Landlords should always be looking for opportunities to make the running of their rental portfolio quicker, easier and more accurate. This will save them time and money, whilst also improving the quality of service given to their tenants. It will also lead to fewer errors, and less stress, as there will be more landlord control.
One of the best ways to do this is with the use of a spreadsheet type program to keep track of property management and cash flow tasks. When looking for a suitable program, landlords will often arrive at two options. Either a generic spreadsheet program such as Microsoft Excel or Google Sheets, or a specialised Property Management Program.
Both have their benefits and drawbacks, and it is up to the landlord to choose the option which better meets their needs.
Ordinary Spreadsheet
This is often where most landlords start when they begin running a rental portfolio. It is a step up from a handwritten ledger, and can make things much more accurate. One of the biggest benefits to a spreadsheet is cost. Microsoft Excel will often be available to most landlords already, and will cost a reasonably small charge. Google Sheets, goes one better, as it is free for personal use. While it may have slightly more limited features, it remains more than adequate to keep track of a rental portfolio.
Spreadsheets are able to be formatted to automatically complete calculations. Once set up, it will likely improve the accuracy of any calculations such as income and expenditure. While it will also save time in the long run.
Another benefit is their ability to be printed or emailed. This allows the landlord to send it to their accountant, if they use one. While with a cloud based application such as Google Sheets, a document can simply be shared with another party.
However with a growing rental portfolio, tasks will become more complex. It will be harder to keep track of things on a spreadsheet. As data must be manually entered, the repetitiveness caused by a larger portfolio may lead to errors.
Another problem is their incompatibility with Making Tax Digital without the installation of an additional plug-in.
Property Management Software
The biggest benefit to a Property Management System is that it goes far beyond the tasks that a spreadsheet can accomplish. As Well as covering all the tasks of a spreadsheet, management systems can alert landlords to dates for property inspections, boiler servicing and gas safety checks. This makes the management process easier as it is less likely an important date will be missed, improving compliance to relevant legislation.
Unlike spreadsheets, there is no need to input data repetitively. Repeat transactions such as rent payments, cleaning and utility bills will be automatically entered, reducing mistakes and miscalculations.
While cost is probably the biggest benefit of spreadsheets, it is likely the largest drawback of Property Management Software. There will likely be a monthly or annual subscription fee and / or an upfront charge. There is also the possibility some systems require additional subscriptions for different packages. For a smaller portfolio, there may not be the justification for this additional and sometimes large cost.
As with spreadsheets above, there will be a learning curve when beginning to use the software. Working out how to input data correctly, without taking too long will take time.
The only other thing to consider is the choice of program. There are many options to choose from, all usually perceiving themselves to the the most useful. Consulting reviews or asking a fellow landlord for advice should lead to a good choice.
Conclusion
The largest likely influence on the choice between a spreadsheet or specialised software will be portfolio size. While a spreadsheet will be suffice for a limited portfolio, larger portfolios will often benefit greatly from Property Management Software. Their ability to be a ‘one stop shop’ for landlords, handling everything from cash flow, inspections dates and even communication with tenants, makes the everyday running more straightforward.
Another option for landlords who do not wish to use either choice, would be to employ the services of a letting or managing agent. They will take over the entire responsibility of running the rental portfolio for a fee of around 10-15% depending on the package chosen.
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Landlord Vision. 2019. Accessed 28th January, 2020, from https://www.landlordvision.co.uk/blog/spreadsheets-property-management/
