For those who know how to use it, Excel is a cost-effective, portable alternative to expensive industry programs. Instead of looking for specialized solutions, here’s why this simple tool can get the job done.

At a time when every industry seems to have access to specialized software, the idea of using a program as general as Excel to manage real estate investments may seem strange.

It’s true that having the right tools for the job is important. Still, professionals shouldn’t be too quick to drop Excel from the running. With a comprehensive understanding of the program, Excel can actually be a valuable component of any real estate investor’s toolbox.

If you’re a real estate investor looking for a budget-friendly, multipurpose tool, then Excel might just be exactly what you need to tackle your to-do list and reclaim your time.

Budgeting and cashflow

Of the many different ways real estate professionals can use Excel, the most straightforward is as a way of budgeting and monitoring cashflow. In fact, there’s even a number of Excel templates available that are preformatted for such tasks.

Just download one, enter your numbers, and the formulas will do the rest. You can even export files between Excel and QuickBooks for more advanced budgeting operations.

Lead with logic

Most people think of Excel as being very straightforward in terms of what it can do. Sure, it will organize categories, alphabetize things or execute certain mathematical formulas, but the program can actually handle much more uncertainty than most realize.

For example, if you’re interested in using Excel to model different outcomes, you can use IF statements — a kind of simple logic — to test management decisions. You can even nest IF statements in an extended sequence, allowing you to evaluate more nuanced situations.

It can be hard to learn this sort of Excel modeling on your own (even with guides), but logic statements can be extremely valuable to those in the real estate industry. With that in mind, real estate investors interested in using Excel for modeling might want to consider taking an Excel skills class designed for professionals looking to develop such competencies.

Workflow development

Excel is a favored tool of the highly organized, helping them set a clear framework for how processes take place. This is great if you own multifamily housing or have invested in a significant number of individual properties and oversee a maintenance team.

Workflows are also helpful for smaller-scale investors who want to ensure processes are carried out correctly, such as certain seasonal maintenance activities or software management tasks. Excel can’t automate your workflow, but it can organize various pieces of information about a task, like the date it should be performed, who should perform it or other relevant contact information.

Real estate management includes a complex set of tasks, including budgeting, modeling and maintenance, as well as handling sales funnels to attract new tenants, organizing contact information and much more.

Though Excel may not be the most targeted for these tasks, as a multitasker, it certainly has its own advantages. For those who know how to use it, Excel is a cost-effective, portable alternative to expensive industry programs. We may be conditioned to look for specialized solutions, but sometimes the simplest option gets the job done just as well.

Larry Alton is the CEO of Alton Enterprises in Olympia, Washington. Follow him on Twitter, or connect with him on LinkedIn.

Source Google News