What started as an optional tool for property management companies, is quickly becoming a necessity for all-sized stakeholders in the property management business and is on track to become a $2 Billion industry by 2027, according to a property management software industry research report by Transparency Market Research.
Property management software is an application that allows the efficient management of properties to simplify duties on one platform. Property management software is intended to help property managers and owners to simplify property management processes such as establishing strong communication, tracing finances, storing leasing documents and contracts, centralization and digitization of information, and ensuring an efficient rent collection process.
The report looks at the growth of the property management software industry starting in 2019, into 2027. The market was estimated to be $1.1 billion in 2019 and is projected to grow to $2 Billion by 2027, thus resulting in an approximate 190% increase over an 8 year timespan. This could also translate into an approximate 24% increase year-over-year, or 7% compound annual growth rate for the next few years going forward. The software’s use in the residential rental property management sector is projected to outpace use among commercial rental properties, which shouldn’t be a surprise given the fact that there are substantially more residential units/tenants when compared to commercial units across the US.
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An interesting point noted in the report is in the globally geography of the software industry. North America holds the largest majority share of the global property management software market. It is anticipated to continue dominating the market, at least throughout the forecast period of 2027. North America’s strong market dominance is believed to be attributed to a rising number of vacant apartments and increased number of units managed by professional property management services. The runner up markets for the property management software industry is Europe, Asia Pacific, Middle East, Africa, and South America, respectively. Among these runner up markets, Asia is projected to grow the most with an anticipated 9% compounded annual growth rate.
Key drivers for the growth of this software market are made up of three main factors – New Technology Innovations; Increased Consumer Adoption; Greeter Need for Property Management Transparency
New Technology Innovations
Top players in the property management software industry are focusing on many different interactions of tech innovations. Increasing consumer convenience is being achieved by connecting property management systems to amenity packed mobile apps. For specific property types and unique needs, some software makers are increasing concentration on offering customized software as per needs of end-users. A common technology being seen across property management software platforms is Artificial Intelligence (AI) and Machine Learning (ML). AI is being used to recognize patterns in data, and offer built-in analytics to make use of insightful data. Along with AI and ML, Data management is one of the key tasks for users. Considering the importance of this fact, key vendors in the property management software market are providing users with AI systems that can sort and search any type of data.
Increased Consumer Adoption
As technology continues to change the ways of everyday life, the integration in the rental real estate market was inevitable. Making rent payments, making maintenance requests, and communicating with landlords is something that is a natural fit for software to facilitate. Frequent use of smart phones to do simple things like order food online, have also increased consumer’s comfort levels with migrating rental interactions to online. Looking back, in comparison to other markets such as telecommunications or banking, consumer preferences have been slower to adopt technology in the rental property management market. However, the projected strong year-over-year growth should steadily raise adoption rates.
Greater Need For Transparency
Historically, transparency in the property management industry has been at the discretion of the physical property manager onsite. The shift to online property management software has greatly decentralized this transparency by allowing for remote operations supervision such as reporting, accounting, lease, tracking, repairing, planning, and sales. Property managers can also use the software to outsource all legal formalities to third-party vendors. Additionally, rental real estate property owners and managers emphasize on the collection and maintenance of property information for enhanced data administration and accessibility with the help of centralized property management software.
The growth and adoption of property management software among property managers is expected to have a strong positive impact during the report’s forecast period, as rental properties continue to evolve and the demand for real estate as an investment remains strong.
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