Are you a new letting or estate agent just starting out? Or an established agency with an existing property software system? Either way, cost is always going to be uppermost in your mind when you’re considering any new purchase. Shopping for a new property management software solution is no different. But how much should you expect to spend?
How much is property management software? Or a car?
We love simple real-world analogies here at Tilt Property Software.
We’ll help cut through the hype and jargon, explaining in plain English how property technology (“proptech”) can help your letting or estate agency run more efficiently. Ask us a question, and we’ll generally boil it down to something you know well.
Let me tell you about a car (below), or a house (at the end). Or how choosing the best property management software is a lot like dating…
Seriously, how much does a car cost?
Just think about that for a second – that’s actually quite a useless question on its own. You need to dig deeper before you can hope to get a meaningful answer.
I’ll bet you can get a car for £100 right away today, or if you won the lottery you could spend every last penny of it on a new motor, if you wanted to.
First, you need to know…
- Which sort of car am I looking for – a sports car or a family saloon?
- What am I going to use it for – school runs, or a 100-mile daily commute?
- How much is my budget – have I got £20,000 cash, or can I pay £200 per month?
- Who will use it – just myself, or my full family of 6?
- What are the running costs – is it as petrol-guzzler, or prone to faults?
- And, don’t forget… can I get it in my favourite colour?
When asking how much is property management software, you have to consider questions like these before you can decide what the is the best property software for your agency.
How much to pay for a property software subscription?
Many software packages nowadays are sold as Software-as-a-Service or SaaS, licensed on an affordable subscription basis. Rather than shelving out thousands of pounds on a new system, and then being stuck with it if you’re not happy, you pay an affordable monthly fee instead.
Subscription pricing is particularly well suited to web-based “cloud software”. As part of your monthly (or annual – see below) fee, you get access to the system, ongoing upgrades, your data is automatically backed against disaster, and support will be included in the price. What’s not to like?
As for the actual cost? Well, that, of course, depends.
Bear in mind also that most cloud software packages have various subscription plans. Think Bronze, Silver and Gold. The higher-priced plans will naturally offer more value and features, but the cheaper plans will be more than adequate for smaller agencies.
So-called freemium plans often offer a very basic package for free, so you can get a good feel for the software with absolutely no outlay. As you would expect, they are generally limited in terms of the number of properties you can actively manage, as well as lacking the features which start to deliver real value to your agency. However, they can be a great no-risk approach to trialing property software packages.
Like a car, you can get a product for £20 a month, or you could pay £2,000 per month. But you will obviously get two very different offerings.
Setup fees increase the initial cost
Attitudes and options on these upfront “setup” costs vary quite a lot.
Is charging a setup fee justified? Is it just another obstacle to getting the right system in place? How much is reasonable?
There is almost always a cost to the vendor to get new customers on board. This isn’t just the initial sales process. The onboarding and learning (and support) process can stretch for weeks and months. Some proptech providers are happy to absorb that cost, confident that users will get the hang of things very quickly. Others insist on training at the outset in order to accelerate the learning curve and guarantee a level of competence and confidence which delivers value more quickly.
Setup charges do increase the up-front investment from your point of view as an agent considering buying new property software, especially for small businesses. But the extra investment at the outset can give you a head-start which improve engagement and traction, ultimately increasing your chances of success.
However, should training be often bundled as part of the compulsory setup cost, or presented as an optional extra at a later stage?
I discuss training in more detail below, but our preference is somewhere in the middle. A letting or estate agent should be able to get up and running without incurring any more cost than is necessary at that very first stage. But if you need extra help, or want to get up and running as quickly as possible for the least amount of hassle, then expect to pay a premium for that.
Migrating data from another system
Is it unfair to have to pay to switch software products? Shouldn’t the new supplier be grateful for your business without charging extra for you to move over to them?
Well, no. Let me explain why. With another analogy, of course – moving house.
If you purchase a new home, would you expect the removal process to be included in the price? And not just the cost of hiring the van. Would you expect someone to come into your old home, help you pack (and sort, and discard, and keep, and get nostalgic), and then for them to take it all carefully over to the new home. Is it reasonable for you to ask them to then carry everything inside, up the stairs, into the attic and the basement? And then to help you neatly pack everything away again so that you’re able to quickly pick up where you left off, with no inconvenience?
Of course not. I’m sure someone could offer this as a service, but expect to pay for it. Or do it yourself, but expect it to involve some pain.
The same goes with moving data to a new product. All data is modelled and stored differently is different systems, and it takes a lot of effort to map this neatly from one store to another. One system may use simple calculators, whereas another may be based on full double-entry accounting principles with comprehensive tracking of funds through a series of nominal codes in a chart of accounts. Never the twain shall meet.
Each data migration is unique, and will likely be priced on a project basis.
Save costs by paying annually
An increasingly popular pricing model is to offer customers the chance to pay up front for a full year and enjoy a considerable discount in return. It’s not uncommon to see savings of 10-15% on normal monthly the subscription price if you pay annually in advance.
£99 per month, or £1000 for the year? 12 months for the price of 11?
These are both really good deals – 16% and 8% respectively. But, while there is no contract, you have effectively just committed for the incoming year.
There’s no doubt that if you really like the software and have the available cashflow, it makes sense to avail of considerable annual savings.
