Earning the big bucks is why the majority of real estate investors are in the business. It’s no secret that real estate investing helps people get rich. After all, 90% of millionaires owe their fortune to real estate, so why not shoot your shot?
While the majority of real estate investors aren’t millionaires, all successful investors share two things in common. One: they get rich off their properties. Two: they get rich because of predictive analytics.
The Meaning of Predictive Analytics
Predictive analytics may sound like a term restricted within the walls of data firms, but it is becoming commonplace among real estate investors. All the term refers to is the analysis of big data using old data, or traditional analytics, and current trends to predict future outcomes. Of course, this method of analyzing big data is not only used in real estate investing. Everyday matters, such as, for instance, weather forecasts and online ad placements both use predictive data.
In real estate, predictive analytics serves many vital functions. Using predictive analytics tools is a surefire way for real estate investors to get rich. Here are some of the ways such real estate analytics helps you do just that.
Finds the Best Real Estate Investing Locations
Location is key when investing in real estate. With such big data existing on potential areas, how can a real estate investor find the best location? It’s easy, just use predictive analytics tools to match you with the best location. Mashvisor’s rental property calculator, for instance, is the best example of such predictive data analytics tools. It uses a heatmap analysis, backed by predictive real estate analytics, to locate the ideal property for you based on your inputs. Inputs include many variables, such as rental income and operating expenses. Feel free to read more about the heatmap analysis by clicking this: “Finding Income Properties Using a Heatmap.”
Pinpoints the Best Real Estate Investments
Combined with traditional analytics, predictive data analytics also helps investors with property search. Like location search, property search is an extremely important part of buying a rental property that needs meticulous research. Most of this research is already done for you with predictive analytics tools, all thanks to, you guessed it, predictive real estate analytics.
Just like location search, property search is a function of Mashvisor’s calculator. The calculator also uses a heatmap for property search, much like it does for location search. Properties can be searched for based off expected cash on cash return, number of bedrooms, rental strategy, and more. Actually searching for a property will clarify the function of the predictive heatmap much more, so why not give it a try? Click here to start your 14-day free trial with Mashvisor!
Projects the Expenses of a Rental Property
The profitability of a property depends on two main things, expenses and returns. Luckily, predictive real estate investment tools are able to project both of these values! When it comes to expenses, real estate analytics will estimate them all. The most recent data project operating expenses, such as maintenance, and financing expenses, such as mortgage payments. As always, real estate investors will have to insert some input data for the best results.
Estimates the Returns of Real Estate Investments
The core of profitability comes from the returns of a property. The most important data on returns, such as rental income, cap rate, and cash on cash return, are all estimated through the use of predictive real estate investment tools. Advanced data, such as Airbnb occupancy rate, are also projected through predictive analytics. There’s only one source that has such advanced predictive data: Mashvisor’s rental property calculator. To learn more about what’s in store when using our real estate investing calculator, read this: “Investment Property Calculator for Analyzing Real Estate Investments.”
Approximates Real Value of Properties
The best real estate investments procure profit both as rental income and as appreciation. Just as predictive data helps investors make better decisions with rental income, it does the exact same thing with appreciation. The main difference is that this data will fluctuate more with appreciation, but the fact remains. Predictive real estate investment tools can predict both the income and appreciation a property will generate.
Chooses the Optimal Rental Strategy
Picking a rental strategy can be a difficult task for real estate investors who stick with traditional analytics. They have to manually run the numbers, which is very prone to error. By using predictive analytics, on the other hand, investors can easily find out which rental strategy is best for their property. The predictive data will take many factors into account, such as location, general trends, and much more. The data will also require your own inputs so that you are matched with the optimal rental strategy for you and your property. To learn more about the different investment strategies out there, read this post: “The Top Six Real Estate Investment Strategies.”
Provides Data for a Real Estate Market Analysis
A real estate market analysis is a vital form of real estate analytics every investor needs. In order to perform such analysis, the investor must find information on rental comps. Without predictive data, finding information on real estate comps is tedious. As with traditional analytics, the investor would need to manually crunch all the relevant data. It should come as no surprise to find out that predictive analytics helps solve this issue! Predictive data locates rental comps in a matter of minutes. Mashvisor’s calculator constantly renews data on different real estate comps. Based on your preference, you could then decide to do your own real estate market analysis or allow Mashvisor to do it for you.
The need for predictive analytics is a no-brainer. The constantly updated data is used in real estate investment tools, especially the rental property calculator, that are must-haves in real estate investing. You’re definitely going to want to use the data, so click here to start doing so when looking for the best investment properties in your area!