.
If you’re wondering how any company makes money from the free model, here’s an explanation: Most free property management software companies profit from small fees charged to tenants, not landlords. For example, the company might make a few dollars off every credit card transaction or from small convenience fees charged when a tenant purchases renter’s insurance.
These fees are minimal for tenants and cost nothing for landlords, proving this model to be a good option for both.
Pay for Valuable Software or Don’t
Whether you choose to make a financial investment or go for a free option, you should always make sure that you’re paying (or not paying) for what you want. If you aren’t using several features that your software offers, it doesn’t make sense to pay for them. If you choose property management software suited for your individual needs and preferences, it will no doubt be worth the cost.