It is a great tool that can save your time, brain efforts and even money. Both beginner and experienced investors can take advantage of real estate investor software. You can do your business at a higher efficiency. Let’s see how.
What Is Real Estate Investment Software?
It is a tool that can be used to analyze the real estate market and investment property to make a wise investment decision. The tool can save the time you have to spend on market research and analysis of each property. There are different types of real estate software you can use depending on your investment needs. For example, some tools are suitable for short-term and long-term rental properties. These tools do have some features that can be helpful in other types of real estate investments. However, software specially developed for rental properties is not perfectly suitable for other types of property.
Analyzing Rental Properties With Real Estate Analysis Software
What does rental property analysis include? What kind of information and details do you need about each property? How can you use this information and details to determine the viability or potential of a property for investment? Following are the three major elements you need to analyze a rental property:
- The amount of money you need to invest in a property.
- The revenue that property can generate.
- The recurring expenses you are going to cover to operate your property.
With this software, it is easy to collect data, calculate values and use them to analyze a rental property. These are the results you are going to use as metrics to calculate the ROI of the property.
Following are the three metrics you will use to analyze return on investment:
- Cash flow
- Cash on cash return
- Cap rate
These metrics give you the information about the property you are interested in.
The cash flow metric will tell you about the exact amount of money that property will generate for you each month after deducting the expenses. So, it is the profit your property will generate.
The remaining two metrics, the cap rate and the cash on cash are similar to one another with one difference. The cash on cash returns accounts for the cash you have invested in your property. This amount does not include the money you have borrowed. The cap rate, the third metric does not account for your financing method and assume that the price is paid in cash.
Key Features Of A Real Estate Investor Software
From marketing the rental property to scheduling maintenance, rental property management includes a lot of work. The purpose of using this software is to automate, modernize and grow. To make your investment more productive and profitable, the software must have the following features:
- Lease management
- Easy reporting to stakeholders
- Generating liquidity forecasts
- Data management
- Document management
- Overviewing all the tasks on a single dashboard
- Deciding faster with real-time statistics and KPIs.
A reliable tool allows you to spend your time efficiently and effectively, improve overview and ROI, and increase tenant satisfaction.