Real Estate Analysis Use Real Estate Analytics to Find the Best Real Estate Investments by Sylvia Shalhout June 21, 2018June 19, 2018 by Sylvia Shalhout June 21, 2018June 19, 2018 You may already be a real estate investor, but if you’re not using real estate analytics to make all of your decisions, then you’re likely missing out on some of the best real estate investments out there. And if you’re a beginner real estate investor, then starting out with real estate analytics will put you on the path to success with investment properties. That’s because real estate analytics has changed the world of property investment for the better. It’s true, the traditional elements of real estate investing like networking, your ability to haggle a deal, rental property management, and investor’s intuition all still play a role in the success of a real estate investment. But real estate analytics levels the playing field to a greater extent than ever before. That’s why every real estate investor needs to use real estate analytics to find the best investment properties. Big Data, Real Estate Analytics and You- The Dream Team When we hear words like “big data” and “real estate analytics”, our minds might drift to something resembling a scene from the movie “The Matrix.” Big computers and millions of numbers we can’t make sense of. In reality, it’s not that complicated from the real estate investor’s point of view. Big data is simply the idea that, with where technology has brought us today, we can store unimaginable amounts of data on every real estate market and investment property. Taking big data and analyzing it to make perfect sense to the real estate investor is real estate analytics. To learn more about how we will help you make faster and smarter investment decisions with real estate analytics, click here. There Are Two Types of Real Estate Analytics… And a real estate investor should be using both if he/she ever wants to find the best real estate investments. Real Estate Traditional Analytics Real estate traditional analytics is the result of taking big data, analyzing it, and figuring out what happened in the past with real estate markets and investment properties and why. For example, using real estate traditional analytics, an investor might see that a rental property did well last year because of factors A, B, and C. With those same factors in place at the moment, the real estate investor might jump at the opportunity of buying an investment property that has had a successful past. But that’s where real estate traditional analytics needs its partner, predictive analytics. Related: Using Predictive Analytics Makes Real Estate Investors Rich Real Estate Predictive Analytics Real estate predictive analytics is when big data is used to “predict” the future. Essentially, the real estate investor from before should use real estate predictive analytics to see what would happen if A, B, and C were changed. With real estate traditional analytics, you can make the simple guess that if these factors are changed, the investment property is affected accordingly, either negatively or positively. But real estate predictive analytics makes it less of a guessing game. This form of real estate analytics will tell us the likelihood that these factors will change and the most plausible effect they’ll have on this particular investment property. Essentially, big data is analyzed to figure out possible and realistic future trends and predictive analytics is born. It helps a real estate investor find the best real estate investments that are likely to be the best a year from now or two or ten years from now. Learn More: The Power of Predictive Analytics in Real Estate Investing Of course, we have to emphasize that no existing technology in real estate investing or otherwise can actually predict the future. But real estate predictive analytics gets us pretty close by giving us reliable forecasts based on tangible evidence. Why You Need Real Estate Analytics on Your Team The obvious benefits of both traditional and predictive analytics can’t be ignored. For one, this kind of big data and its analysis is accessible to every real estate investor. You are handed one of the greatest advantages in real estate investing, no questions asked. With real estate analytics, you can make the most informed decision, as we saw with our real estate investor before. There’s no guessing involved. With real estate analytics on your side, you can now have a better understanding of real estate markets, investment properties, and real estate investing in general. All of that adds up to one undeniably important benefit: With real estate analytics, the risk in real estate investing is greatly reduced. After all, you are risking a large sum of money, time and effort. You should turn to any reliable path to reduce the risk of loss. How to Use Real Estate Analytics to Find the Best Real Estate Investments You’re ready to use real estate analytics because you realize it will help you make money in real estate. So let’s answer the question of “How?” How can you use real estate analytics to find the best real estate investments? Real Estate Analytics and The Location In a time before real estate analytics, investors chose real estate markets based off of prior experience on what worked and what didn’t. A lot of it was a guessing game and a lot of it had to do with instinct. This meant real estate investing required a special kind of talent that not everyone possessed. Now, with real estate analytics, honing in on a prime location for real estate no longer needs to be one of your special gifts. With a basic understanding of how to invest in real estate, you can look at the numbers real estate analytics provides you and determine the best places to invest in real estate. For example, Mashvisor provides the following real estate analytics about real estate markets and their neighborhoods: Median Property Price Traditional and Airbnb Rental Income Traditional and Airbnb Cash on Cash Return Traditional and Airbnb Cap Rate Airbnb Occupancy Rate Optimal Rental Strategy With that kind of data on rental properties in any US real estate market, it becomes easier to make the decision of where to invest in real estate. Not only is the decision easier, it’s safer, thanks to real estate analytics and, well, Mashvisor. To learn more about Mashvisor’s real estate analytics tools, click here. Real Estate Analytics and The Investment Property Real estate analytics doesn’t just send you on your way once you’ve chosen one of the best places to invest in real estate. No, it helps you to find an investment property that you can be confident will make money in real estate. Continuing to use Mashvisor as an example, our investment property calculator uses real estate analytics to show you what kind of return on investment you can get with a specific rental property. Look at expected rental income, cash on cash return, and cap rate while taking into consideration your financing strategy and monthly rental property expenses. Choose the best real estate investments and have the evidence to back up every step you take when investing. Put real estate analytics to the test and you won’t be sorry. To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here. Related: How Should You Use Real Estate Analytics to Your Advantage as a Real Estate Investor? Why invest in real estate without this powerful teammate? We can’t imagine why anyone would! What’s your take on big data and the real estate industry? We’d love to hear from you in the comments below. Start Your Investment Property Search! START FREE TRIAL Start Your Investment Property Search! START FREE TRIAL 0 FacebookTwitterGoogle +PinterestLinkedin Sylvia Shalhout Sylvia was the Content Marketing Manager at Mashvisor. As a real estate writer, she has been covering topics for the beginner and advanced real estate investor, helping them make smarter decisions as well as real estate agents looking to take their business to the next level. 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