Investing in commercial real estate (CRE) isn’t like investing in the stock market, where fluctuations can have investors selling off stocks they purchased weeks before. CRE is a long-term investment that requires careful analysis to know when to invest and when to sell. It requires attention to detail.
Sometimes, that attention to detail is difficult to achieve. Investors may receive data in multiple formats from different management packages. They may have difficulty getting a comprehensive view of their investments or the transparency they need to make informed decisions. With the right investment management software, investors can improve decision-making through:
- Consolidated Investment Tracking
- Better Asset Performance Monitoring
- AI-enabled Data Analytics
- Comprehensive Document Management
- Automated Distribution and Tax Generation
- Enhanced Security
EXtrance empowers investors to make data-driven decisions faster with less risk using technology that ingests data to produce clearly communicated results.
Consolidated Investment Tracking
For many investors, information on investment performance is spread over multiple platforms, forcing them to consolidate the data manually for a comprehensive view. Management software can track investments using key performance indicators (KPIs) and display the data on a consolidated dashboard. With a comprehensive view, investors can make informed decisions regarding their investment strategies. They can spend less time entering data and more time analyzing it.
Better Asset Performance Monitoring
Investors can configure the software to monitor multiple KPIs, such as:
- Cash Yield
- Estimated Return on Investment
- Internal Rate of Return (IRR)
- Accounting Rate of Return (ARR)
- Tenant Turnover & Occupancy Rate
- Operating Expenses
- Loan to Value (LTV) Ratio
Depending on the solution, investors may customize the KPIs to reflect the information they are most interested in. For example, average rent per property, mortgage rates, and equity ratio may be of more interest.
Instead of spending hours calculating KPI values and then benchmarking them, investors can let the technology platform do the work for them. They can see the performance of each investment individually and as a group. Consolidating the data makes it easier to assess how any investment is performing.
Improved Data Analytics
Advanced technologies such as artificial intelligence (AI) can improve data analytics. A management platform can ingest volumes of data from an individual portfolio and industry reports, standards, and trends. The software can look for patterns that humans can’t see simply because they cannot process that amount of data quickly enough to have meaning in a rapidly changing investment market.
With AI, the technology may identify unique relationships among data points that add value to the decision-making process. It may find additional KPIs to help evaluate investment performance. This added capability can help investors make better investment decisions.
Comprehensive Document Management
Like any segment of the financial services industry, investment management is highly regulated. Investors can become inundated with documents and struggle to ensure the relevant documents are available come tax time. Management software organizes the information in a central location, so investors know where the documents are stored.
Whether it’s Schedule K-1s or annual reports, the right solution ensures that the information is accurate and available. Investors don’t have to cross-check numbers or dig for backup documentation. All necessary documents are stored securely on the blockchain, and maintained in an easy-to-access location.
Automated Distribution and Tax Generation
Investment management software incorporates accounting capabilities to assist with distribution and tax generation. The software can facilitate and track distributions. The information can then be used to generate tax documents. With an integrated system, the potential for errors is virtually eliminated. The solution can also assist with contract enforcement to ensure that all legal requirements are met.
While these details are crucial for a well-managed investment, collecting and evaluating the data can consume hours of an investor’s time. A management platform can remove the burden of data collection and facilitate the generation of financial documentation.
Regulatory requirements for the secure storage and transmission of financial data continue to grow. As more companies fall victim to cyberattacks, investors need a secure environment to protect their valuable digital assets. Blockchain technology provides that security.
Blockchain is often associated with cryptocurrency, but the technology operates as an unchangeable record of transactions involving tangible and intangible assets of any kind. A blockchain network distributes information across the network. The distributed record known as a ledger provides a single source of truth as each entry is only recorded once. If an error occurs, the information must be corrected through another entry.
For investors, this functionality means that all parties look at the same information, allowing for complete transparency. Because all data is distributed across the blockchain network, there is no database or collection of files that contain critical information, making it of little value to cybercriminals.
Why Is Investment Management Software So Essential?
Control. Technology provides investors with more control over their investments through automation, streamlined monitoring, and better transparency. Because data is better managed, investors can view asset performance in real-time, making it possible to make quick decisions without increasing risk. With blockchain technology to secure information, investors can have confidence that their digital assets are safe from cybercriminals.
EXtrance simplifies investment management with a single platform that encourages partnerships through personalized communications. The management platform delivers improved investment tracking with comprehensive data collection for advanced analytics. With access to more nuanced data, investors can make informed decisions that minimize risk.
The platform automates the labor-intensive data entry and manipulation tasks to present a consolidated view for better investment management. It produces reports, monitors contracts, and handles distributions, giving investors more time to devote to investing.