Most people know this, but I will say it again – location is pretty much everything in real estate. And in 2020, the most successful investors are deciding where to invest in real estate by looking at neighborhood data and analytics. They aren’t simply driving around and making decisions based on how nice the neighborhood looks. In fact, nowadays, real estate investors are looking into so much more than just neighborhood crime rate and demographics data – they are looking at actual real estate data.
The Neighborhood Data Every Real Estate Investor Needs
What do I mean by actual real estate data? I’m referring to neighborhood data that shows you whether or not a rental property has the potential to produce cash flow and a good return on investment (ROI) in the area. This is the data investors need. This is how to research a neighborhood before you buy rental property – the right way.
And if you’re a first-time real estate investor, what you need is a way to quickly compare data on multiple neighborhoods at the same time. A lot of real estate investor websites require you to search for a specific neighborhood. Then, they’ll provide you with some data. But what if you have no clue where to start? For this, you need a neighborhood app – one that uses up-to-date real estate market data for areas across the United States to provide reliable ROI estimates and forecasts. This will help you easily find the best places to buy rental property in the city of your choice.
Where Can You Get the Data and Tools You Need for Neighborhood Research?
Mashvisor.
A lot of people know that Mashvisor allows you to analyze investment properties for sale. But what they may not know is that Mashvisor is a leading provider of neighborhood data. Using Mashvisor’s neighborhood analytics and research tools, an investor can find the best neighborhoods for real estate investing in just a few minutes.
Let’s take a look at the two main ways you can complete your neighborhood analysis using Mashvisor.
Related: How to Do a Neighborhood Analysis in Real Estate
Start with the Real Estate Heat Map
As mentioned, you may have no clue which neighborhood you want to research and obtain data for. And that’s perfectly okay. At the same time, researching neighborhoods one by one to see which is the best is not the right way to go about it. It’s time-consuming and will probably require you to organize all your neighborhood data into countless spreadsheets for proper comparison and analysis.
Instead, go about your neighborhood search using Mashvisor’s Real Estate Heat Map. With this tool, all you have to do is enter the name of any city in the US housing market. Let’s say you’re interested in buying rental property in the Phoenix housing market. Once the city’s name is entered into our Real Estate Search Engine, the software will pull up a map of all the neighborhoods in Phoenix.
Now it’s time to compare them all at once to find the best one. It sounds overwhelming, but Mashvisor’s Heat Map and neighborhood database allow you to conduct this all-encompassing analysis easily through a few different filters. These include:
- Listing Price: Find neighborhoods in your budget and see how affordable one neighborhood is compared to the rest in the city.
- Airbnb Rental Income: Want to rent out an Airbnb investment property? Identify neighborhoods where Airbnbs produce high rental income for positive cash flow.
- Traditional Rental Income: If you’re more of a traditional real estate investor, look for neighborhoods that will allow you to make a lot of rental income using this filter.
- Airbnb Cash on Cash Return: Compare the kind of Airbnb return on investment you can get across the city.
- Traditional Cash on Cash Return: Find a neighborhood where you’ll get the highest return on investment with your long-term rental property.
- Airbnb Occupancy Rate: You need to invest in Airbnb where these rental properties are in demand. Use this filter to find just that.
Mashvisor’s Real Estate Heat Map
Related: Where Can You Find Airbnb Occupancy Rate Data for Real Estate Investing?
Select one of the filters and the Heat Map activates. If you’re looking for neighborhoods where rentals produce high rental income, select the Traditional Rental Income filter. You’ll see that neighborhoods instantly become color-coded. Neighborhoods where rental properties produce high rental income will be in green and those where it’s low will be in red. Other colors between this spectrum are used to give you an idea of the range of rental income you can earn in each neighborhood.
You can also hover over neighborhoods to get more data. The neighborhood information presented to you will include the median price, cash on cash return, and cap rate for the neighborhood.
Using this real estate investment tool, you’ll have instantly compared multiple neighborhoods across the city. You can easily weed out bad neighborhoods for investing in real estate and identify great ones.
But now that you have an area or two in mind, you still need more neighborhood data to make your final decision.
Visit Mashvisor’s Neighborhood Analytics Page for the Area of Your Choice
You need to continue researching a neighborhood that looked promising on the city-level. Mashvisor provides in-depth neighborhood level data and analytics on every neighborhood in the database.
From the Real Estate Heat Map, you can click on the name of any neighborhood and you’ll be taken to the Neighborhood Analytics Page. This page will provide more insights specific to the real estate trends in the neighborhood. These include:
- Median Price
- Average Price per Square Foot
- Traditional and Airbnb Cash on Cash Return
- Traditional and Airbnb Rental Income
- The Number of Properties in the Neighborhood (Airbnb, Traditional, and For Sale)
- Airbnb Occupancy Rate
- The Optimal Rental Strategy (Traditional vs Airbnb)
- Walk Score
- A Rent Analysis of Historical Rental Income for Local Airbnb and Residential Properties
- Historical Airbnb Occupancy Rate
- Real Estate Comps
- Optimal Property Type
- Optimal Number of Bedrooms
That is a long list of neighborhood data but it’s all key to analyzing an area and determining whether it’s the right place to invest. It’s much better to take a look at this kind of data for yourself to get a better idea of exactly how useful it will be for your analysis. Sign up for a 7-day free trial with Mashvisor now to access all of this neighborhood data and the Real Estate Heat Map.