Does Your Business Need Real Estate Investment Software?

Real estate investment software helps investors build and manage portfolios, analyze property data, and influence decisions based on that data. From simple rental valuation calculators to more comprehensive data analysis and investment forecasting tools, the right software package considers all aspects of real estate investment and integrates them into its platform.

This guide will help you determine how real estate investment software will benefit your business, and how you can mitigate risk, maximize profits, and devour data with it. 

5 Top benefits of real estate investment software

1. Strong property analysis

If you have potential investments on the books, the more tools available to you, the better. 

If you’re looking to invest, supportive tools are always needed, especially when analyzing a property’s investment potential or even the potential of a new market or strategy.

A lot of software includes things like financial modeling for calculating cash flow, cap rate, and ROI, as well as comparative market analysis to determine fair market values without endless research, and hours hovering over spreadsheets. They also streamline data from comprehensive risk assessment tools.

Software like Privy, can help conduct instant market or property research for you so that you don’t have to spend days, weeks, or months browsing outdated listings and recrunching numbers.  

All this gives you better insights into true property analysis, and a better, more holistic understanding of the data, helping you figure out what’s going on with your potential properties.

2. Cleaner portfolio management

When you have a growing real estate portfolio, it can be difficult to manage it all without software. It can especially be very time-consuming, which can distract you from uncovering all the available profits and gaining the maximum ROI. Real estate investment software can help in several distinct ways. 

Real estate investment software can track the performance of your properties, including reporting on key KPIs (like annualized return, gross yield, and NOI) occupancy rates, rental income, operating expenses, and many more. Software can feed you a constant stream of reports and customizable data to assist with your decision-making and well, keep you informed on what’s going on. And through all this, the right piece of software keeps everything organized by property in one, easily accessible platform, eliminating the struggle of digging through records or devices to determine what’s really going on within your portfolio.

Some software also lets you share out CMAs (comparative market analysis), this property information can help you monitor your properties, but also keep a pulse on the surrounding market— when to sell? When to hold? CMAs help you analyze your portfolio in a larger context.

3. Better financial management

Financial management is crucial for any type of real estate business. Unless you somehow have unlimited funds, you’ll need a way to keep track of your cash flow from investments to expenses. Real estate investment software helps with this by giving you tools to truly keep an eye on all your financial information.

Three major features of most real estate investment software focused on financial decisions include expense tracking, income tracking (from rental properties to all revenue sources), and tax preparation. Tax season is a lot easier if you have the tools to help root out all the best deductions with all the documentation super handy.

4. Heightened decision making

To find success in real estate investing, you are going to want to try to make as many informed decisions as possible. The more informed your investment decisions are, the more risk you can keep outside the proverbial walls. So using real estate investment software, you can leverage analytics and data to make the most informed investment choices possible. 

Additionally, you can study market trends, because all that constantly-updated information is at your fingertips. This helps develop well-performing strategies, instead of just tossing things at the wall and seeing what sticks. And finally, many software packages offer A/B testing, so you can play out scenarios and outcomes without actually investing a dime.

5. Increased efficiency

Automation and streamlined processes can significantly increase efficiency, saving you precious time and reducing mistakes. When you aren’t doing math on a napkin and leaving it to software, you are going to get better results, and much faster too. This means complex calculations can be completed in seconds with automated tools. 

Additionally, many software packages include integrations with other systems, including property management systems and financial software. You can often manage your investments on the go with mobile-friendly applications that make it easier to keep track of things and keep your data literally at your fingertips.

So is real estate investment software the right choice for your business?

Ultimately, while the quick answer is a resounding yes, some businesses may not need real estate investment software. However, if any of the five points resonate with you, then you probably need real estate investment software. 

1. Size of your portfolio

The larger your portfolio, seemingly the bigger the need for real estate investing software. It helps you track all the details and data, so you don’t get overwhelmed with paper. It can also help you manage and track multiple properties at once, eliminating that mess. 

However, if you have a single property or are just starting, software can still help you overcome the learning curve, and guide you towards best practices.

2. Complexity of your investments

In the same vein, the more complex your investment strategies, the more you’ll want software to handle the data. When you get into a new specialty, you want to ensure you’re prepared to make the best investment decisions. Or if you are transitioning into commercial or multi-family properties, that comes with a lot of data, from expenses and income to regulatory details. The right tools are essential to keeping it all straight. 

3. Growth plans

If you plan to expand your portfolio significantly, investing in software now can help prepare you for future growth. Scaling with your growth eliminates the step where you have to organize everything to take it to the next level. Growth comes with growing pains, so think of real estate investment software like taking Tylenol before the headache starts.

4. Budget constraints

Real estate investment software usually comes out on the positive side of its ROI, but sometimes these software packages can get expensive. And you might need to hire someone just to make sense of all the data. So make sure to find something that has great ROI, meaning can make a big impact dollar for dollar on what you’re spending. There are a lot of incredible, affordable tools out there.  

5. Need for detailed analysis

Finally, when it comes to analyzing risks and managing data, real estate investment software is the best choice. This is where the meat and potatoes are, the perfectly cooked center. Data analysis is key to growing and managing your business and is much more streamlined with software.