Property Management Software Market Size & Growth

The role of software solutions in real estate operations has grown significantly in the last few years. The property management software market experienced outstanding growth as a result. Experts expect that the property management software (PMS) sector will grow at least 8% a year until 2030. With growing real estate professionals' reliance on cloud-based software for automating routine tasks and improving business processes, there is no sign that PMS will become less popular in the foreseeable future. So, understanding this market is crucial for anyone in the real estate or software development industry. Let's take a look at the current state of this sector and the trends that will shape the best property management software in years to come.

Property management software industry analysis

Property management software helps property managers and other real estate professionals to efficiently automate and improve administrative, financial, and other tasks. Among the most common operations PMS can assist in are online rent collection, maintenance requests management, tenant screening, and financial reports generation.

Due to growing urbanization and significant growth of the real estate market worldwide, property owners, managers, real estate agents, and tenants are seeking efficient property management software that can make their lives easier. PMS can not only help to save time and resources by automating routine tasks but also is instrumental in reducing the probability of human errors, improving customer satisfaction, and facilitating better communication between property management companies and clients.

North America is currently a leader in the property management software market and will remain at the top for at least the next five years. This is possible due to an impressive number of IT professionals in the region and a great variety of experienced property management software vendors. There are some established companies with unmatched expertise in real estate, such as IBM, Oracle, or Adobe, but also smaller service providers that work with businesses of any size, such as Fingent and Dualboot Partners. Europe and Asia also have some established product development companies with experience in the real estate industry. Among IT service providers worth mentioning are SAP SE, Clockwise Software, and Vention.

Now, let's talk about the size of the property management software market and the drivers behind its growth to better understand what awaits this sector in the future.

Property management software market size and growth factors

In 2023, property management software market share was estimated at $2.6 billion. By 2032, it is projected to reach at least $3.9 billion. This growth is stimulated by several key factors:

Tech innovations. IoT (Internet of Things) integrations are becoming more accessible every day, and the number of smart homes is higher than ever before. Building management systems are not a novelty but a norm in many European and North American cities. Property management software enables homeowners and property managers to easily track a building's key metrics, track maintenance requests, and detect anything unusual early. Plus, the integration of AI, machine learning, and VR in property management software solutions enables real estate businesses not only to improve their back-office operations but also to provide exceptional user experience and award-winning customer support.
Real estate investment. We have witnessed a steady increase in real estate investment for a long time now. Development and management of residential and commercial properties requires right property management software, so product development companies see high demand for these solutions and continue to deliver tools that streamline workflows, generate investment management reports, and automate operations. Also, real estate investors often acquire rental properties in popular holiday locations. Rental property management software offers them tools for lease management, rent collection, tenant management, and other key tasks.
Regulatory compliance. Governments and international organizations continue to impose strict regulations on the property management market. These include safety standards, legal compliance, and tenant rights. Breach of these rules can easily lead to legal issues, monetary fines, and lost trust of customers. Property management software programs enable real estate professionals to ensure compliance and avoid risks.
Cloud-based and SaaS software. Cloud computing and the Software-as-a-Service model are some of the key drivers behind property management growth. Subscription-based cloud-based solutions can benefit real estate businesses of any size. Companies that earlier relied on free property management software with limited functionalities or wasted employees' time on day-to-day tasks, such as maintenance management or processing of online rental applications, now can pay for SaaS solutions without investing significant sums of money in custom software development.

Now, let's talk about the main restraining factors that slow down property management software market growth and the challenges that real estate companies face in the real estate software market.

Main challenges and restraining factors

Despite the market's steady growth and widespread adoption of property management tools across the real estate industry, several factors still can slow down this sector's expansion.

Integration with existing systems. Property management systems need to integrate seamlessly with existing software organizations use, including CRMs and accounting tools. Often, these solutions use outdated technologies and different data formats. These issues can seriously affect custom PMS development and integration of off-the-shelf solutions. Real estate companies may encounter delays or increased costs associated with digital transformation.
Data security and privacy. Data security is one of the primary concerns across various industries, but real estate companies deal with almost unmatched amounts of private data and financial records. Property management software handles such sensitive information as tenants' personal data, lease agreements, payment information, and more. Data breaches can lead to significant repercussions, lawsuits, financial penalties, and loss of customers' trust. The developers of the best property management tools constantly update security measures and ensure compliance, but real estate companies still need to pay extra attention to the cyber security of owner and tenant portals.
High costs of implementation. Implementing even basic property management tools can lead to additional costs that real estate companies may not be ready for. It is not only a subscription price or the cost of building custom software. Organizations also sometimes need to invest in new hardware, migrate data from legacy systems, and train employees to use PMS efficiently. For independent landlords or small property management companies, these costs can become a real challenge. But today, it is difficult to imagine rental property management or keeping tabs on multiple commercial properties without property management software, so in order to stay competitive, these real estate businesses still need to invest in PMS.
Resistance to change. The real estate industry can be really conservative sometimes, and some professionals resist adopting new technologies. The majority of property managers already use PMS for tasks such as automatic rent collection or maintenance requests management, but some people see new systems as too complex or simply don't want to alter existing workflows.

Now, let's talk about the latest trends in the property management system industry and how they will shape the market in the next few years.

Key trends in property management software

Several property management technology trends are influencing the development of this sector and will determine how properties will be managed in years to come. Let's talk about them some more.

Implementation of IoT and AI technologies. Today, it is quite difficult to imagine managing commercial properties or running a rental property business without encountering AI and IoT technologies. AI is utilized for advanced data analytics, automated tenant screening, and enhancing customer support. IoT smart sensors are integrated into more residential properties every day and allow property managers to implement predictive maintenance and monitor real-time data for better decision-making and increased efficiency. In the next few years, with advancements in AI and continuous integration of IoT devices, we will witness these technologies becoming even more essential in the property management software market.
Emphasis on tenant experience. Modern PMS for residential property management puts more emphasis on tenant portals and mobile apps for communication between tenants and property managers. These platforms enable tenants to easily pay rent online, request maintenance with a couple of clicks, and receive notifications. This approach leads to higher customer satisfaction and retention, improving business operations. In the future, we can expect to see property management software developers paying even more attention to these features and coming up with new ones that will enhance tenant experience.
Sustainability and energy management. There is a growing emphasis on sustainability and reducing carbon footprint in the property management market. Modern property management systems often include features that enable companies managing rental properties and homeowners to seamlessly monitor and manage energy and water consumption, support waste reduction, and ensure compliance with environmental regulations using IoT sensors to receive accurate data. In a world concerned with corporate social responsibility, real estate companies need to invest in such software to stay competitive and appeal to customers.

Conclusion

The property management software market has shown admirable growth in recent years and will continue to expand due to technological advancements, growing demand for efficient property management tools, and an overall increase in real estate investment worldwide. Every day, more and more real estate professionals recognize the benefits of property management systems and begin to use them in their work. Even with several challenges slowing down the sector's growth, there will be product development companies and property management businesses that will find ways to overcome them and bring the industry forward.