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What is Property Investment Management?

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What is Property Investment Management

Property investment isn’t only about buying and selling properties. To turn a profit, you’ll rent out your properties to give you a steady rental income.

Your properties should appreciate in value until you sell them. Renting out even one property can be difficult and time-consuming.

So, growing your property portfolio will mean more work for you.

Landlord Vision are experts in all things property management. Here, they give insight into the different methods of managing investment properties. Read on to find a property management system that helps you meet your investment goals.

What is Property Investment Management?

Property investment management is the process of managing money that has been invested in property, usually in order to earn high profits and capital growth. As a property investor, this means monitoring the performance of your assets and making decisions based on performance data to increase the profitability of your portfolio.

Unless you are monitoring the financial details of your portfolio it’s difficult to see any opportunities for growth or efficiency. An effective property management system will give you all the data you need to make smart decisions about your portfolio.

Property management systems vary in their efficacy, but there are three main avenues you can take to help you manage your property investment.

Using Spreadsheets for Property Investment Management

A surprising number of property investors use spreadsheets to manage their portfolios. It’s an easy and low-cost way to get started, especially when you have a small number of properties. If you’re familiar with spreadsheets, can write formulas and understand how to link spreadsheets together then this could be a good option for you.

Setting up your own spreadsheet system is the most customisable of the property management methods. For instance, you can create an in-depth spreadsheet covering every element of your portfolio if you’re self-managing. If you’re using the services of a letting agent or property manager you can create a more high-level spreadsheet.

Who should use spreadsheets for property investment management?

Spreadsheets will work well for you if you’ve already got some understanding of what you can do with them. The fewer properties you have, the easier it is to manage with this type of system. If you prefer a low-cost low-tech solution that you can store on your PC, then spreadsheets are a good option.

Who would struggle to use spreadsheets for property investment management?

If you have a lot of properties there will be a lot to monitor and remember, especially if you are self-managing. A spreadsheet system will become more complicated and will take longer to maintain the more your portfolio grows. Spreadsheets are not a scaleable option if growth is your north star.

It can take a lot of time to design your own management system using spreadsheets. If you are not proficient in the use of spreadsheets, you’ll need to invest time in learning how to put them together, otherwise you’ll find them frustrating and time consuming.

Property Management Software for Property Investment Management

There are many property management software programs on the market.

They make the process of managing your entire portfolio easy and efficient. Some property management software programs are built to manage your entire portfolio in one platform, others will just deal with a few elements of property management such as rent collection or tenant screening.

Finding the right software to meet your needs may involve some up-front research because the features and costs vary from provider to provider.

While software is more costly than a spreadsheet system the amount of time it saves you when it comes to property administration is usually worth the tax-deductible cost.

Using property management software eliminates a lot of the admin associated with spreadsheets.

Most software neatly aggregates the data you enter, making it easy to spot efficiencies and opportunities to fine-tune your investment strategy.

Who should use property management software for investment management?

If you have more than 2 properties, you’ll benefit from using property management software. If you work full or part-time as well as managing your properties or if you struggle to keep up with your property related obligations, software will be perfect for you.

Who would struggle with property management software?

There aren’t many who would struggle to use property management software. With so many different types of software on the market, there is something for everyone. Software that has a lot of features might be more difficult to get to grips with if you only have a few properties. On the other hand, a very simple property management software may not be flexible enough to suit your needs if you have a lot of properties. When looking for software it’s best to consider a few different options until you find the one that best matches your requirements.

Letting Agents and Property Managers for Investment Property Management

If managing every aspect of your properties is too much of a commitment, but you still want to grow your investment, letting agents or property managers will help you do this. Letting agents offer a fully managed service which does what it says on the tin. They also offer a partially managed service where they help you find a tenant, then the general management is handed back over to you.  They can also check for wear, tear and other building / pest inspections.

Letting agents and property managers vary in the services they provide. In most cases, a letting agent or property manager will do a good job for you and can relieve a lot of the stress that comes with property management. However, some are less than reputable, so it pays to do your research. Letting agents and property managers tend to charge a percentage of the monthly rent, so they will be more expensive than spreadsheets or software.

Who should use letting agents or property managers?

If you have a lot of properties and you are pushed for time this is likely to be a good service for you. If your rental yields are low, it might be better to self-manage using software in order to save some money.

Who would struggle to use letting agents or property managers?

Letting agents and property managers are great at running the day to day of your properties. The biggest complaint many investors have with agents and managers is that they aren’t as invested in growing your portfolio as you are. If you are hands off it’s difficult to see opportunities for growth or efficiency, and unless you find the right property manager or letting agent, they won’t be looking out for those opportunities on your behalf. Some investors manage with a combination of software and letting agents. This way the letting agent manages the properties and tenants while you monitor the bottom line.

How to Choose the Investment Management Option That’s Best For You

The most appropriate method of property investment management for you depends on:

  • The goals of your investment plan
  • How much time you want to put into the management of your portfolio
  • How much money you want to spend on a system relative to your rental yield

If you’re just starting out, you may want to manage with spreadsheets for a while. If you’re looking to grow a portfolio, invest in software or use software in conjunction with a letting agent or property manager. If you’re very busy, you have good yields and your portfolio is already lean and efficient you could hand over the full management of your properties to a trusted letting agent or property manager.

Whatever your goals, there’s a method of property investment management out there for you. Make sure you do your research. Factor in the costs and time commitment of each method and then try a few. It may seem like a lot of work, but it can save you hours of time in the long run.

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