Real Estate Management in SAP
Building Your Business Case
In our experience, we find the following scoping and value related questions keep popping up on SAP REFX projects, especially with regards to land management:
Typical Land Use Management Dimensions
Common Land Use Management Questions
- Do I have a complete and accurate electronic database of all my properties;
Properties including all Land and Buildings.
All SAP RE-FX projects have a significant data migration component. You will make the data migration process go significantly faster, with fewer errors, if you have have an accurate, digital database of your properties.
- Do I have complete and accurate information on all encumbrances on these properties?
Encumbrances such as:
Right of Ways
Site Protection(Wet Land)
Site Contamination & Remedial.
- Do I have a complete and accurate inventory of what I own or what I operate?
- Do I have a complete and accurate view of the financial responsibilities I have related to the encumbrances on my land or buildings?
These could be either payables or receivables.
- Do I collect on time or do I pay on time my land/buildings related obligations?
- Do I know which mortgage I have on which property and with which bank or banks?
- Do I have complete and accurate Property Tax information?
- Do I have complete and accurate information on my Joint venture based on each property?
Financial Impact Of Getting The Answers To These Question Wrong
You might notice that most of these types of issues ultimately lead to some sort of financial impact.
Many people believe that such information is already well known and documented.
As it happens, I have an aunt who only recently discovered that her property line was not where she thought it was and in fact, she owned more land than she knew, but in a different place than she thought.
Some of that land had somebody else’s house on it!
Tracing back through the manual records, the error was ultimately traced to a survey mistake made almost a century ago.
Mistakes In Real Estate Records Happen Everywhere
Such mistakes exist across the country and indeed, around the world. Now, she had no need of electronic Real Estate Management Software, such as SAP ERP real estate management software, however, the county where that land was located needed it, as they depend on accurate records for tax collection, zoning, and other uses.
If you expand this problem out to major property owners, such as REITs, or Real Estate Investment Trusts, who may own hundreds or thousands of properties, which they constantly buy, sell and renovate, accurate, digital Land Use Management software functionality becomes a business critical item.
An entity such as a REIT has a requirement to pay out, accurately, a very large proportion of it’s income every year (90%+_) in the US and getting that number wrong can result in some very severe financial penalties.
Wall Street Blueprint
Maximizing Net Operating Income (NOI)
In order to get the number right, while maximizing the Net Operating Income (NOI) on their property portfolio, they need accurate information available to them on a moments notice.
Real Estate Software Consultants
This is where the integration of GIS systems, Business Intelligence Systems, and SAP REFX (SAP Flexible Real Estate), can be used by real estate software consultants to deliver maximum value to all stakeholders. SAP ERP for real estate developers provides real estate cost planning software solutions and other real estate ERP modules that support the full real estate lifecycle.
SAP Disclosure Management
If you really needed to, you could use SAP Disclosure Management to ensure your REIT filings were on time with the government.
By the way, did you know 846 late-filing notices had been filed in just one month (Nov 3-Dec 1 ’09) according to a recent SAP scn blog article.
Compare Real Estate Holdings in Different Areas Using Software
One of the key functionalities required by major property owners is to be able to compare holdings in one area with holdings in another area.
These comparisons can include:
- Property Tax Rates (millage rates)
- Location Attractiveness (can be done with user defined parameters, such as employment rates, walkability, crime rates, climate)
- Past Project Performance
- NOI and Cap Rates.
Real Estate Software Consulting
To learn more about the value proposition of the Land Use Management (LUM) module of the SAP REFX solution, just press the button our SAP Real Estate Software Consultants have prepared on the subject.
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