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Property management has been predictable for the last 20 years with little impactful change to the business model and how a customer is serviced. This makes ‘what’s the cost of your tech stack?’ one of my favourite questions to ask of a property management business.
A whole ‘prop tech' industry now exists in real estate, property management has had its share of the pie too with many new entrants selling efficiency or improved customer experience. What we would really like to see however is a service differential for our clients, solutions for capacity, communication for our teams and evidence that a change in tech will result in an improvement to the profitability and therefore growth in our businesses.
There is much tech to choose from. In fact the property management industry has evolved from two major players in the 90s which controlled the industry into the 2000s to designing your own tech stack and this is where we hit the rough water my friends.
Without realising it, the industry has gone from a system which operates the business to a system that was fit for purpose in the early 2000s to now requiring at least two additional technology products to service their clients and I’d like to suggest that there is still a gap.
So, what is the cost of your tech stack?
Have you considered all the technology that your property management business requires to operate and the total cost of that? The industry often prices technology at a per PUM price, in other words, the dollar price per property under management. This price should be calculated by reviewing all of the tech used to operate your business, not just the trust accounting software.
When you do get to calculating this you won't be surprised to find that the tech stack is most likely providing property management services as expected by the client. But is the client getting anything more than what they expected? Here lies the gap. An agency cannot charge a higher management fee until their service is above the expectation.
