Taxes, regulations and maintenance, oh my. Capital is not the only gatekeeper to the world of commercial real estate investing; prospective CRE investors must plan for the operational and administrative duties of CRE investing or they must pay someone to take on this workload. Perhaps it’s some combination, but in any scenario, prospecting and managing a commercial real estate investment portfolio has many more considerations than just market speculation (for that, you’d be better off looking into CRE ETFs). The duties and responsibilities for a commercial real estate investor can become a job, or jobs, of its own and it’s important that these professionals leverage the right tools to scale their time appropriately.
Fortunately, there are many modern technological solutions specifically designed for the abundance of considerations in commercial real estate stretching from taxes to ESG. These tools stay up to date on the tedium of compliance and can even help give you an edge when it comes to prospecting properties for portfolio growth – or those opportunities to trim the fat of an under-performing portfolio. Like a contractor without a toolbelt, a commercial real estate investor without a technology toolkit will be far less productive and maybe even a liability to the end goal of growing capital. These are our favorite picks for commercial real estate investor technology categories the pioneering CRE pro should consider.
1. Social Media / Networking
For the fun price of free, we recommend social media platforms as the first technology to place in your toolkit. While Facebook and the like are clearly not a niche commercial real estate investment solution, there are communities carved out on top social media networks that provide great communities for the democracy of information. The abundance of free information aside, the ability to network with like-minded individuals all looking to achieve common goals can go a long way to shaping your portfolio. Facebook, Twitter/X and my favorite, LinkedIn are great platforms to be visible on and build your network while gaining and sharing free information.
2. Customer Relationship Management (CRM) Systems
You know those marketing emails that pepper you with promotions or the SMS opt-in from just about any business that has you money? Well, these are all customer relationship systems and while my explanation of these here may have brought you frustration, there is a reason they’re so widely used and a reason you should use them as a CRE investor. Building and maintaining strong relationships with clients, tenants, and partners is essential in commercial real estate. CRM systems like Salesforce and HubSpot or niche ones like InvestNext.com offer robust features for managing contacts, tracking interactions, and automating communication. These tools can help investors stay organized, follow up on leads, and nurture relationships, ultimately leading to more successful deals and satisfied tenants. Seasoned CRE pros know that stopping portfolio attrition is easier than growing your portfolio. Don’t bleed clients over a lack of visibility or communication.
3. Financial Analysis Software
While one characteristic of commercial real estate investing is speculation, distilling the market down to math as best we can and putting on our accounting hat can help improve the odds. Evaluating the financial viability of potential investments is a critical step in the investment process. Financial analysis software such as Argus Enterprise and Procalc enables investors to model cash flows, assess risk, and determine the potential return on investment (ROI). While speculation may still be the accurate descriptor, making formulaic decisions based on the output of strategic tools provides firm evidence for your commercial real estate investment decisions. As you wouldn’t buy single stocks without knowing P/E, you shouldn’t buy commercial real estate without detailed scenario analysis that helps investors understand how different variables, such as interest rates and occupancy rates, affect their investments. We must not forget taxes; financial analysis software should help measure the effect of taxes on your specific investment intention including local property taxes, capital gains and more.
4. Property Management Software
Segueing to the niche offerings, property management software is crucial for handling the day-to-day operations of real estate investments. These platforms help manage leases, track rent payments, and handle maintenance requests efficiently. All responsibilities that can bog prospective commercial real estate investors down in the tedium vs. pulling levers that can expand upon their portfolio and grow capital. Popular options like AppFolio, Buildium, Quarem and Yardi offer comprehensive solutions that streamline property management tasks. These tools often include features for tenant screening, online rent collection, and maintenance tracking, which can save time and reduce administrative burdens. Something as simple as key date reminders these tools offer can help you not pollute your traditional calendar or to-do list. Tax considerations and compliance summarized briefly as FASB is reason enough to adopt these specialty tools into your toolkit. Again, streamlining commercial real estate investing with a focus on growth.
5. Virtual Tour and Visualization Tools
Unless your plan is to meet with each prospective tenant, you better plan on leveraging technology for showings etc. and add virtualization tools to your CRE toolkit. Virtual tours and visualization tools have become increasingly important with not only helping to reduce a property manager’s time for site tours, but also as an expectation of most prospective clients who have become used to these features. Platforms like Matterport and VTS enable investors to create immersive 3D tours of properties, allowing potential tenants or buyers to explore spaces remotely. 3D cameras and even 3D headsets are continuing to grow in adoption, so even though this technology is not new, tying our real world to the digital world should be top of your list as a CRE professional.
The commercial real estate landscape is evolving at a blistering pace and despite doom and gloom sentiment from some authorities, is not going anywhere any time soon. It’s on you as a CRE professional to stay ahead of this evolution with the right commercial real estate investor toolkit. By incorporating these tools into your toolkit, you can enhance your efficiency, accuracy, and decision-making capabilities. From property management and market analysis to financial modeling with tax considerations and sustainability reporting, technology provides the foundation for successful commercial real estate investments. Don’t enter a competitive field with more capital than brains. Aim to punch ahead of your competition by adopting the right mix of commercial real estate technology.