Successful management of real estate properties requires a significant amount of skill and due diligence. The vast number and type of calculations to make in order to manage properties accurately can be mindbogglingly challenging. Real estate investors have a reprieve as they can invest in the acquisition of real estate investment management software available in the market. Here is an overview of such notable software.
RealData is considered one of the best real estate investment software in general given its ease of use platform coupled with multiple features and capabilities. Among the various features that RealData provides include analytic tools, data presentation, as well as marketing abilities for both residential and commercial real estate properties. The city is also equipped with various decision making and analysis tools capable of simulating different management inputs in the management of properties.
ZilCulator is a freemium real estate investment software that is greatly suitable among new beginners and aspiring investors. Among the various tools that the platform offers include calculators that can analyze different kinds of real estate calculations such as market cap rates and mortgage rates. The platform can also simulate cash flow analysis while also enabling the investor to compute tens of expenditures such as repairs and new investments.
CREmodel is a multi-family property management software that doubles as a suitable apartment, project, and shopping center management platform. The software is well integrated with various spreadsheet templates and functions that enable the property investor to undertake different kinds of presentations and Excel-based calculations. Among the various analysis tools that CREmodel uses include return on investment analysis, cash flow analysis, cash-on-cash return analysis, and loan-to-value computations.
Real Estate Analysis Software LLC
Real Estate Analysis Software LLC offers combinations of different functions on one convenient platform. The software is particularly optimized for helping investors to analyze and simulate cash flow and return on investment before deciding on whether to invest in a property or sell it. Additional notable features that the Real Estate Analysis Software offers include a lease vs. buy analysis that gives an investor a chance to visualize how making either of the investment decisions would affect their cash flow and goals.
Software like Real Estate Analysis Software LLC, CREmodel, ZilCulator, and RealData help make investing in real estate an easier process. Introducing technological advancements like these is helping to revolutionize the real estate investment industry and bring it to the future.
Investing in real estate has a number of advantages over other types of investing. For instance, if you buy $100,000 worth of stock in a company and the company goes under you may end up losing your entire investment. While you may end up in a situation where you need to sell an investment property at a loss, you will rarely ever lose your entire investment. Conversely, however, real estate investments also incur ongoing expenses that you have to factor in before making the investment. Unlike a stock or a bond that has a value set by the market, the true value of real estate investments can be much harder to assess. To determine the true value of an investment property the following three key components need to be considered
1. Income potential
Unless you are just purchasing land, most types of real estate investments will have some type of income potential that has to be factored in when considering the value of a property. There are a number of ways to determine income potential depending on the type of property it is. To determine income, you need to determine the capitalization rate. Put simply, the capitalization rate is the projected annual income from the gross rent multiplier divided by the current value of the property.
One of the most common methods of evaluating real estate investments is to compare the property you are considering investing in with other comparable properties in the area. While there are a number of variables that will affect both the price and income potential of the property you are considering versus other properties, finding properties that are legitimately comparable and accounting for differences can give you a fairly accurate estimate of what you can expect from your property.
3. Capital Asset Pricing Model (CAPM)
A CAPM is a comprehensive evaluation tool that considers a number of intangible variables such as the safety of the neighborhood and the age of the property and compares it to the expected ROI of other types of investments. For instance, you can expect an older rental property to need more major repairs and you can expect high tenant turnover in less desirable neighborhoods. These will all have an impact on your rental income. If a real estate investment is likely to have a smaller ROI than another investment tool, then it doesn’t make sense to invest in real estate.
Real estate investment is among the most successful field of investment in the world today. The investment is projected no to go down anytime soon as investors are flooding in each day. Just like any other form of investment, an investor needs to have some financial zeal to engage in this business. But most investors don’t always have bundles of cash on hand. Most of the top real estate investors borrow money from real estate fund lenders. Below are some of the most popular lenders for real estate credit and investment property loan lenders.
1. Hard money lenders
For many years now, Hard Money lending has been a crucial resource for almost all types of investments. It involves offering funds in the form of short-term credits of between 6 to 60 months. Hard Money may charge high interests and in most cases, may not have forestallment penalties. Traditionally, Hard Money lenders have been processing funding very fast and few requirements.
2. Transitional Funding
Transitional Funding is arguably the easiest and speediest lending method for most investors in real estate assets, especially in house flips and wholesale deals. More so, this type of lending is among the least popular forms of real asset financing. Transitional Funding works best for the investors who wish to be in, on, out and receive their real estate payments quickly. The terms of this funding method are too good that some people think it is a scam until when it works for them. Transitional Funding is solely for investors who do wholesale real estate deals. In Transitional Funding, an investor gets 100% funding, and their creditworthiness, income proof, and assets do not have to be checked. Besides, these types of lenders do not have to require the production of full title reports, appraisals, or insurance.
3. Private Lending
As the name suggests, Private Money Lenders are people with money and wish to loan it on real estate. These individuals consist of all kind of people with savings and investment or surplus cash intending to receive passive income. Private Money lenders are flexible and allow investors to negotiate their terms of lending. Their terms vary from one investor to another. The popularity of Private Lending has marked a significant rise due to more awareness of the opportunities they provide.
Hard money lenders, transitional funding, and private lending are all great ways that real estate investors can receive a loan and not miss out on a potential real estate investment.
Investing in the real estate industry is one of the lucrative options available in our time. Before making a move to actualize your ambitions, due diligence should be exercised, especially since the sector can be quite volatile and risky. Here’s an outline of 4 important questions that you should ask yourself before delving further with your ambitions in real estate investments.
1. Why do you want to invest there?
The first question revolves questioning the actual ambition that drives you to think of investing in the real estate industry. It is meant to get you back to the drawing board and evaluate the precise reasons as to why investing in the real estate industry may be beneficial to you. As a beginner, you may need to focus more on the various benefits of investing in the real estate industry. Comprehensively understanding your purpose for the investment gets you moving on the right track.
2. How financially stable are you?
This question revolves around the broad concept of how to finance your real estate ambitions to ensure that you meet the goals you have set. You may need to look at your credit score and whether it qualifies you to obtain financing for your real estate projects or not. In case you have decided to pursue alternative financing options, such as partnerships, self-financing, and equity financing, you will need to exercise due diligence before investing in real estate.
3. How much of risk can you take?
The real estate industry is a risky business. Before taking a step further, you should understand the various risks in the real estate industry and whether you are willing and capable of taking them without jeopardizing your capital. Your risk tolerance levels will advise you on the kind of properties to invest in.
4. Are you self-motivated enough?
Profits in the real estate industry may be hard to come by, just like in any other business startup. You may, therefore, find yourself going for months without having made a single sale. Determination during such a tough time is crucial as it keeps you going. Being self-motivated is, therefore, a crucial quality that you should endeavor to propagate in your career as a real estate investor.