A successful way of doing this is by using data systematically. Many successful rental real estate investors use the Automated Valuation Method to estimate current home values. Zillow calculates the “suggested price” of properties by creating algorithms. The good news is that you don’t have to be a real estate giant to leverage the data they offer to the public. You can use platforms like Trulia and Realtor to gather data like individual property histories and neighborhood trends. You can also find tools like mortgage payment calculators to make your number-crunching quicker and more accurate.
You can also use data to study foreclosure reports. You not only get information about property values or even individual houses, but you can also see market patterns from foreclosure reports. If a recent report shows a sudden increase in foreclosures, it could signal economic trouble in that area.
You can also use foreclosure reports for identifying growing markets you can invest in which could lead to accelerated appreciation as the market strengthens. However, you must bear in mind that foreclosure reports often show what happened in the past and not always the current market conditions. While this type of information is valuable, it might not be the best source of current market data.
Knowing that foreclosure reports have limitations, it is best to have varied sources in your data collection process. Along with government sources like the U.S. Census Bureau and U.S. Department of Labor, you should also keep a close eye on local newspapers, county registers, and similar data sources. When viewed alongside each other, these sources can give you a much bigger picture.
With all that data, you can narrow your search for specific areas or property types. If you don’t, you would be wasting your time looking for properties that will not rake in profits or are in declining markets.
With the information you can gather from websites, reports, the MLS, and local sources, identifying properties for further analysis can become more efficient. This strategic use of data as a tactical tool could advance your investing ventures the way bigger investors do it. After all of this, you would see how leveraging data can help you achieve even more.
If that all sounds too time-consuming, Real Property Management Republic can help you get started on your investment journey with our free market rent analysis. Contact us online or call us at 281-362-5001.