4 Pain Points in the Real Estate Business and the software to solve them
Buying real estate property is challenging, but managing your real estate business and analyzing its performance is often said to be a greater challenge. Spreadsheet and excel are not able to keep up with the dynamic nature of real estate management nor does it have the capacity to analyze and project proper and accurate real estate financial projections.
Also, many accounting and property management software may not have the features to handle both the tedious management of the real estate and the complexity to offer financial models to track the performance of those kinds of assets. Therefore, real estate business owners need the proper software that can do both.
In this blog, I will identify 4 key pain points that real estate owners face with accounting and management of their assets. The right software can not only provide a solution but as well as having the ability to project financial performances.
Messy Unorganized Data
Bookkeeping, rent roll, vendor payments, lease management, tax filing, and property and resource management can be a serious headache. The list goes on with how much data you need to collect and organize. On top of that, you need to sort through the data of your operations to compile for tax purposes and the overall performance of your business.
This may mean you will need to hire and manage different kinds of people for a variety of tasks to collect information largely through spreadsheets, hence data becomes highly unorganized and scattered. By doing this day in and day out can be very time-consuming and eventually cause you to burn out.
Therefore, software that offers a centralized platform that collects everything in one place is crucial to the aggregation of your data from different data sources.
Hiring an Office Manager or an Assistant to Manage your Assets
Small and mid-sized properties are usually taken care of by independent property managers whereas larger properties or portfolios tend to need to hire large property management firms. Unfortunately, this may cause owners to sometimes distance themselves from the daily challenges faced by their tenants and customers which might cause a negative effect on their businesses.
And if you own property long enough, you realize that those that you hire to manage property frequently change, and when the time comes to hand over responsibilities to a new person, information is lost or mishandled. Therefore, business owners ought to consider using a management solution through software that would facilitate and maintain a continuous data flow despite a change of property managers or firms. Now you won’t have to sweat because this way nothing gets lost and nothing gets mishandled.
Limitation of Accountants and Property Managers
If you hire accountants and property managers, they will most likely be able to understand and help you implement the necessary operations, documents, laws, and regulations needed to run your real estate business. But they won’t be able to help you fully see the overall performance of how well your real estate project is doing which should come from an owner’s perspective. This becomes the real challenge.
All the critical information provided by your accountant and property managers can go to waste if you aren’t able to prepare a robust and complex financial model periodically to track your asset’s performances. This entails that most likely you may need to hire more people to help you integrate this data from your accounts to a financial model which can prove costly. You could do this on your own but that might be time-consuming.
So, the right software will not only be able to centralize your data but more importantly be able to take the data and directly integrate and accurately analyze it to project your current and future financial performances of all your properties.
Managing Cash Flow Accurately for Periodic Reporting Requirements
Often is the case that assets in real estate are owned by large numbers of individual investors, developers, or various investment funds. Which makes this business capital-intensive. And because there may be several kinds of stakeholders involved, each one may request and require reporting of their investment periodically. Not only is this capital intensive, but it also creates more manual work for yourself, managers, lenders, and accountants that are time-sensitive.
Not only is it time-bound but the reports need to be accurate and be able to satisfy the inquiries of all stakeholders.
Failing to do so may cause problems in the relations between them and ultimately hurting the growth of your real estate business.
Understanding this, business owners will need to see how very critical it is to utilize and leverage software technology that has automates your data in a centralized platform to reduce the time needed to produce proper cash flow for accurate reporting.
The Right Kind of Technology and Software
Real estate asset management is more important than ever. With the right technology that we have today, we can improve the entire process to be more cost-effective and efficient. If you have been a real estate owner long enough, you will discover that these 4 pain points are an issue that needs a proper solution. A solution that can organize and aggregate your data from different sources accurately and quickly. Then be able to centralize the data so that it can be migrated into a dashboard to provide you an overall look at the financial performance of your real estate business. And most importantly having all of this automated. This frees up more time for you to do other things, helps you make better business decisions, improves your relations with your customers, and maximizes your shareholder’s return.