Small business real estate developers need to make many complicated decisions. Here's a look at just a few of their responsibilities:
To execute these responsibilities efficiently, real estate developers need to be able to record and analyze large sets of information, such as project cost estimations, profit and loss reports, invoices, subcontractors bids, change orders and a ton of legal documents.
What becomes an administrative nightmare is when SMBs manage these responsibilities using cumbersome manual methods, such as Excel sheets. Moreover, costly human errors creep in, which limit businesses from making timely and accurate decisions.
The way to tackle this is by using real estate development software that helps small developers manage their work more efficiently.
That said, the right real estate development software for your business depends on factors such as what type of features you need, whether you own a full construction company or are looking to subcontract most of the work, and, finally, your software budget.
In this Buyer's Guide, we will closely examine the key factors that businesses should keep in mind while evaluating real estate development software.
Here's what we'll cover:
What Is Real Estate Development Software?
Common Features of Real Estate Development Software
What Type of Buyer are You?
Key Considerations
Real estate development software helps businesses analyze and track development projects. The software comes with process automation functionalities that simplify financial analysis, subcontractor management and project management.
An example of automation is the automatic analysis of project feasibility involving calculations of property lot types, estimated expenses and loans, as well as the tracking of financial reports such as profit and loss statements, budget reports and cash flow.
Construction project budget estimation in Budgetrac
Using the process automation features of these solutions, real estate developers can make better land purchase and construction decisions.
Besides managing financial data to make faster and more accurate business decisions, real estate development solutions help developers manage different aspects of real estate construction, such as subcontractor compliance. The tool can be used to automatically identify and block subcontractors whose certifications have expired.
Likewise, these solutions offer many features that help developers manage various stages of the development process.
Here are some of the common features:
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Finance management |
Conduct automated profit and loss calculations, create project budget, monitor accounts payable/receivable and track invoices/billing. |
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Project management |
Monitor each facet of the job to ensure all tasks are moving along in accordance with the schedule. Determine process efficiencies to shave off tasks/time. |
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Document management |
Build a centralized file repository, that provides version control and allows teams to share and retrieve relevant project documentation such as change orders, contracts, RFIs etc. |
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Bid management |
Receive job prospects, upload plans to an online plan room, solicit and procure bids from subcontractors and put the best bids together in a quote for the job. |
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Reporting |
Understand financial status and project profitability with cost breakdown reports such as charts and graphs. |
The right real estate development software depends on various factors, but most importantly on which industry you belong to and your business size.
Listed below are three buyer types of real estate development software and their typical concerns:
Small business buyers: By small business buyers, we mean those that are currently using manual methods to manage and track real estate development projects. At best, these buyers would be using Quickbooks or other basic accounting solutions to build project costs estimates, track payments and invoices.
These buyers are typically evaluating real estate development solutions for the first time. Hence, they would be primarily concerned with software costs, rather than checking out specific features.
Enterprises buyers: Theses buyers are large real estate construction companies that are looking to replace existing systems with solutions that can meet their needs for large scale project management and financial analysis.
These buyers typically work on multiple projects spread across different locations and time zones. As a result, they need a system than can consolidate different aspects of managing real estate development projects such as financial accounting, bid management, compliance management and even sales/marketing management.
Best-of-breed buyers: Owing to the variety of real estate development projects, there are specialized solutions catering to the needs of businesses working in a niche space. For instance, if you're a real estate builder specializing in home construction, then what you need is home builder construction software.
Likewise, if you're a developer who also needs to manage the property post-construction, then you need property software for maintenance management, tracking tenant details, lease dates and collecting rents.
Businesses buying real estate development software need to understand more than just features to make the right choice.
For instance, small businesses typically do not have experienced technicians to manage bug fixes and install upgrades to the software. In such cases, a cloud-based tool where the vendor takes care of software maintenance is more preferable than an on-premise solution, in which the company has to manage data storage and software maintenance.
We have grouped the key considerations when buying real estate development software into two categories:
Software budget. The pricing of software is a primary concern for small business real estate developers. As a result, cloud-based tools with a subscription-based pricing is easier on the wallet than on-premise solutions, which come with an upfront license fee.
However, tracking just the license fee for using the software is not enough. Businesses should also account for additional software costs, which include fees for phone support and third-party software integration costs.
Size of projects. Businesses working on multiple and large scale projects need advanced functionalities, especially when it comes to project accounting. This makes integration with third party core accounting solutions a key requirement.
Likewise, large businesses also need to integrate with their existing enterprise solutions, which typically consist of CRM solutions and ERP software. Last but not the least, mobile access is also important to manage and track the work of field service agents.
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