Yardi’s Voyager software continues to rise in popularity, while RealPage, Intuit, and Property Automation Software are making strong gains as the platforms of choice for multifamily executives.
Those software suites continue to integrate more features, such as electronic payment technology and revenue management functions, as property managers—especially those with more modest IT budgets—seek to get the most bang for their buck from their systems.
The rise of RealPage, Intuit and Property Automation Software appears to come at the expense of AMSI’s property management software and Sage’s Timberline product, as both lost significant market share over the last few years.
These are some of the results of the third annual APARTMENT FINANCE TODAY technology survey, which polled 167 multifamily executives throughout February and March.
The survey asked respondents about their preferences in property management software, their technology purchasing strategies and plans, and their use of screening and leasing services, among other topics.
The software links
Yardi continues to dominate the property management software industry, as 26.4 percent of respondents reported that it was their primary software suite, a sizable jump from 21.6 percent in 2005.
Property management companies appreciate Yardi Voyager’s ability to link up with much ancillary software. “I like the open platform,” said Jo Anne Bush, vice president of property operations at Holland Partners, which manages about 11,000 units at 48 properties, mostly concentrated in the Pacific Northwest. “You can connect with other third-party services and transfer information easily.”
The company uses third-party services such as electronic payment technology, a utility payment service, and a collection agency function. The information entered into each standalone service is automatically ported into Yardi’s Voyager software suite—a centralized virtual depository that formats disparate information and allows the user to slice and dice the data in a variety of ways.
The next most popular software company, RealPage, came in a distant second, used by 12.1 percent of respondents. But the company is moving in the right direction, as its popularity has grown about 22 percent in the last three years, from 9.9 percent in 2005. Intuit’s MRI product and Property Automation Software’s Tenant Pro product tied for third with 9.9 percent each. But Domin-8, which only recorded 2.2 percent of respondents, should do better in next year’s ranking—the firm acquired Property Automation Software at the end of February 2007.
The biggest losses hit AMSI and Sage (Timberline)—each has experienced significant drops in utilization since APARTMENT FINANCE TODAY began this survey three years ago. AMSI was used by 10.8 percent of respondents in 2005, but has since fallen a whopping 69 percent, to 3.3 percent in 2007. Sage’s Timberline has fallen 52 percent in the last three years, from nearly 7 percent to just 3.3 percent in 2007. AMSI was recently acquired by software provider Infor.
“We compared AMSI and found Yardi to be superior,” said Lauren Piper, office manager for Pacific Crest Property Management. The company, which manages 70 properties and about 1,800 units mostly in the Seattle metro area, switched to Yardi Voyager in August 2006, migrating from the previous generation, Yardi Professional. “AMSI seemed to be a few years behind.”
The future looks even brighter for Yardi as property management companies upgrade outdated systems. Almost half of respondents, 47.6 percent, said Yardi is the software suite most likely to be considered for future purchases, a big gain from 2005’s 31.4 percent.
Tenant Pro product, now part of Domin-8, and Intuit’s MRI software are making inroads in the minds of multifamily decision-makers, gaining traction on the top guns, Yardi and RealPage. A healthy 26.7 percent of respondents said they would consider purchasing Tenant Pro, an almost 60 percent gain from the 16.7 percent registered in 2005.
Intuit/MRI was little changed year-over-year, with 23.8 percent saying they are most likely to try that provider. RealPage came in fourth regarding future consideration, with 21 percent of respondents saying they are likely to consider purchasing it in the future.
When asked why they purchased property management software, 55.6 percent of respondents cited the ability to manage growth as the No. 1 reason, a much higher share than in previous years. That suggests a rising number of multifamily companies are gearing up for expansion, either through internal growth or acquisitions. Another key reason respondents cited for purchasing or upgrading property management software was its ability to help executives make decisions.
Being able to slice and dice performance and traffic reports is one way such software can do that. Many of the leading software suites today offer property managers greater flexibility in the breadth and depth of reports they can pull from the system.
“We’re very free to build whatever reports we may need,” said Bush of Holland Partners, speaking about Yardi Voyager. “I’ve used other software programs, and if you wanted a custom report written—financial reports, traffic reports, any kind of asset management report—you would often have to hire somebody else to do it.”
Reliability, ease of use, and customer service/tech support were the three most important factors companies said they considered when deciding which property management software to purchase.
Western National Property Management, which manages approximately 160 properties, totaling nearly 26,000 units, chose Yardi for those very reasons. Even with the litany of features that Yardi’s Voyager boasts, it’s an intuitive and user-friendly environment, the company said. “We liked the product for its simplicity and ease of use,” said Ken Hodges, vice president of information technology for Western National.
Providing technology services, such as telecommunications, Internet, satellite, or cable television, remains critical to luring potential renters.
Nearly two-thirds of respondents characterized such services as either “very important” or “important” to the attractiveness of their rental properties. Only 6 percent called those services not very important.
When asked which telecom/ Internet/satellite/cable television provider was their vendor of choice, respondents named Comcast and Verizon.
Renting and screening
Leasing and screening services remain an integral part of the business, with slightly more than a third calling them “very important,” and nearly a third more ranking them as “important.”
The most popular leasing and screening vendors are Rent.com, Apartments.com, and Apartmentguide.com, followed closely by First Advantage SafeRent and ForRent.com. Their ranks were unchanged from 2006.
It pays, but it costs
Companies’ technology budgets were for the most part equally split between software, telecom, and leasing and screening services.
This year’s survey also revealed that the number of Luddites in the multifamily industry is dwindling. The share of respondents who said they plan to spend nothing on property management software this year fell to 20.4 percent in 2007, from 34.2 percent in 2006, and the share of companies that plan to spend up to $20,000 rose to 57.3 percent from 46 percent.
Not only that, but a growing share of companies said they plan to spend big on technology this year. The share of respondents expecting to spend between $50,000 and $99,000 more than doubled from 3 percent in 2006 to 6.4 percent in 2007, and the number who plan to spend between $100,000 and $499,000 on property management software rose from 3.6 percent in 2006 to 6.4 percent in 2007. A similar split occurred when respondents were asked how much their companies allocated for telecom/Internet/satellite/cable television expenses for 2007. The majority, 60.5 percent, said they expected such costs to be less than $20,000, while 14 percent plan to spend between $20,000 and $49,999.
Spending for leasing and screening services was expected to stay on the low side as well, with 66.7 percent saying they’ll spend less than $25,000, and 11.7 percent projecting the cost at between $25,000 and $49,999.
Who Took the Survey?
APARTMENT FINANCE TODAY'S 2007 Technology Survey received 167 responses from a broad spectrum of the industry. More than half of the respondents, 57 percent, hold the title of principal, partner, or owner, and the next largest group was presidents, chairmen, and CEOs, at 11.4 percent. Executive or senior vice presidents made up 10.8 percent of the respondents, with 10.2 percent holding the title of director. The rest of the field were managers or held other titles.
The company profiles were weighted toward the property owner/manager side, as more than half, 53.6 percent, fit that category. The next biggest groups were developers and diversified real estate firms, at 13.3 percent each. Property managers, builders, asset managers, and others made up the remainder. The overwhelming majority, 157 of 167, are private companies.
Respondents tended to be at smaller firms, with 56 percent saying they worked in companies with less than 10 people. Companies with 11 to 25 employees made up 12 percent of the field.