Why Smart Professionals Rely on Real Estate Investment Software for Rental Property Analysis

Smart professionals rely on real estate investment software for rental property analysis because they understand the benefit.

Unfortunately, however, the real estate community at-large has still not caught on.

So if you’re a real estate agent working with (or desiring to work with) rental properties or an investor who buys and sells rental income property, then this one is for you.

This article will help you understand the benefit of real estate investment software. And how it is able to create quality rental property cash flow, rates of return, and profitability analysis presentations for you effortlessly.

We will also offer you some tips on how to select the software solution that’s right for your business application.

Let's begin with the logical premise.

Real estate investing is about the numbers. Therefore, anyone engaged with real estate investing who wants to be successful is simply smart to present those numbers correctly in a presentation that assists in investment decisions.

Real estate investment software enables that process.

The better solutions include all the required calculations without the need for you to know how to compute even one formula. They create the reports you can present to customers, partners, and lenders. You don’t have to hassle with spreadsheets, or have to worry about the formatting to make the reports look good. In most cases, you just fill in the forms, print, and present.

Okay, let's take a look.

The Benefit of the Calculations

Smart investors never guess about whether a certain rental property is a good investment. They make real estate investing decisions based upon careful examination of a number of essential measures and rates of return.

In this case, once you learn the formulas, you calculate a few of those returns such as gross rent multiplier, cap rate, and cash on cash in your head, or with nothing other than a pencil and paper.

Nonetheless, those returns are just the tip of the iceberg, and many other crucial returns will present more of a challenge.

For instance, calculating capital gains, depreciation, and elements associated with tax shelter. This requires some knowledge of taxes. Whereas returns such as internal rate of return, net present value, and financial management rate of return require knowledge of time value of money and at the very least a financial calculator to make those computations.

A good real estate investment software solution will make all these calculations for you automatically and efficiently, including those with tax and time value of money elements.

The Benefit of the Reports

Smart investment decisions also require a range of reports that present the measures and rates of return associated with a rental property’s cash flow and profitability correctly and in a manner that an analyst can interpret easily.

Again, with a spreadsheet program, you can do this on your own. But be forewarned.

You will spend hours to achieve the professional-quality necessary, not to mention the risk you run by omitting a complete set of reports required for the most thorough real estate analysis possible.

A good real estate investment software solution creates a wide-range of professional quality reports that are presentation-ready and do enable a thorough rental property analysis automatically.

Okay, let's switch gears and assume that you have decided to benefit from real estate investment software. Here are some tips.

How to Select a Software Solution

Foremost, the selection you make should reflect your desired purpose. Here are two categories of real estate professionals commonly engaged in real estate investing along with our suggestion.

1) Residential agents who plan to work with income property buyers and sellers only occasionally. You would certainly want the software to create both analysis and marketing presentations, but not necessarily the more robust calculations for taxes and time value of money. You can find this type of real estate agent software solution for under $150.00.

2) Agents and investors who are more serious-minded about real estate investing and want to build an ongoing investment property business. You would most definitely want a real estate investment software solution that includes calculations for taxes and time value of money. You can find this type of more robust software for under $280.00.

Conclusion

Prior to computers and software, analysts relied on long hours and financial calculators for rental property analysis . Now, of course, with the advent of affordable computers and software, it seems a shame for anyone to miss the benefit of using real estate investment software to do the task quicker, with less effort, and more concisely.

Here's to your success.

James Kobzeff is a real estate professional with over thirty years income property analysis experience and the owner/developer of ProAPOD Real Estate Investment Software.