Provo Company's Software Helps Expedite Rent Payments and Maintenance Requests Online
June 13 2004
The idea for Property Solutions International Inc. of Provo began when founder David Bateman's wife, a property manager for several apartment complexes for Brigham Young University students, complained about difficulties she had collecting rent and processing maintenance requests
That spurred Bateman, then a business administration major at BYU, to try to find a solution. He also created two Web sites, DearElder.com and MissionMailbox.org, both of which expedite letter communications to missionaries in remote countries.
In 2002, Bateman surveyed 450 property management companies nationwide and found 66 percent were using antiquated DOS-based software systems or cumbersome paper ledges to manage their units and none of them allowed their residents to pay rent online because of prohibitive credit card transaction fees.
"We came up with an electronic check solution that allows residents to transfer funds from their bank accounts to the property management company's accounts for just a $3 fee instead of the prohibitive $20 to $30 fee for credit card transactions," said Benjamin Zimmer, Property Solutions' executive vice president. "That pushes the fee, which is still affordable, to the resident and it doesn't eat into the property management companies' profits."
Once the survey was completed, Bateman began fleshing his concept for Vantage XP, a Web-based software system that would allow property management companies to accept and automatically record rent payments and maintenance requests online.
"Although online payment systems and property management software already exist, most property management companies have Web sites that are detached from their management software," Bateman said.
"That means they have to hire a Web designer to upgrade or edit their Web site for them when they change their pricing. Our software, however, sends the information directly to the company's database without the need for a manager to enter the data. That allows the company to focus more on marketing and maintaining the property."
Implementing Vantage XP, now renamed ResidentWorks, could save a property management company with 1,000 apartment units about $25,000 annually, Bateman estimated. "The savings will come in reductions in staff, quicker processing of rent payments, savings in credit check fees and Web site building costs, and potentially higher occupancies because of an increased Web presence."
But convincing tech-averse property managers to use his software is a major challenge, Bateman said. "Our sales cycle typically takes between two weeks and up to five months because it's hard to get those in charge of technology to make the changes," he said.
To overcome their reluctance to upgrade to Property Solutions' software, the company changed its pricing structure. "To upgrade to ResidentWorks, it would cost between $995 and $2,500 plus an additional $99 a month in Web hosting costs for every 250 units. Previously, companies had to pay $5,500 per apartment complex regardless of size plus another $2,499 to set up a Web site."
ResidentWorks could become a key tool in the leasing industry as companies become more aggressive in their efforts to streamline their operations and market their apartment properties in response to the low interest rate environment, which has prompted more renters to become homeowners, Bateman said.
According to a 2003 Travelocity study, 36 percent of apartment searches are conducted online, compared with just 5 percent to 10 percent in 2001. "We also provide tools where companies can monitor what advertising campaign brings the most traffic to their Web sites."
Another challenge is capturing major property management clients -- a strategy that could help them access other markets and build reputation, Bateman said.
"We're targeting clients that have 20,000 units to 30,000 units, and that's hard. But once we accomplish that, that could open doors for us to market our software," he said. "We're now in talks with Western National Group of Irvine, Calif., which manages 24,000 units in California. Western's president Steve Donohue has joined our advisory board as a member, and he provides insights on how we're building our software and marketing it."
Most of Property Solutions' clients are in northern Nevada, Idaho, California, Texas and several other states. But its software can also be found in about 17 apartment properties in Utah County including Glenwood Intermountain Properties, which owns University Villa and Cambridge Court, and HVM Smith Management, which operates Centennial Apartments and Arcadia Roman Gardens in Provo.
David Bateman, Benjamin Zimmer, Michael Trionfo
Developer of property management software
Headquarters at 522 S. 100 West in Provo
Work force: 17 employees