Beginner Investors What Real Estate Data Do You Need to Analyze Investment Properties? by Tanja Trkulja May 20, 2022May 19, 2022 by Tanja Trkulja May 20, 2022May 19, 2022 If you’re looking to invest in a property, a proper analysis with accurate real estate data is an absolute must for investment success. Table of Contents Why Is Real Estate Analysis Crucial Before Buying an Investment Property? 12 Important Real Estate Data Metrics for Analyzing Local Markets and Investment Properties What Is the Best Source of Real Estate Data? To Conclude Why Is Real Estate Analysis Crucial Before Buying an Investment Property? A real estate analysis is also often referred to as comparative market analysis, and it focuses on analyzing the current property market values. Essentially, this allows for a comparison with the property that the investor is trying to sell or buy. Regardless of whether you’re in the market to sell or buy investment property, a real estate analysis is a crucial part of the process. Namely, it helps you get a better understanding of the current house market, potential real estate prices, the value of similar properties, and so on. Thanks to the information and real estate data available from a comprehensive real estate analysis, investors can assess whether the asking price fits within their budget and is generally reasonable. Also, this can help the sellers set the ideal listing price for their property. Aside from being able to get the real estate market data that will make the investing process safer and more secure, performing the real estate analysis will also provide insight into the following: Choosing the right city to invest in Learning potential issues that might make one place more investment-friendly than the others Getting familiar with the area demographics that will affect the future evolution of the said area Having access to investment projects info for specific areas that will let you in on future development and potential boost of property values When you are aware of the most important real estate data, especially in terms of housing market prices, you can avoid making the mistake of paying more for a certain property and even be able to negotiate for a better price. Related: The Ultimate Beginner’s Guide to Real Estate Investment Analysis 12 Important Real Estate Data Metrics for Analyzing Local Markets and Investment Properties Regardless of whether you’re an experienced or amateur real estate investor, it’s crucial that you know what real estate data sets are the most important to look at when trying to make your decision. Thankfully, modern technology allows for easy access to essential real estate data metrics. That said, the following will undoubtedly prove useful to you as an investor: Number of listings for sale Median property price Average price per square foot Days on market Number of traditional rental/Airbnb rental listings for sale Monthly rental income Cash on cash return Cap rate Price to rent ratio Short-term rental daily rate Short-term rental occupancy rate Walk score 1. Number of Listings for Sale The number of available listings for sale is a rather important and straightforward metric that can point to the value of available properties as well. Basically, when there’s a shortage in a certain real estate housing market, it’s also natural to expect higher real estate appreciation. Fortunately, the number of active listings seems to be going up. This particular metric keeps track of the active listing count when it comes to the available properties for sale in the US housing market. Investors can use tools like Mashvisor to further narrow their real estate data down to a specific city and even a neighborhood within the said city. In general, the number of listings for sale increases during summer, starts to dwindle during the fall, and often marks a noticeable drop during winter. Start Analyzing Investment Properties 2. Median Property Price The median property price is another essential metric in your real estate data analytics. The meaning of median property price refers to the price of the middle property in a list of properties that go from the highest to the lowest sale price within a set time period. In that sense, if a list contains 33 houses that have been sold, the 17th most expensive house counts for the median property price. You may be wondering why you should care for the median property price metric more than the average one. The average property price refers to the price you get when you take all the sale prices, add them up, and then divide that by the number of sold properties. In some cases, the median and average property prices will be relatively similar. But, it’s also not uncommon that there are certain properties with an unusually high or low selling price, which can then throw off the accuracy of the average property price metric. Therefore, median property price is a better indicator of the general house prices in a specific area. Related: Learn the Difference Between Real Estate Market Value vs Market Price 3. Average Price per Square Foot To put it simply, you can calculate the average price per square foot of a home by dividing its current market value by the home’s square footage. Of course, there are several different factors that will affect this metric. This is precisely why real estate data providers like Mashvisor are extremely valuable as they allow you to get instant access to the average price per square foot within specific cities and neighborhoods. 4. Days on Market When it comes to the days on market metric in your real estate data, it is used to assess the market conditions and even help you find properties that might be available for price negotiation. In case the property has been available on the market for a longer time period, chances are that the seller is more willing to negotiate the final price so they can sell their property as soon as possible. 5. Number of Traditional Rental/Short-Term Rental Listings for Sale Investors can gain more insight into the number of available listings for sale based on whether they’re looking to buy traditional or short-term rental properties. In that respect, it’s rather useful to get valuable insight into these two specific metrics. They will provide more information on the current real estate market and property availability within the investing route you wish to take. 6. Monthly Rental Income Monthly rental income or just MRI for short refers to the month-by-month income you get as a property owner when you rent out your property. It is important to know this particular real estate data metric so that you can relatively estimate your earnings from the investment property you’re interested in. It also allows you to calculate the monthly rental income tax you’d have to pay as an owner, thus further making the final earnings estimate more accurate. 7. Cash on Cash Return Another very important metric is cash on cash return, which basically tells you the percentage of the cash you should be making off of the investment property in question, based on the cash you’ve invested. It also includes mortgage and debt service into the equation. This particular metric is valuable for a number of different reasons, but a big one is that it can help you decide what the best financing option is for your new investment. It can also help you estimate the potential returns during the probable capital expenditure years. 