Warehouse and industrial buildings are discussed together as two types of real estate investments because they typically are found in industrial zone locations or industrial parks. Other than that, however, they are not that similar.

In this article, we want to touch on the aspects of warehouse and industrial buildings from a real estate investing point of view.

Warehouses

Rental warehouses are usually divided into bays or rooms ranging in size from less than 100 square feet to over several thousand. The small storage bays used generally for personal belongings and the larger bays for such things as small workshops, manufacturing facilities or wholesale sales outlets. As a real estate investment, it should be noted that tenant stability in the small spaces is probably the worst of all real estate investments because they usually rent on a month-to-month basis and move out at any time. Having said that, however, if you’re in an area where this type of facility is in high demand it may be a very good real estate investing opportunity. So don’t pass on an opportunity to evaluate the numbers (at least).

Industrial Buildings

A building leased to a major industrial or manufacturing company makes an excellent investment because they are large spaces generally leased on longer terms to more stable tenants such as manufacturing plants who need additional warehouse or manufacturing space. Moreover, the tenant usually pays for everything, including maintenance, taxes, insurance and utilities.

If you’re a real estate investor, you might want to consider these types of real estate investment. With any real estate investing, however, remember that one size does not fit all. Whereas a warehouse may be a profitable real estate investment in one area, it might not be that profitable in another area. As always, any real estate investing opportunity relies on the numbers. Be sure to evaluate all the numbers before you buy any investment real estate.

Real estate investment software is one of the best tools real estate investors and professionals can use to analyze and evaluate rental income property.

Good real estate investment software provides the forms, makes the computations, and creates the reports. With a good real estate software solution any user (novice or advanced) can create professional-quality rental income property reports for personal decision-making or as presentations to buyers, sellers, colleagues, partners, or to lenders within minutes.

Moreover, real estate investing is all about the numbers. Hence, successful real estate investors concentrate on (nay, make the investment decision based upon) the bottom line when considering real estate investment opportunities. Real estate investment software therefore becomes an essential tool for people who seriously work with investment real estate because it provides quick and concise cash flow and rate of return numbers.

There are, of course, options other than investing in third-party real estate investment software.

You can, for instance, simply scratch out the numbers with a pad and pencil, perhaps make a hasty rule-of-thumb calculation off the top of your head, or maybe listen to someone’s advice. But it should be obvious that these approaches, although useful in limited cases, are fraught with weaknesses. They clearly do not provide a deep enough property analysis required for such an important investment decision, nor do they represent the data adequately enough to sway the opinion of any other person, entity, or institution.

You can also use a spreadsheet program like Excel and develop your own real estate investment software solution. The problem here is time. It takes loads and loads of time to embed the computations properly and to format the forms and reports. Given the affordability of some software solutions, successful real estate professionals do not waste time or effort reinventing the wheel and rely on real estate software, preferring rather to spend their time generating moneymaking deals.

But I digress. So let’s get back on topic and look at 10 things that constitute good real estate investment software.

1. Easy to learn and use – You want simply to enter the values and have the software do the rest. You never want to look and wonder, “What do I do next?”

2. Unlimited units – You want the ability to analyze one unit or a thousand units, or even more units if necessary.

3. Loan amortization – You want lots of control over the financing assumptions for the property. Therefore you want the ability to enter multiple loans (e.g., a first, second, and third loan), the flexibility to enter the loan either as a loan assumption or as a new loan, and either at a fixed-rate or interest-only rate.

4. Crucial rates of return – You want the real estate investment software to calculate returns for cash flow such as cap rate, gross rent multiplier, cash on cash, operating expense ratio; and loan analysis ratios like debt coverage, loan-to-value, break-even, profitability index.

5. Concise, top-quality reports – You want a wide-range of printable reports to include comprehensive data with eye-catching appeal. Remember, you might be trying to influence the opinion of a buyer, seller, colleague, or lender regarding this property. At the very least you want an APOD, proforma income statement, rent roll, acquisition report, and sales proceeds report. If you’re pragmatic, you can also find software with sensitivity and scenario reports, a comparable sales report, a marketing package (executive summary), amortization tables, and charts.

6. Upgradeable versions – In the event that you purchase their less-than-platinum-grade-version without “time value of money” and “tax shelter” consideration, you want the ability to upgrade to it later if you choose. This is very important because you will discover over time that computations for both time value of money and taxes are extremely important to serious real estate investors.

7. Technical support – You want to have easy access to tech support in the event of a problem, e.g., your computer crashes and you need to re-download the real estate investment software. Email and telephone support (preferably with the developer) is recommended. Exercise caution if the company or developer appears overly allusive or lacking in experience.

8. Affordability – The good news is that there is very good real estate investment software available on the web for under $300. Be sure to examine the website carefully, however. Remember that the same company praising their software publishes the website. Unless it’s well organized and informative, or if its lack-luster and confusing, the software might not be worth the price regardless how affordable.

9. Customer satisfaction – Customers freely willing to write and submit a testimonial about the software should not be taken for granted or lightly regarded. Look for names, professions, and titles. If you can relate, then you’re on the right track.

10. Lots of special features – You should expect good real estate investment software to provide at least these benefits: Seamless printing, picture function, branding and name-rider integration, email capability, help file, and Vista compatibility. In some cases, there could be even more features that are special, so spend time on each website looking around to be sure you don’t miss something.