Real estate analysis involves calculating, keeping track and managing the finances of your real estate properties. This process can take hours of your time. The time frame depends on the method you are going to choose.
There is a fast and simple way and a complicated hard way to do it. Owning real estate investment software is the fastest, easiest and simplest way to make it happen. On the other hand, you can invest the time and do it yourself.
If you don’t know anything about real estate analysis then it’s best to try out first a few examples on your own in order to understand how everything works. After you become more comfortable, the right choice is to use real estate investment software. It is important thing to realize, that using real estate investment software does not have to be expensive. In fact, there are tools which are completely free!
Here are the DIY, do it yourself, steps:
#1: Get your hands on spreadsheet software.
You can either buy one; the best seller is Microsoft Excel, or use a free online alternative like Google Docs spreadsheets or Zoho Sheets.
#2: Learn the basics of the software you chose.
It’s best if you already know how to use this type of software because it’s not especially made for real estate. This is why you need to understand at least the basics. Knowing the basics means that you understand at least how to change the types of the cells (choose between text, number or percentage), change background color, borders, cell size and the font’s style.
#3: Optional: Use macros or write scripts in visual basic for applications.
This will automate a number of important operations. You can get away without them but in the long run is important if you know macros and a basic scripting language like visual basic for applications.
Writing a script is like coding a very simple piece of software. It helps if you have programming knowledge.
#4: Use Excel formulas.
This is a simpler alternative to using macros or to writing scripts.
#5: Use real estate specific formulas.
You need to compute cash flow numbers, rates on return etc. in your spreadsheet software. You need to understand all of these operations before proceeding.
Here are the steps of using the real estate investment software:
#1: Input or import the basic characteristics of your properties.
#2: Push a single button any time you need an answer. That’s all!
Real estate analysis takes a lot of time to do it on your own. You will be better off in the long run by using some real estate investment software. In fact it can be even cheaper, than purchasing spreadsheet software, since there is a free real estate investment software to use.