8. Cap Rate When it comes to market data real estate metrics, cap rate refers to the ratio between the income you’d get from an investment property to the property’s current value or the invested capital. Essentially, the cap rate provides you with a percentage of the profitable investment value. It is often said that the higher cap rate comes with higher investment risk. This is due to the fact that a higher cap rate also indicates higher returns. A lower cap rate means a more secure and safer investment, but it also indicates lower returns. 9. Price to Rent Ratio The price to rent ratio is a useful metric that can help you determine whether it’s cheaper to own or rent out a property. Essentially, it refers to the ratio of house prices to the annual rent in a specific location. This particular metric is also valuable when it comes to checking whether the real estate market is in a bubble or is valued fairly. 10. Short-Term Rental Daily Rate The short-term rental daily rate is the metric that shows how much money the owner of a rental property makes per day when the property is open for bookings. If you’re looking to invest in an Airbnb vacation rental, for example, it’s best to look for a location or property that can generate a higher short-term rental daily rate. What’s more, if this metric seems to be growing, you can be certain that the property’s value is steadily increasing as well. 11. Short-Term Rental Occupancy Rate Basically, the short-term rental occupancy rate metric refers to the ratio of the number of days a property is occupied to the number of days it’s available for rent. It’s a simple division of booked nights by total available nights. It’s rather challenging to calculate the Airbnb occupancy rate on your own as there are many different factors to take into account, such as seasonal trends and fluctuations, location, and so on. This is why Mashvisor can come in handy and help investors get immediate metric estimates while considering all of the determining factors as well. 12. Walk Score Simply put, the walk score metric indicates the walkability of a specific address. When you pick a property that you’re interested in, its walk score will be the result of analyzing a bunch of different walking routes from that address to all nearby amenities. The walking distance will determine just how many points the walk score will get. For instance, amenities that are located within a 5-minute walking distance from the specific address get maximum points while amenities that require more than half an hour walk get no points. What Is the Best Source of Real Estate Data? As mentioned, performing a thorough real estate market analysis is an absolute must for securing the best investment deal for your portfolio. By using Mashvisor, you can gain access to accurate and valuable real estate data with a click of a mouse. More specifically, you can access property data, real estate market data, and real estate investment data. Property Data Thanks to Mashvisor’s Property Finder, investors can instantly gain insight into the real estate database with available investment properties. This database is backed by MLS and other available sources that provide the most up-to-date and accurate information. You can use the Property Finder for both traditional and short-term rental listings. Furthermore, investors may also be able to come upon off market properties in the search results. Mashvisor’s Property Finder is a handy tool for searching in up to 10 cities at once. You can then narrow down your list by crossing out or selecting the properties with your desirable real estate data. Real Estate Market Data Mashvisor’s real estate blog is all you need to get information about US cities in terms of real estate markets. That way, you can start narrowing down your list of the ideal locations for your investment plan. And once you’re relatively certain what cities you’re interested in the most, you can make the most out of Mashvisor’s Heatmap tool. Namely, this tool will allow you to perform city-based searches with applicable filters such as your budget in order to pinpoint the most profitable neighborhoods for your investment. If you aren’t sure whether to go the traditional or Airbnb route, this tool will also provide valuable insight on that. With Mashvisor’s heatmap, you could get an overview of which parts of a city have higher cash on cash return, rental income, listing price, or occupancy rate. Real Estate Investment Data When you find a couple of properties that meet your criteria, it’s paramount to analyze them further. For this, you can use Mashvisor’s Investment Property Calculator. Just by clicking once, you can get the most accurate real estate property data concerning the property you’re interested in. Related: The #1 Real Estate Investment Calculator in 2022 For instance, you’ll receive a report on metrics such as return on investment, cap rate, cash flow, cash on cash return, estimated expenses, potential rental income, and more. Also, you can use this calculator for your Airbnb analysis and get info about the property’s optimal investment strategy. To Conclude No investment decision should be made without a comprehensive real estate analysis and careful examination of the available real estate data. Fortunately, Mashvisor can provide you with all the tools and metrics you could possibly need, thus considerably shortening the time and effort to analyze. You won’t need to wait for agents to provide you with the information or depend solely on them for showing you the available investment properties. Most importantly, Mashvisor provides the most accurate metrics and calculations, meaning you won’t need to manually guesstimate the profitability of different properties. To learn more about everything that Mashvisor can do for you and your investment journey, sign up for a 7-day free trial today. Start Your Investment Property Search! START FREE TRIAL AirbnbCap RateCash on Cash ReturnInvestment Property AnalysisMarket AnalysisReal Estate Data 0 FacebookTwitterGoogle +PinterestLinkedin Tanja Trkulja Tanja Trkulja is an experienced content writer with a keen interest in exploring and explaining the world of real estate. She is a written word enthusiast, always in awe of nature, a Hufflepuff, and a Whovian. Previous Post What Is a Cash Flow Calculator for Real Estate Investors? Next Post The State of the US Real Estate Housing Market in 2022 (So Far) Related Posts Return on Investment and Risk in Real Estate How to Build a Real Estate Network You Can Really Rely On Top 5 Tips for First-Time Real Estate Investors Is a Triplex a Good Investment Property? Is Real Estate Investing Worth It? How to Become a Landlord in 2020: 6 Steps 5 Common Real Estate Challenges & Their Solutions Creating a Real Estate Investment Network: Who Do You Need? Developing a Real Estate Investing Business Plan for Beginner Investors The 10 Things That Everyone Should Know About Real Estate Investing Buying Stocks or Real Estate for Investment Purposes: The Better Option Non Arm’s vs Arm’s Length Transaction in Real Estate Leave a Comment Cancel Reply Save my name, email, and website in this browser for the next time I comment.