As a property investor, keeping track of your assets with a paper and pen or an Excel spreadsheet can only take you so far. To that end, many investors choose to use real estate investment software to help them manage their portfolios and find the next best potential deal. Still, there are more than enough options on the market. With that in mind, we've created a guide for how to choose the best software for you. Read it over to learn what you need to know before making a decision.
What is real estate investment software?
Put simply, real estate investment software is meant to help you manage an aspect of your real estate business. Typically, these programs fall into one of two categories:
Property management software
As the name suggests, property management software helps landlords and property managers stay on top of the day-to-day operations of running their rental properties. It can help you calculate rental income, collect rent, market properties, and manage leases.
Investment analysis software
On the other hand, investment analysis software helps you vet potential deals to help you figure out which one will be the best addition to your portfolio. This type of software may include market analysis and financial analysis features.
The pros and cons of using software as a real estate investor
Just like any other business investment, using real estate investing software has advantages and disadvantages. Given that, we've listed them below to help you decide whether investing in a software solution is the right choice for you.
The biggest benefit to utilizing a real estate software program is that it can help streamline some tasks for your real estate investment firm. The right property management software can help make managing multiple properties much easier, and the right investment analysis software can help you get clear on the best next step in your investment strategy.
The other benefit is that it can help keep you more organized. As a property investor, you likely have more than enough things on your plate. Staying organized will help you stay on top of everything so that you can feel confident you're capable of continuing to earn your existing rental income while also getting ready to expand your portfolio.
First, these services often aren't free. Usually, there is a monthly fee attached, and sometimes, it can be quite steep. If you're going to go this route, you need to be willing to fork over some cash in exchange for the added convenience.
Additionally, no one software solution likely will meet all of your needs. While one program might help you manage cash flow for your portfolio, you may need another to help you conduct an investment analysis. It's a good idea to keep searching for an investment property software option that meets most of your needs. But there's no one-size-fits-all solution.
How to choose the right real estate software program for you
If you've looked at the above advantages and disadvantages to real estate investing software and decided investing in a software solution is right for you, the next step is to figure out the program that's the best fit. In light of that, we've listed a few important steps below.
Figure out your goals for your real estate investing software program
First, before you research any software programs, you must get clear on what services or solutions you ideally would like your program to provide. Are you looking for property management software that will help you manage a portfolio of multiple properties? Or are you looking for an investment analysis program that will help you zero in on the best potential deal?
In this case, it can be helpful to think about the tasks that you're having trouble managing on your own. Maybe you're a landlord who doesn't want to hire a property manager but needs help managing the day-to-day operations of owning a rental property. Alternatively, perhaps you're an investor who wants to make conducting your financial analysis much easier.
Research potential software solution options
Once you're clear on how you would like to use software to help you find or manage your next income property, spend some time researching the available software programs on the market. There are plenty of options. You just need to find the ones that will best line up with your goals.
After you've familiarized yourself with all of your available options, it can help to make a chart comparing and contrasting them. Be sure to make a note of any key features they have, their price point, and whether they are cloud-based and mobile-friendly.
Demo your top picks
Once you have your short list of candidates, consider requesting a demo of your top picks. These days, most software companies will offer you a limited-time free trial of their product. Taking the time to do a free trial will help you see if that particular brand of investment management software will actually meet your needs. It will give you a chance to discover what you like about the product and which needs won't be served by this particular option.
Keep in mind that using a new software solution will likely come with a learning curve. Whether it's attempting to figure out how its valuation tool works or understanding its financial analysis charts, you're going to need some time to work out the kinks. So be sure you leave enough time to figure out whether you like the software during your free trial.
Choose the best option for your real estate business
By the end of your demo period, there should be a clear front-runner. Odds are that you will have one software option you think is easier to use than the rest or that best suits your needs. Once you're sure which option will work best for you, contact the company's sales team and sign up to use the product.
Remember, if you start using a product and find it's not functioning the way you would expect, you can always cancel it and try again with a new product. These agreements are rarely set in stone. Keep trying until you find a product that truly suits your needs.
The bottom line
Investing in real estate software may sound tricky, but the reality is the process is little more than trial and error. As the consumer, you're in the driver's seat. You can keep shopping around until you find a product that works for you. With that in mind, use this as a guide to help you get started. We're willing to bet that once you find the right software solution, running your real estate business will get much easier.