Differences between residential and commercial property management software
Whether you own an apartment building or an office building, keeping it up and full of tenants can be time consuming and stressful. Often, people that own real estate that they do not personally live or work in, hire an outside property management company to do this for them. The best property managers use property management software to make their jobs and their lives easier.
There are a number of differences between residential and commercial properties and therefore there will be differences in the software that is used for property management purposes. Obviously, residential properties are those where people live and commercial properties are used for business and to (according to dictionary.com) “make a profit.”
However, under that definition, there is a fine line. As the owner, or for the owner, if you are the property manager, you are making money off of the property that you rent out. Therefore, apartment buildings and condos can be classified as commercial properties because you are using them to make a profit.
One of the biggest differences between the two types of property is the tax rate. Commercial properties are taxed at a much higher rate than residential properties are taxed. This is done to make it easier for people to be able to afford homes. Therefore, having the right commercial property management software is essential so that the IRS does not come knocking on the door wondering where its money is.
The right online property management software can help you set the proper tax rate as commercial property tax rates are based on a formula that includes the total income generating capacity of the property at its “highest and best” possible use. In English, that is the most money that can possibly be produced in the building. That number is taken into consideration along with its relation to the actual income that is being derived from the property at the time of the assessment. Again, for those that do not speak tax code, that is how much profit the building actually makes.
To further complicate things, these numbers are generally set or believed to be set quite high. Landlords and property managers alike feel as their property is over assessed at values that are much higher than they should be. They believe that this is done in order to have them pay more in property taxes than they believe they should have to.
In addition to taxes, negotiating commercial leases is much more complicated and difficult than negotiating leases with individuals in a rental property. Again, property management software, like the one available through Unit Assist can help you with both of these and any other issues that arise, regardless of property type.
Call them, try it out, and find out just how much easier your life can be with the right program to help you with the everyday tasks that come with owning and/or running a property. A 30-day free trial is available along with tech support that will remain free for as long as you use the software.