It’s time to say goodbye to the investing methods of the old days and welcome the latest real estate technology instead!
After the real estate market crash in 2008, investors realized that relying on conventional investing tools is no longer sufficient for the industry. That is when the need for real estate technology emerged and along with it came many companies offering all kinds of real estate technology. These companies have contributed to the drastic market transformation in a matter of fewer than 10 years. From listing properties for sale to buying an investment property and everything in between, technology has crept into every step of the process. It turns out that technology is what a real estate investor needs to make the most profitable investments.
With so many different tools and forms of real estate technology to choose from, which are the absolute must-haves that every real estate investor needs to succeed?
#1: Heatmap Analysis Tool:
One of the prevalent real estate technology trends is taking complicated data and turning it into easy-to-use visuals. And that’s exactly what the heatmap analysis tool does for property investors. Basically, it is a map that shows neighborhoods with investment properties for sale based on the investor’s criteria.
Now, you are wondering how this piece of real estate technology could affect your decision-making process. Let’s say you want to find an investment property in the city of Austin that costs less than $150,000. With the heatmap tool, you can find neighborhoods with investment properties with the listing price that fits your budget! They’ll be color-coded. Like for Austin, those locations are in the orange to the red range (pictured above).
You can also perform your search based on the cash on cash return, rental income, and occupancy rate (each for the individual rental strategies). That way, you can compare different neighborhoods to see which one will give you the most profitable real estate for sale in your budget.
When it comes to its advantages, simplicity might be one of the greatest. This makes it the perfect piece of technology for beginner real estate investors. Moreover, it is cost friendly as well as at the reach of your hand!
Learn more about this amazing tool by reading Expert’s Guide on Finding Income Properties Using a Heatmap.
#2: Property Finder Tool:
Finding real estate properties for sale is no longer a hassle like it used to be back in the day. Therefore, allow us to tell you about one piece of outstanding real estate technology: the property finder tool.
Just as the name suggests, this tool is specially designed to find you not good, but the best real estate investments in the market. You won’t even have to do much to find properties for sale. The only criteria you’ll need to specify is your desired location. But you should also use filters such as your budget, the rental strategy of choice, property type and even the number of bedrooms/bathrooms to find the best investment property for you.
Then this tool will use algorithms in addition to reliable real estate data to find you the best available properties out there. What’s more interesting about this tool is its ability to scan multiple real estate markets at once saving you time, energy, and resources.
If you are interested in reading more about this tool, here are a couple of articles that will definitely help you out:
#3: Predictive Analytics:
To mitigate the risks of real estate investing, an investor must pay attention to the housing market forecast. In the US housing market 2019, there is no better way to do that than by using predictive analytics.
In essence, any tool that uses this kind of analytics processes huge amounts of historical real estate data and uses that to predict future trends. Although the name of this real estate technology suggests that it’s predictive, it doesn’t predict the future per se. Still, it is way more reliable than the traditional ways of predicting market trends.
The advantages of tools that use predictive analytics (like the ones on this list!) reach different areas and aspects of the business. First, it helps you determine the optimal rental strategy for your business. Second, it will help you spot the investment properties for sale with the highest potential based on given trends. Third, it will help you learn more about the type of tenants looking for housing in certain areas.
We won’t leave you hanging there. Here is a resource to help you better understand this powerful real estate technology: The Use of Predictive Analytics in Real Estate Investing.
#4: Investment Property Analysis Tools:
The investment property search does not end with finding a property that looks like a good option to go with. Rather, you must take it a step further by performing a thorough analysis of the location and the property itself. You will need to analyze the following:
- Cap rate which is the net operating income divided by the total property value.
- Cash on cash return which is the net operating income divided by the amount of cash you’ve invested. This excludes any external financing sources.
- The potential for positive cash flow which is your profit from the rental income.
- Real estate comps which are properties similar to yours within the same location. You will need these to compare your investment property with. This helps you make sure you pay the right amount of money for your investment property and helps you determine a proper rental rate.
Looking at the previous measures, it seems like a handful of tasks to accomplish with a mere spreadsheet. But, we’ve got your back with this one. In fact, there are two tools that you could use depending on your rental strategy:
- The investment property calculator: This real estate technology is the perfect choice for long term real estate investments. It is specially designed to find you the best traditional rentals with the highest earning potential.
- The Airbnb profitability calculator: This real estate technology is perfect for short term rentals. You can spot a profitable location and a lucrative deal in no time.
Want to get your hands on all of these tools in one place? Click here.