Whether 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, you need to understand the benefit of using real estate investment software to create your rental property cash flow, rates of return, and profitability analysis.

Real estate investing is, after all, about the numbers, and as such presenting those numbers correctly in a presentation that one can interpret easily is crucial o making smart investment decisions.

Real estate investment software (at least the better ones) include all the required calculations concerned with real estate investing so you don’t need to know how to compute even one formula. Plus they create the reports you can use for presentations to customers, partners, and lenders so 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.

In this article I want to show you the benefit of using real estate investment software for rental property analysis and then offer you some tips on how to select the software solution that’s right for your business application.

The Calculations

Real estate investing decisions require the examination of a number of essential measures and rates of return to avoid just guessing whether a certain rental property is a good investment. And once you learn the formulas, some of these returns can be calculated quite easily. Gross rent multiplier, cap rate, and cash on cash for example and can almost be calculated in your head or with nothing other than a pencil and paper.

Others, however, present more of a challenge.

Calculating capital gains, depreciation, and other elements associated with tax shelter, for instance, requires some knowledge of taxes, and those for time value of money like internal rate of return, net present value, and financial management rate of return require a financial calculator.

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 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.

You can create these reports with any spreadsheet program, but I can assure you that you will spend hours to achieve the professional-quality you’re looking for. Even if you’re fortunate enough to obtain a ready-made template for a few reports, and perhaps can avoid creating them yourself, you still would lack a host of other reports required for a thorough real estate analysis.
  
A good real estate investment software solution creates a wide-range of professional quality reports that are presentation-ready automatically. 

How to Select

Once you decide to start using real estate investment software then you must determine which solution best fits your desired purpose. Here are some tips.

1) Residential agents who plan to work with income property buyers and sellers only occasionally 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 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 $300.00.  

Let me conclude.

It is understandable why analysts relied on long hours and financial calculators for rental property analysis prior to computers and software. 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.