Just be careful that you read the sales print carefully. The monthly cost quoted is quite often the monthly equivalent if paid annually. It’s not misleading, just a sales technique, so read it carefully.
Minimum term contracts for software
At Tilt, our Elevate software is effectively pay-as-you-go. You pay your subscription month-by-month, and if you decide that you don’t need the software any more, for whatever reason, then you stop paying with the current period. Let us know, and you’ll receive no further invoices.
In our experience, the cost of chasing broken contracts (in time, not just money) doesn’t make sense. If someone really wants to leave, it doesn’t pay to be desperate and fight the inevitable. Let them move on. (I should have included that in my article on why finding the best property management software is like dating!)
Putting contracts in place can also present a barrier to getting a sale in the first place. From your point of view, as a letting or estate agent keen to get a good system in place for the future of your business, you don’t want to get tied into a long term contract. Especially if you have been bitten before.
To be frank, if the system isn’t working for you, then you don’t want to be paying for it any longer than necessary. Don’t let the regret of money already wasted hold you back. We certainly don’t believe in holding customers to ransom. That’s not who we are.
I’ve lost count of the number of conversations over the years where potential prospects are really unhappy with their current system, but can’t let go of the regret over money already spent badly. It takes vision and guts for an agency manager to recognise and accept sunk costs, write them off, and just buy a new property software system. Money lost, lesson learned, move on for the good of the business.
Software training costs
Does the new software company insist that you book training as part of the sale, or is it optional? Or is there a training option at all? Should you even expect to be charged for training in the first place?
Firstly, yes, you can expect to pay for training.
Think of common applications such as Microsoft Office, or Google Suite. There is a ton of free learning material out, but people are usually more than happy to pay a reasonable price for well-designed, structured training courses to get the most out of the software in the minimum time possible.
I do understand, though, why some companies insist on taking training at the start. For the new customer, it accelerates the learning curve. Since staff are up to speed more swiftly, there is greater engagement and more chance of adopting the software for the long haul. It’s also a wise move for the software vendor as it focusses the initial training to a short window, and ultimately reduces support requests.
However, compulsory training drives up the initial cost of entry, and doesn’t always work for small agencies who are on a tight budget.
Although structured training is definitely beneficial, I don’t think you should be forced down that paid route. If the software is easy to use, people are often happy to learn by themselves using the free resources such as online documentation, video tutorials, and the customer service helpdesk.
But, if you want to get productive as quickly as possible, then training is money well spent.That may be in the form of short, focussed screen-share sessions at an hourly rate – our own preference. Or it may stretch to a number of days onsite, which is more expensive (and more disruptive). The choice is your own.
Software running costs, and unclear fees
Once you’re up and running, you should not have any unexpected surprises, provided you’ve done your homework correctly.
When doing comparing the price of property management software products, make sure you’re aware of where extra costs may arise as you grow. Most software vendors are completely open and honest about their prices. The confusion arises from the way these are presented in the sales material.
If there is a pricing table, this will focus on the standard “plans”, and bolt-ons may be displayed below the table. The price shown may be a monthly equivalent if paying annually (as mentioned above), so read carefully. Does it cost extra for more branches, more users, or more properties? Or all three? This is fine, it’s up to the vendor. But it should be clear.
At some stage, if things go well, let’s be honest, you may need to increase your property limit. You should reasonably expect to pay more, and possibly upgrade to a higher plan to accommodate your growth. This is a good thing. I’ve seen people complain about an extra £20 a month when they’ve just taken on another 100 management properties. Really?! Sorry, but your extra revenue far outweigh the subscription increase.
Third-party integrations may not affect your subscription, but there may well be additional costs from the third-party. If you purchase SMS credits, expect to buy text message bundles.
Check the pricing tables in detail, especially bolt-ons and the next plan up. And ask questions if it’s not immediately clear.
Reduce the risk with a free trial
The only reliable way to determine if a property management software package is worth it is to try it out and see for yourself, before you spend a penny.
Demos are well-rehearsed and polished, and sales people tend to follow their own scripts. There’s a limit to what can be covered in a 45-minute screen-share meeting, and what looks easy when someone else is showing you may not be so intuitive when you try it for real on your own.
Sign up for a free trial on the product website, if it’s available (our Elevate property management software has a free 14-day trial) and follow the tutorials and help articles in your own time.
Set up some tenants and properties, add a tenancy and apply some rent. Check that you can make sense of the balances and statements. Record receipts. Make payouts. Perform some of your daily tasks, and then process your month-end activities.
You won’t be long getting a true feeling about how usable and comprehensive it is, and how fast the support is when you raise a query.
In summary, compare like with like
As I said, we love analogies. Remember the car example. Or imagine that you are house-hunting.
How much is a house worth? Should you pay £100,000 or £1 million? It depends.
You can’t compare a mid-terrace property in a housing estate with a mansion in its own 1-acre site complete with stables and a swimming pool. They are two completely different proposals, with two completely different prices. Aimed at completely different people, with completely different budgets and circumstances.
Are you looking for an all-singing, all-dancing system with automated bank feeds and fully-integrated email? Expect to pay a magnitude more than for a Customer Relationship Management (CRM) tool which simply tracks rent balances, and produces reminders for expiring certificates.
When it comes to deciding how much property management software costs, you need to be very clear what you want, shop around, and then figure out what you’re happy to pay for that.
Some packages offer better value for money than others. But as a rule, you get what you pay for.