How Real Estate Companies Can Cut Technology Costs and Increase Net Income

In today’s competitive real estate landscape, companies must constantly innovate to stay ahead. But innovation does not always mean spending more. In fact, one of the most overlooked strategies for improving profitability is cutting technology and other expenses without sacrificing operational effectiveness. Real estate companies should be making money.

Property Management Companies (Third-Party Management)

These operate on fees, not ownership.

Healthy Net Income Margin: 10% - 20% (very strong operators can reach 20 - 25%)

Net Income Margin	What It Signals
<5%	At risk, operational inefficiency
5–10%	Surviving, but fragile
10–15%	Healthy, scalable
15–20%	Very strong operator
20%+	Elite, usually tech-enabled

If a property management firm is under 10%, technology and workflow inefficiency is almost always the culprit.

Owner-Operators (Owning + Managing Properties)

These companies make money from NOI, not fees.

Typical Net Income (After Debt & Expenses): 25% - 40% of Gross Rental Income

Net Income Margin	Interpretation
<20%	Overleveraged or inefficient
20–30%	Average
30–40%	Strong
40%+	Exceptionally well-run

This assumes stabilized assets, not heavy value-add years.

3. Real Estate Tech-Enabled or Platform-Based Firms

These include:

• Portfolio operators with centralized ops

• Tech-forward management companies

• Hybrid service + software businesses
  

Target Net Income Margin:20%–35%

Why higher?

• Automation replaces labor

• Fewer manual processes

• Better reporting and decision speed

What continues to drive up costs? Why Technology Costs Are Rising in Real Estate?

Over the past decade, real estate technology has exploded. Property management software, CRMs, analytics tools, leasing platforms, maintenance systems, and reporting add-ons are now common across portfolios.

While these tools promise efficiency, many organizations end up with:

• Overlapping software

• Underutilized features

• Disconnected systems

• Rising subscription costs
  

The result is a bloated technology stack that costs more to maintain than it delivers in value.

Streamlining Real Estate Operations Through Technology Consolidation

One of the fastest ways to cut technology costs in real estate is through technology consolidation.

Start by conducting a technology audit that evaluates:

• What each system actually does

• How often it is used

• Whether it overlaps with other platforms

• If it supports current business goals
  

Eliminating redundant tools and consolidating workflows into fewer platforms can significantly reduce expenses while improving operational clarity.

Key benefit: Lower costs with fewer handoffs and less manual work.

Embracing Cloud-Based Real Estate Software

Cloud-based real estate software has transformed how companies manage operations.

Compared to legacy, on-premises systems, cloud solutions offer:

• Lower upfront costs

• Subscription-based pricing

• Automatic updates and security

• Scalability as portfolios grow
  

By migrating to cloud-based property management and operations platforms, companies reduce infrastructure expenses and ongoing IT maintenance while gaining flexibility.

This shift alone can result in meaningful long-term cost savings.

Using Automation and AI to Reduce Operational Costs

Automation and artificial intelligence are no longer optional in real estate operations.

By automating repetitive tasks such as:

• Data entry

• Reporting

• Appointment scheduling

• Maintenance coordination
  

Companies can reduce labor costs and eliminate human error.

AI takes this a step further by:

• Identifying trends in real time

• Flagging anomalies automatically

• Supporting faster, data-driven decisions
  

Instead of adding headcount, real estate companies can scale operations using technology leverage.

Negotiating Technology Vendor Contracts

Vendor contracts are often a hidden drain on profitability.

Real estate companies should regularly review:

• Software licenses versus actual usage

• Features that are paid for but unused

• Long-term contracts that no longer reflect operational needs
  

Many vendors are willing to renegotiate pricing, especially when consolidation or cancellation is on the table. Even small adjustments across multiple contracts can result in substantial annual savings.

Why Training Reduces Technology Spend

Technology that is not fully adopted is wasted spend.

Investing in employee training ensures:

• Higher adoption of existing tools

• Fewer errors and workarounds

• Reduced need for additional software

• Better return on technology investments
  

Well-trained teams extract more value from fewer systems, which directly reduces overall technology costs.

Preparing for Future Growth While Cutting Costs

The goal of reducing technology costs is not to slow growth. It is to fund it more intelligently.

Savings from consolidation, automation, and smarter vendor management can be reinvested into:

• Portfolio expansion

• Marketing and leasing initiatives

• Customer experience improvements

• New market entry

This approach allows real estate companies to grow while maintaining lean, efficient operations.

Ready to Improve Your Net Income?

Most real estate companies are not underperforming because of market conditions. They are underperforming because their systems were built to record work, not optimize it.

Real Ops helps real estate operators increase net income by:

• Eliminating technology waste

• Automating high-impact workflows

• Consolidating overlapping systems

• Applying AI where it actually moves margins
  

If your net income margins are below where they should be, the opportunity is likely operational, not revenue-related.

Visit https://realopssolutions.com to see how Real Ops helps real estate companies run leaner, faster, and more profitably.