Real estate investment software is used regularly by real estate investors and agents to create cash flow, rates of return, and profitability analysis presentations for rental properties.

The motive is straightforward: real estate investment software enables the analyst to crunch hundreds of numbers required to evaluate an income property’s immediate and long-range financial performance easily and instantly (or at least it should) and then creates a range of reports the analyst can print and present to others.

We will assume that each software solution makes correct calculations for the numbers they provide, though must also state that each solution is diverse about what numbers and reports are crucial and/or might benefit the analyst’s real estate investing objective.

Naturally, which calculations and reports are most crucial and important is subjective because it all depends on what you (the investor or agent) seeks to accomplish with the software (and, of course, your budget). Here’s the thought.

Whereas, a residential agent might only work with investment real estate occasionally and not require after-tax cash flows, another agent might be building a real estate investing business and want to include all the elements of tax shelter. Likewise, whereas one user might be satisfied with fundamental reports such as an APOD and proforma income statement, another might want to dig deeper and add reports such as sensitivity and scenario analysis.

Fair enough. But analysts might also want to look for other options in real estate investment software that would maximize and add flexibility to his or her ability to create property performance data. Here are some examples:
     
1) Dollar symbol - The ability to change the dollar symbol would be helpful to analysts in different countries who might prefer that the reports reflected perhaps a Euro, Pound, Rand or Yen symbol.

2) Passive losses - The ability to select between passive losses carried forward and losses taken currently would be helpful to analysts who would like to make revenue projections based upon the current IRS requirements (i.e., passive losses carried forward) or not.

3) Amortization - The ability to choose Canadian amortization would enable analysts to select the correct loan amortization for Canada.

4) Vacancy allowance - The ability to modify vacancy rates in revenue projections would enable the analyst to show one vacancy rate at acquisition of the property and several other vacancy rates (perhaps lower rates) over the holding period of the property.   

5) Future selling price - The ability to choose how the proforma income statement calculates the property’s future selling price between various methods enables analysts to decide whether it should be based upon, say, a cap rate that uses the current or next years net operating income, gross rent multiplier, inflation rate, or a fixed price.

6) Rent scenarios – The ability to create various rent scenarios enables the agent or investor to examine the property’s cash flow and rates of return based upon changes in rents (i.e., best and worse case rent scenarios).

7) Real time calculations – The ability to watch calculations made on the forms enable the analyst to see instantaneously what affect the data entered has on the property’s financial performance.

The list is not exhaustive, but hopefully you get the idea. That real estate investment software can offer additional options and features that can maximize your ability to perform a rental property analysis and better-accommodate your business objectives.

When you make the decision to purchase real estate investment software, just be sure to examine each solution carefully to be certain that it includes the options of most interest to you.