When it comes to managing a real estate investment business, there are lots of tools on the market to help make things run more smoothly and free up your time. But some of them can actually hurt your business more than help.
Here are a few questions to ask when evaluating a new online tool and whether it’s really the right tool for your business. These questions can be applied not only to bookkeeping or financial tools, but also other online tools or software for business.
How long will it take to learn it?
In most cases, one of the goals for using an online tool is to save time in your business. But if the tool you select takes a long time to learn and you still struggle with it each time you use it, is it really saving you time?
I talk to a lot of people who use Buildium, which is a property management tool. Tenants can submit applications and pay rent through it, and it has some financial tracking as well. As a bookkeeper, I get asked often if I can work with that platform. And while I can, I don’t recommend it. The learning curve is pretty high, and it has a lot of quirks when it comes to the financial pieces.
Personally, I’m a bigger fan of Cozy for the rental application and rent payment aspect and then using an actual bookkeeping software for that aspect of your business. Cozy is a quick and easy tool to learn, and it does that one task extremely well. Plus it’s free.
Does it provide the information you really need?
When you first look at an online tool to help your business, you’re going to see a lot of attractive features. You may think this one tool is the answer to a lot of your problems. Sometimes it is, but sometimes it isn’t.
Before you start evaluating a new tool, take some time to really think about what information you need for your business. When it comes to a bookkeeping tool, you’ll want a balance sheet, a profit and loss statement, and some other monthly information that clearly shows where your business stands. If a tool can’t easily provide that for you, it’s not the right bookkeeping tool.
Can people who need the information access it?
Ease of access is another thing to consider, whether that’s ability for your tenants to pay rent quickly and easily or for your accountant to access your financial reports in order to prepare your taxes and advise you on business decisions.
When you’re using a specialized software, you want to be sure it’s easy to understand and use, provides clear information, and can be easily accessed and navigated by a third party. It’s an important thing to consider in the overall goal of saving time for your business. You don’t need a complex online tool to make your business run, especially if it’s going to take hours for you to learn it. You need simple systems that you build up over time. And if some of those systems and tools are free, even better.
Doing your homework about the online tools you use and asking yourself these three questions can help ensure you select the right tool. It’s also helpful to remember that some of the major names out there are major names because they spent a lot of advertising money to be well known. You might have to search a little harder for some of the lesser known tools, but they might be just the right tool at a much lower price.