A huge part of using data effectively is employing it meticulously and systematically. Usually, most successful rental real estate investors employ the Automated Valuation Method to make an estimate of current home values. Zillow creates algorithms that calculate the estimated or “suggested price” of properties around the country. However, you don’t need to be a real estate giant to leverage the data they collect and offer to the public. Platforms like Trulia and Realtor regularly create and share data from individual property histories to neighborhood trends and more. You can even search for and use tools like mortgage payment calculators to make your number-crunching done quicker and be more accurate.
One easy way to gain access and use existing data in your real estate investing is to study foreclosure reports. Not only can you draw beneficial information concerning property values in an area or even for an individual house, but you can also look at foreclosure reports over time for market patterns. If the prevailing report unveils a sudden spike in foreclosures, that can be a clear warning of economic trouble in that area.
You can equally use foreclosure reports to help you distinguish thriving markets at the outset of their growth phase, generating accelerated appreciation as the market strengthens. Although, still, it’s essential to always keep in mind that foreclosure reports are pictures of the past and not necessarily current market conditions. Conceding that the facts detailed may be worth it, it isn’t all the time the ideal place to look for up-to-date market data.
Taking into account the limitations of foreclosure reports, it’s critical to reference a wide range of sources in your data collection process. Together with government sources similar to the U.S. Census Bureau and U.S. Department of Labor, you should furthermore closely monitor local newspapers, county registers, and similar data sources. Each of these sources offers a part of the complete picture, which is then up to you to put together.
With all that data in hand, your next appropriate move is to utilize it to narrow your property search to a specific area or property type. In the case that you don’t, you risk wasting a good deal of time looking for properties that will not add up to solid profits or looking at markets that are dropping like flies.
With the wise use of the information learned from websites, reports, the MLS, and local sources, you can more proficiently check out prospective properties for further analysis. This strategy effectively uses data as a tactical tool to strengthen your investing ventures in the exact same way the big investors do it. In the long run, you may find that leveraging data the correct and appropriate way will support you to attain more than you ever thought possible.
If all that only looks to be too time-consuming for you, Real Property Management Diversified offers a free market rent analysis to get you started on your investment journey. Contact us online or call us at 352-854-2221.