For commercial real estate professionals, increasing efficiencies is a popular topic of conversation, and for good reason.
Running an efficient shop leads to a plethora of benefits for both landlords and managing agents (or the property owners and outsourced portfolio managers) – it increases the amount of time saved, it allows for the allocation of money to be better spent and it ultimately provides a robust infrastructure to increase the ability to scale and grow.
But there’s a lot that goes into achieving the aforementioned. If owners opt to manage their portfolio as landlord-property managers, then the right tools need to be in place to ensure maintenance tasks, key documents and other integral variables can be managed.
And for property managers running a commercial real estate agency in today’s climate, there needs to be an open embrace for technology adoption to provide world-class service to their owners. Taking technology serious serves up incredible results for today’s commercial real estate (CRE) professionals. But conversely, the opposite is even more detrimental than it ever was before. Running a business that’s fuelled by technology is non-negotiable in 2019. CRE professionals can risk falling behind if they're slow to adjust – here’s why.
Without cloud-based software, you can’t go to the next level. It’s that simple.
We have been beating the proverbial drum on the importance of abolishing traditional property management methods for years. That means spreadsheets and server-based software. Nothing has changed today. We still hold firm on adopting technology to not only thrive, but to survive, and the reasons are clear-cut: the business landscape has changed and competition is fierce, which means businesses, property managers and landlords alike need to adapt.
The best businesses – and what we define by ‘the best’ is the most successful, high-growth businesses – those that are fully invested in technology, digital solutions and have a proactive mindset. Typically, you shouldn’t change only when a disaster strikes, but instead it’s good business practice to anticipate the change ahead of time and pounce on the opportunity to better your market position. Cloud-based software gives you that flexibility to scale up or down, but also more importantly to maintain focus on what truly matters: that being your area of business.
And yes, that’s one of the key things to highlight: successful operators don’t just consider using technology down the track when the time’s right or when a key competitor forces them to because they have demonstrated to be more efficient cost-effective, etc. Commitment to the cloud is required from the beginning, and it’s all in the name of taking a business to the next level.
So with that being said where does growing a portfolio sit amongst all of this?
Okay, so, in order to scale a portfolio landlords need capital and to invest it in high growth potential assets. And of the best ways to continue building on capital is to save in other areas such as reducing costs that are synonymous with poor resource allocation. Time lost equals money lost, and that has a detrimental effect on the financial investment pool.
Cloud-based property management software reduces risk and drives costs down purely by automating key tasks to make day-to-day initiatives a breeze – this means that more time can be spent on revenue-driving tasks. A robust software application allows landlords to focus on playing their part in growing a portfolio while the property management software application takes the pain out of managing maintenance tasks, key dates, arrears, and so on. These things are inherently time consuming and can only be truly automated with a sophisticated, modern system.
It takes time, energy and resources to grow (and manage) a commercial property portfolio, and that’s why time should be spent doing exactly that – not chasing arrears.
You won’t get bang-for-buck with a server-based product
Cloud-based property management software can be accessed from anywhere, anytime – that means on site or off site, and you can have unlimited users, too. This is great for the modern workforce: it allows employers to pivot to more flexible working arrangement, such as working remotely.
This is typically frowned upon by the traditional workforce but with cloud-based software, employees can access the same systems, documents and data that’s available in the office from remote sites. It really is amazing how cloud-based technology is not only affecting the bottom line of organisations, but also the morale of their workers, too.
Now, technically speaking, with server-based software there are so many limitations attached to it. For example, it can cost you more dollars to increase the amount of users you have on your account and the set up fees can be astronomical – they’re typically in the tens of thousands. Server-based software requires a physical hardware to be bought, installed and maintained. Cloud-based software requires no set up costs and no hardware, and because of that users have a lot of flexibility around how you use the application.
With that level of flexibility, you can scale up, down, or cease use of the software if the business direction changes. But on the contrary, server-based software has you locked in by the mere fact that tens of thousands of dollars have been spent to set up and go-live, so there’s naturally going to be pressure to make it work. It’s certainly not an ideal arrangement for the modern day commercial real estate professional who needs to be agile, lean and adaptable. Server-based platforms fail you there.
Most server-based software providers have stopped updating their product...
This is a huge concern if you’re a landlord or a commercial property manager today. It’s not ideal to be using a platform that has literally thrown in the towel and ceased improving its product. And really, server-based products were designed for businesses of the past in a time before the digital economy transformed all industries.
Let’s think about the end-to-end process of setting up a server-based product: you set up a physical on-or-off-site server and install the software (high cost); you pay ongoing support costs such as providing power to the server to run and keep it cool (high electricity bills, more cost), and tacked on security infrastructure to make sure data is not stolen (expensive, and is it really safe?); when it is time to update the software you have to apply and install manually (who has got time for that?); and finally, if all of this is done wrong you’re left with an inaccessible program and therefore a period of downtime. Not good at all.
Cloud-based software just does what server-based software does but better, and it’s built for the modern world where mobile access is an expectation – and so it should be, particularly for high-performing businesses. It makes sense why so many tech-first businesses are thriving – from accounting to marketing, and project management to property management – businesses are now reducing their risk for failure and increasing their growth potential when the cloud is at their core.
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