5 REIT Software Best Practices

REIT Software Best Practices

The REIT (real estate investment trust) industry has come into its own the last decade. As of September 2016, it had a total market capitalization of $1 trillion dollars in the United States. That represents a growth of over 100% since 2011. The sector is now competitive to some of the world’s largest pension funds and private equity firms when it comes to real estate investment and management. A key part of this growth: REIT software.

If you are one of these fast growing REITs, how is your property management software performing? As REITs continue to grow and evolve, so too must their software strategies. This article offers five best practices for REIT software. Data management, analytics and strategic planning are main focus areas.

1. Eliminate Multiple Points of Data Collection

Data entry processes are often overlooked in management software. Organizations rarely audit their data collection processes or identify redundancies in the organization. Redundant data entry can be an efficiency killer, and firms need to establish a platform for data entry. What are the sources and key programs? Who are the main individuals? What does the raw data look like and where is it edited?

2. Eliminate Multiple Data Repositories

Data management is another aspect of REIT software that gets overlooked. We know that redundant data collection is a common problem. Multiple data repositories is another key issue. This can create serious organizational issues. Data silos tend to form when there’s a lack of communication between departments. Individual departments begin to manage and develop their own software systems. This siloed approach can cause years of lost opportunities. Data doesn’t get shared between teams, which leads to inefficiencies and poor analytics.

“A colleague was at an organization that replaced an antiquated pneumatic thermostat system with a modern electronic thermostat system, where everything can be monitored and controlled from a central PC. However, IT has no access to the system, PLUS the system is proprietary in nature. Good times.” – Jonathan Feldman, CIO of the City of Nashville (from Information Week)

3. Use a Prioritization Model for Investment Decisions that Align with Shareholder Goals

REITs have an obligation to their shareholders. REIT software can play a key role in strategic planning. When optimizing capital, managers can focus on shareholder priorities. Each REIT has a slightly different structure. Their decisions about how and when to deploy capital have an impact on net income and the management of revenues.

4. Develop a Multi-Year Investment Strategy to Maximize Shareholder Returns

REIT software can also play a key role in long term capital planning. Budgets vary from year to year. However, REITs can still benefit from developing multi-year investment strategies. Identifying key capital priorities over a long time horizon can help REITs balance cash flow. It helps identify opportunities to phase maintenance and other operating resources.

5. Ensure Software Supports Robust Data Analytics and Reporting

Are you making the most of reporting from your REIT software? Management software automates data-driven processes such as reporting. Managers should have a full understanding of their reporting processes. They need to grasp the process starting from data entry through to end publishing. Identify gaps in the process and areas where software can play a key role. This will help drive both efficiency and accuracy of reporting.

REIT Software and Portfolio Solutions

The REIT sector is evolving and the management of real estate is increasingly complex. Are you a REIT looking at how software can improve operations and cost efficiencies? Contact 4tell™ Solutions to learn how our iPlan™ Portfolio Solution could be a fit.

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