Rental Analyst
Weed out the good deals from the bad ones using Rental Analyst software. The package allows you to analyse single properties or entire portfolios and compare numbers of properties
Wednesday, August 30th 2006, 4:32PM
by The Landlord
Product: Rental Analyst
Weed out the good deals from the bad
Price: $229 as a download [$25 extra if you want a CD]
Over-all rating: 4 out of 5
Website: www.rentalanalyst.com
It’s frightening the percentage of investors who buy properties on emotion, not the numbers.
Rental Analyst is the latest in a stable of such real estate analysis products aimed at New Zealand investors, with our tax system and other investment norms in mind.
The product, launched quietly earlier this year is the second from software designer Andrew Keat – a property investor himself – and follows on the heels of RentMaster, Keat’s popular property management software.
It allows you to analyse single properties or entire portfolios and compare numbers of properties. In short, Rental Analyst is designed to:
· Work out if your pre and post-tax cash flow will be positive or negatively geared
· Determine your expected cash return, cap rate, loan to value rate and debt to service ratio
· Calculate your total net worth
· Work out your buying capacity including data from trusts or businesses
· Compare properties against each other
· Set goals and flag properties that don’t match up
· Juggle your numbers in “what if” scenarios.
· Prepare customisable graphs
· Do a yearly depreciation analysis
To be frank, most of the competing products do the same as this. Where Rental Analyst differs from its competitors is that:
A: It can be run on a hand-held computer or telephone running the Pocket PC software from Microsoft – which means that you don’t have to wait until you get home to crunch the numbers. However anyone with a laptop can do the same while on the road.
B: Keat has plans to make his two products inter-operable in the future – meaning that details you type into Rental Analyst could be transferred into RentMaster should you buy the product.
The program downloaded and installed completely uneventfully. There’s a free trial period (as is normal with most software) which lasts 15 days.
As far as software goes, Rental Analyst is pretty straightforward and a computer user of average ability will probably have little need to resort to the help manual or online demonstrations all that often.
There’s a useful “Getting Started” guide on Rental Analyst’s website if you get stuck. What’s more, there are online demonstrations, where you can watch how the software is used and listen through your computer speakers or headphones to a running commentary.
The first time you start up it takes you to a set-up window, where you are asked to enter default configuration settings, such as your country, default mortgage duration, depreciation rates, etc. The boxes are already filled in with suggested rates, however they can be customised. At the end of the set-up process, you’re invited to give feedback if the default values weren’t correct for your country.
Once you’ve entered specific details for a property or properties you can compare 1 to 20 years of cash flow, and 1 to 20 years of equity growth.
You can view your data in a variety of graphs, covering pre-tax cash flow, after-tax cash flow, tax, depreciation, income, expenses, market value, equity, interest and principal.
The Goals section of the software allows you to enter defaults for: minimum pre and after-tax cash flow, minimum gross and net yields, maximum loan-to-value ratio, minimum capitalisation ratio, and minimum equity percentages. The advantage of entering goals is that every property you compare can be benchmarked against your goals.
Most of the drop-down menus across the top of the Rental Analyst are pretty straightforward, except perhaps Database Management where in fact you can back-up the database.
One good feature is “help” buttons on every input screen – meaning you don’t have to leave where you are to find out what a certain feature does or how to use it.
Other useful features include built-in mortgage, tax and depreciation calculators, the ability to enter income from shares, other businesses and bank interest.
Rental Analyst was relatively bug free. However on the downside, there are some issues that need ironing out in the next update. For example, the New Property Wizard only includes a “rent per month” box, not weekly or fortnightly, which doesn’t fit completely with the way we charge rent – usually weekly. I had to multiply the weekly rent by 52 and divide by 12 in order to get the monthly figure. Perhaps straightforward for some, but a weekly rent box here would have solved the problem.
The New Property Input screen allows you to enter basic details. You then need to click on “Details 1” and “Details 2” tabs to enter more information such as council rates, land value and other variables. It might pay to include a button in the new property wizard which allows you to enter simple details or full details on the property.
There are other odds and sods of teething problems. For example, it would be helpful as well if Rental Analyst could export to Microsoft Excel as well as Word for Windows.
In the portfolio view I had difficulty finding out how to view the analysis of individual properties. I needed to click an “edit”, rather than “analyse” button to see the full analysis of each property.
One potential downfall with this program, as with many property investment programs in New Zealand, is that it’s published by a one-man band. In all fairness, I’ve found the man in this case to be very responsive to queries but realistically anyone publishing software has to go on holiday eventually, which may not be ideal for users.
Rental Analyst is cheaper than both of its main competitors – REAP, which sells for US$445 [or $495 on CD ROM] and PIA, for $295. Both are excellent products as well and many property investors swear by them.
There’s a 20% discount on RentMaster if you buy Rental Analyst first.
System requirements:
· Windows 98, NT or higher.
· 10MB of free disk space
· Administrative rights to install the software on Windows 2000 or higher
Verdict: Simple, but powerful investment property analysis
Pros: Easy to use.
Cons: Teething problems that need attention.
Reproduced from the NZ Property Magazine, June 2006
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