Smaller portfolio landlords can now analyse their current and proposed property investments in a way previously only bigger players and build-to-rent operators have been able to do.
This follows the launch of portfolio management software firm Lendlord’s new tool, which it claims enables landlords to make better informed decisions about how to grow their property business by analysing key metrics that underpin property investment including:
Net Annual Cash Flow – how much is going in and out of your property investment.
Yield – usually the gross or net profit you make each year as a percentage based on income divided by property value.
Cash on Cash – the income earned expressed as an annual percentage of the cash (but not debt) you originally put into a property.
ROI (Return on Investment) – how much profit in total a property will make over a given period.
Cap Rate – Another way to measure the expected return on a property investment.
Equity Multiple – the expected return on an investment based on the money you put in. So a 2x multiple would mean you got back twice the amount you put in.
DCR (Debt Coverage Ratio) – a measure of whether you have enough rent to pay your mortgage.
GRM (Gross Rent Multiplier) – ratio of the price of a property compared to its annual income.
IRR (Internal Rate of Return) – one way to calculate the future profitability of a property investment.
Lendlord also offers an online mortgage engine to match landlords to their ideal home-loan based on their profile.
“We are very excited with this new release that will help landlords and property investors to get the right view on what should be their next step, based on an enhanced analysis and data rather than intuition,” says Lendlord CEO Aviram Shahar.
“We believe that a thorough analysis of deals is important now, more than ever, as risk has been amplified through the impact on the property market of Covid19,” says Aviram Shahar, CEO of Lendlord.
“Landlords should adopt a ‘digital first’ approach to help mitigate this risk through the use of tools like ours.”