Ways to Choose Real Estate Investment Software

Posted on September 17, 2016 By

images-22Real estate investment software is generally used by agents, investors, appraisers and other analysts seeking to determine the cash flow, rates of return, and profitability of rental income properties. The idea is straightforward: How can I arrive at the bottom line of an income property so I can decide whether or not the investment is worth the risk?

What they want, of course, is a software solution that includes all the crucial calculations and professional-quality reports required for investors to make smart investment decisions with concise data and without any hassle; otherwise they would invest the time to create their own spreadsheet; which they understand is not cost efficient. They prefer to spend their time creating deals more so than they do creating software. Fair enough.

So what is it that professional renal property analysts look for in real estate investment software?

1. The inclusion of crucial cash flow data. The most important concern to those engaged in real estate investing is the cash flow produced by the property. Is it enough to cover the operating expenses and mortgage payment? Will I have to feed the property out of my personal budget or will I be able to pocket some of the cash flow and invest it elsewhere in some other investment?

2. The inclusion of crucial rates of return. How does my investment in this property compare to rate of return of return I might receive compared to other rental properties I might invest in or perhaps other investments I can make? Do the returns meet my investing strategy?

3. The inclusion of calculations for tax shelter. Most serious investors are very interested in knowing what impact their investment in the rental property will have (if any) on their taxes. What will be my tax liability or gain from owning this income property? What will be my cash flow and rates of return after I write off depreciation, mortgage interest, and other tax elements? What can I expect to receive in proceeds once the property is sold?

4. Clear and concise reports. All the data must be complete and presented in manner that is easy for the most novice and inexperienced reader to understand. Otherwise the reader gets lost trying to make heads or tails of the data. The reader must be able to dissect the various cash flows, rates of return, and tax elements effortlessly.

5. Easy to use. It is hard enough struggling to make a rental property deal, so the last thing analysts want to struggle with is real estate investment software. In this case, they want user-friendly forms where they simply enter data and then can rely on the software to automatically make the calculations and create the reports.

6. Affordability. This, of course, is relative to one’s personal budget. But it is safe to say that all the prior objectives can be satisfied by a few real estate investment software solutions priced at under $300; which to some might appear to be a large investment to make for software, but you must ask yourself this question: Are you willing to spend about 300 hours (perhaps more) trying to develop your own software application? If your intention is to make money selling rental property then I would not think so.

Here’s the bottom line.

Agents, individual investors, and all the others engaged in real estate investing want a tool that will help them to make money with rental income property. They don’t want to develop it or have to think about it, they simply want an affordable real estate investment software solution that can crunch all the right numbers required for them to accurately determine a property’s profitability potential inside reports that they are both confident and proud to present.

Real Estate