Asset Management Software vs. Spreadsheets: Which is Right for You?

Maintaining a tight grip on your finances is crucial in managing low-income housing. Whether you’re a landlord, property investor, or homeowner, the tools you choose can significantly impact the health of your real estate portfolio.  

This blog will explore the age-old dilemma: What to use- spreadsheets or asset management software? Let’s dive in and unravel the pros and cons to help you make an informed decision for your low-income housing assets. 

Understanding the Tools 

Spreadsheets and Excel have been the go-to tools for data organization, allowing detailed data analysis. Asset management tools, changing the scenario, have made automation and streamlining property management tasks much more manageable. Let’s understand their functionality fists before diving into the pros and cons.  

Definition and Purpose 

Let’s talk about the players in this game. Microsoft Excel and Google Spreadsheets are familiar faces known for their prowess in data organization and detailed analysis. On the other hand, asset management software, like Fusion, is a specialized maestro designed to automate and streamline property management tasks. It goes beyond data storage; it’s your partner in maintaining robust strategies for your low-income housing. 

Common Information and Beyond 

Both spreadsheets and asset management software share a common ground in the types of information they handle. The basics are covered, from financial data and property listings to information and other logs. However, asset management software, especially cloud-based solutions like Fusion, takes the lead. It offers advanced features such as reports, construction and lease-up monitoring, financial statement analysis, tax credit calculations, fund roll-up, and more. Having these features means it can handle the extensive details of your low-income housing business with ease, going beyond the capabilities of traditional spreadsheets. 

Use Cases for Spreadsheets vs. Asset Management Software 

When to Use Spreadsheets 

Spreadsheets shine when simplicity is your ally. If you have a handful of assets or you’re just stepping into the realm of low-income housing, spreadsheets might be the cozy starting point. They fit snugly for basic bookkeeping and tracking information when manual data entry seems manageable.

When to Choose Asset Management Software 

Imagine you’re managing multiple assets. That’s where asset management software can make your life easy. Do you want to reduce manual work by auto-importing and tagging transactions effortlessly? Are lease-up monitoring, real-time updates, and advanced reporting on your wishlist? If yes, asset management software like Fusion is your goto choice. 

Asset Management Software vs. Spreadsheets: Pros and Cons 

We will now talk about the elephant in the room. Spreadsheets or Asset Management Software- who gets the trophy? Every project has different needs, and addressing those requires specific tools. You will be able to pick your winner by knowing the pros and cons of both the contenders.

Spreadsheets 

Pros 

• Familiar Layout: The comfort of Google Sheets and Excel templates for rental properties is like slipping into your favorite pair of shoes. Familiarity breeds efficiency. 
• Customizable Features: Spreadsheets give you the reins. You can customize and tweak to your heart’s content, ensuring complete control over data visualization. 
• Financial Reporting: Need detailed reports for tax purposes? Spreadsheets have your back, producing intricate reports of rental earnings and accounts. 

Cons 

• Human Errors: Picture this – 88% of spreadsheets have input errors from manual data entry. That’s a significant margin for potential oops moments. 
• Manual Processes: Spreadsheets demand time and manual data entry for rental property income and expenses. 
• Complex Calculations: Juggling with advanced formulas and charts? It can be problematic, especially when trying to decode the intricate dance of numbers. 
• No Real-time Financial Reporting: Spreadsheets fall short in real-time reporting. Generating advanced reports at a property and portfolio level becomes a hurdle. 
• No Real-Time Reporting: Schedule E reports for tax returns? Not on spreadsheets’ watch. Real-time reporting is a missing puzzle piece.
   

Asset Management Software 

Pros 

• Accurate Records: Asset management software, the unsung hero, automatically tracks rental property income, rent payments, and expenses. No room for manual errors here. 
• Advanced Bookkeeping and Reporting: Say goodbye to the manual grind. Asset management software generates advanced reports for net operating income, cash flow statements, etc. 
• Tax Reporting: An asset management software enabling you to create reports. Working with such reports means you can directly access all the tables that store your data, eliminating all waiting weeks or months for your third-party software vendor to create reports for you. 

• Construction and Lease-Up Monitoring: An asset management tool allows you to analyze construction costs, change orders, required/actual inspection dates and results, AHIC scores, and construction and lease-up metrics against pre-established underwriting benchmarks. These analyses will help you identify issues and update the property status in real-time.  
• Tax Credit and Fund Roll-Up: A tool for managing assets automatically figures out the yearly tax credits for each building in a partnership. Tax credit and fund roll-up work on the initial 8609 information and qualified occupancy data. At the fund level, the credits for each association are then combined. The final results of yearly fund closings are stored in the asset management software, making it easy to look up past closing information. These software also keeps track of changes in the previous year’s tax credits and applies them to the first open year as an adjustment for current benefits.  

Cons 

• Learning Curve: Yes, there’s a learning curve. Specialized software might seem daunting initially, but fear not. Most rental property software comes with a user-friendly design. 
• Costs: Let’s talk money. Asset management software often comes with subscription fees. While the benefits usually outweigh the costs, it’s a factor to consider, especially if you’re on a tight budget. 
• Limited Customization:  Asset management software might need to be more flexible, unlike spreadsheets, which are the chameleons of customization. Some platforms stick to standard reporting capabilities and fixed financial tracking features.
   

Conclusion 

While spreadsheets might be a friendly starting point, the journey continues. Fusion is one of the most intuitive asset management software that gives you essential project data in just a few clicks. With its advanced features and automation, asset management software emerges as the superhero for maximizing the performance of your low-income housing investments. It’s not just about managing; it’s about thriving in real estate.