There’s no question as to whether landlords will benefit from property management software to streamline their day-to-day operations. But as their investment portfolio grows, can landlords also benefit from real estate valuation software?
Purchasing investment property to rent out is different from buying a home as a primary residence. While the main aim for buying your own home is for permanent settlement, your end goal for an investment property is to turn it into a profit-generating venture. As such, you’ll need to treat it as a business by selecting properties that will give you the best ROIs.
What is real estate valuation?
Buying a rental property comes with huge financial implications, so you’ll want to find one in a location that fits your budget, is easy to rent, and will generate cash flow. Real estate valuation software helps largely in determining which specific properties will grant you suitable investment returns.
The primary purpose of real estate valuation for landlords is to determine the viability of a potential investment property. It employs a combination of methods such as cost, sales comparison, and income approaches to come up with a value that allows one to compare investment opportunities.
Investing in rental property provides a trio of benefits that include recurring rental income, tax breaks, and appreciation in property value over the long term. For this reason, every discriminating investor should analyze not just the rewards but also the potential risks involved when investing in specific types of properties.
Traditionally, real estate agents would perform property appraisals manually. But with the advent of technology, all this information is made available with just a few inputs into real estate valuation software.
Can landlords benefit from real estate valuation software?
There’s a lot of debate on whether or not real estate valuation software actually makes sense for landlords and rental property investors. Data analysts will argue all day that if they can get good data, they can give you a good valuation. Veterans of the industry will tell you there’s more to it though. How can you put a value on curb appeal, a great back yard or a railroad track 50 yards away?
Something else to consider is that there are multiple ways to determine the value of real estate. Just as analysts have several methods to determine the true worth of a company, property valuation software each has its own way of doing things. This leads to discrepancies from software to software. Obviously, this can be a good thing if you simply consider it as a range of what the true value may be, but any real estate agent will tell you that you can’t count on a concrete number.
If you do decide to invest in real estate valuation software, here are a few options to consider. Keep in mind that while you’ll come across dozens of more advanced software packages while doing an online search, we’ve filtered our selection to what works best for landlords looking to expand their rental property portfolio.
Real Estate Valuation Software #1: A LA MODE, INC.
One of the oldest players in the game, A LA MODE, INC. offers several different packages for customers. They tailor their packages towards different industries, as appraisers generally have different needs than agents or brokers.
They’re unique in that they have zero debt, so they can focus on adding value to their 100,000+ customers rather than having to worry about keeping shareholders happy. Best of all, A LA MODE has recently partnered with CoreLogic, an industry leader known for providing innovative solutions for the toughest challenges in the housing market.
A LA MODE also offers extensive training, so if you aren’t the most tech-savvy person in the world, they will take care of you!
Real Estate Valuation Software #2: HOMEPUTER
HomePuter has also been around for a long time—and their online presence definitely shows it. Their website is extremely outdated, which may lead you to think their software is outdated as well.
Even though it’s difficult to find recent reviews, it does appear that the software still works okay. Many people also vouch for the quality of customer service they received from HomePuter, which is always a plus.
It’s also very inexpensive and user-friendly, so if you are looking for a budget option to do the job, HomePuter may be worth a shot.
Real Estate Valuation Software #3: ACI Analytics
If you’re looking for a real estate valuation program with an easy-to-use interface, ACI Analytics should be the best pick for you. It has the capacity to perform research-driven analytics in the form of a suite, so it’s easy to exchange and merge data across programs with related functionality.
However, what makes ACI Analytics stand out from the rest is its built-in listing database. With this added feature, you are able to conduct comparable property cost analysis on listings of your choice. The software also enables you to perform location-based research, inspect each property in detail, and generate reports.
ACI Analytics also provides strategic information from resultant reports. You can review systematic computations or use software tools to manage data generated from the reports. Because the software can be integrated with other digital tools to consolidate data, ACI Analytics is a popular choice among realtors and appraisers due to its extended capabilities.
Real Estate Valuation Software #4: CLICKFORMS
ClickForms is actually just one of the products offered by Bradford Technologies. However, their claim to fame for their flagship appraisal software is its ease of use, as they call it a “point and click” software. Again, this may be another good option if you aren’t the most tech-savvy person around.
The software has a lot of different modules, so you can make your analysis as basic or advanced as you want. The only downside is that you pay for what you get: to get some of the most advanced software, you’ll have to pay one of the higher subscription prices out there (the least expensive option is $54 per month.)
The company offers a 15-day FREE trial, so I suggest you take advantage of this to see if it’s the right fit.
Real Estate Valuation Software #5: PROPERTY METRICS
Property Metrics is an online-based platform you can use from anywhere—including your tablet! Even though you may prefer a computer for building your estimates, more professionals make the switch to tablets everyday for the additional convenience they offer. If you’re already using a tablet or at least thinking of making the switch, this may be the software for you.
Property Metrics like to push the fact that they don’t help you build bulky spreadsheets. Instead, they generate clean, easy-to-read reports for you to work with. Their pricing model is subscription-based, so again it won’t be the least expensive option, but has several conveniences that its competitors don’t offer.
Looking for something else?
If none of these suit your fancy, there are other types of real estate valuation software out there as well. It’s difficult to completely cover all of them without turning this into a 3,000-word article! Just keep in mind that as you start your search, you should have an idea of what’s most important to you—flexibility, function, cost, a proven track record, and reliable results.