Simon Pither of Pither Technologies considers the role software increasingly plays in property investment

Software is part of our daily lives today, but there is sometimes something of a resistance towards using it in property.

Who knows why? Possibly because there is still something of an emotional pull to or from a property purchase, even one that is an investment. Often we think that if a property ‘looks good’ – if it has ‘kerb appeal’ and the area seems ‘nice’ (or vice versa) it probably is a good investment.

Unfortunately, in property, appearances can be very deceptive!

Ultimately property investing is not about emotions at all but all about hard numbers and data. Software is all about hard numbers and data. So property and software are actually the perfect partners! The role of property software is to ensure that a property that looks good as an investment actually is a good investment.

• Today there is an ever increasing and somewhat bewildering ocean of data available to the property investor. Software can save time when sorting through that data and help you home in on the best opportunities.

• Software saves time and effort and an awful lot of number crunching! If you normally use a calculator to calculate yield, let alone ROI or profit, you’ll understand the simple benefits here.

• More importantly though software means that more data – and higher quality data – can be easily used and assimilated in your investment decisions. Not just basic numbers like purchase price and likely rent as in the past but price history, mortgage affordability, tax impacts, market information and local area data for example.

• Ultimately software means that you can make more and more accurate and rewarding investment decisions.

(Software can save a lot of wasted effort too. If a property looks good on paper but, to coin a phrase, computer says no it could even save you from an expensive mistake.)

Software, in fact, is well matched as a property investment partner and at all stages of the investment journey too. That is from first looking for a new investment property right through to managing the property or an entire portfolio.

Here are a couple of simple examples:

Let’s say you are searching for new investment properties. Today, you’ll most likely start your search using a property portal like Rightmove or Zoopla, not by using paper particulars as in the past. The portal has already digitised basic information about the property. So why would you analyse that information manually? It makes perfect sense to use software to import and analyse that information to guide your investment decisions.

PaTMa’s free Property Tools Browser Extension is a very good example of software that can do this. As you search for property for sale it will show you ROI and yield instantly, plus local comparisons. It means you can rule out unsuitable properties and rule in the best ones at an early stage.

Once you’ve found the best ones software can again make the process of analysing, comparing and choosing investments easier. PaTMa’s Property Prospector can produce detailed financials for any possible buy including yield, ROI, profit, mortgage affordability, tax impacts and more.

Now let’s look at the role of software when you have actually purchased an investment property. Again, at the end of a day owning a buy to let is all about numbers and whether the numbers stack up or not. Software can be used to collect, process and understand those numbers in a simple and effective way. A way that would have been unthinkable in the days of rent books and paper based accounts.

Software can be used to manage and track your rent payments, and monitor and control your expenses. It can show you profit and loss and provide detailed analysis of a portfolio. It can also be used to calculate the figures you need for your tax return. These are things that are very laborious using manual calculations but which software does instantly.

PaTMa’s Property Manager for example can show you total rent, expenses and profit for every property in a variety of formats including by month, by tax year, by calendar year and over the lifetime of a property so that you always know exactly where a property stands financially. Again, few would relish doing that with a calculator so software makes what wasn’t previously practical easily possible.

While it is true to say that you can use standard accounting packages to provide financial information these are generally ‘one size fits all’ products. They are often designed with, say, a retail shop or a small manufacturing business in mind. They rarely understand nor fully take into account the specific needs that the property investor, landlord or manager has.

In the past, perhaps, it was possible to successfully invest in and manage property without the aid of software. Property-related data was hard to come by in the first place. Property investment was in some ways a simple equation – rent minus expenses = profit worked more often than it failed.

Today, however, with so much data available and so many variables at play even in a single, simple buy to let – everything from pricing and rent trends to taxation and even minute details like how travel times affect the market – it is difficult to see how this can be the case. The question to consider should perhaps be whether there can be any future for property investment without software?

The future of using software to make you a better property investor or landlord is not just to use any software of course. But to use software which has been specifically developed, designed and which continues to evolve with the professional investor, landlord or manager in mind.

Guest post by Simon Pither of Pither Technologies. Pither Technologies are the developers of PaTMa Property Prospector, PaTMa Property Manager and a range of free-to-use software tools for property investors.