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Real Estate Data Sources To Inform Investments

Real-Estate-Data-Sources-to-Inform-Investments

It’s remarkable how modern technology at our disposal has made information that was the domain of niche professionals like real estate agents and wholesalers completely public with detailed how-to guides highlighting every critical aspect of the process. This has given so many novices looking to make their way into real estate an excellent opportunity to learn on the fly and apply their knowledge to their own business. 

For many people just starting in real estate, the media informs their decisions. Media that says that the economy is strong and what better time to invest in real estate than now, with interest rates at an all-time low and renters growing exponentially? This is enough to entice an amateur investor to dive in headfirst. 

The media doesn’t tell you that these real estate markets are more complex than just a few hunches and good old gut feelings about the economy. There is actual data involved that shapes the terrain of real estate. Real estate is a highly hyper-local business in nature. The strength of real estate markets varies from city to city, state to state, and in some cases, it even differs from block to block! 

Real estate is a market, and like any other market, it is an imperfect market. No two people have access to the same data, and it’s not because of the availability of data; it’s about those people knowing where to look. Sometimes, investors have insights about particular properties that won’t be found online. Like, say, an investor wants to sell his portfolio because he’s about to retire. Someone in the vicinity of that investor might know this before the news ever hits the media and may close in on the seller before the seller has put up the place on any listing. 

However, advances in data technology are leveling the playing field for newcomers and adroit professionals alike by introducing granular-level data into the mix. Now it’s about who can access the data better. 

There are four kinds of data we’re talking about. Let’s discuss them in detail.

Foreclosure Data Reports

Real estate isn’t like cryptocurrency or other liquid assets. It cannot be traded in a single click. It’s a slow-moving business that takes time for properties to move. Foreclosure data reports let you know when a market has experienced a downturn. When there’s a rise in foreclosures, that’s when you know that the market is down. When the sales increase, days on the market increase, and prices decline, that’s when you know that the foreclosure activity will rise. An investor can use this information and buy real estate at a fraction of the price when buying properties out of foreclosure.

Sales Data Reports

Comparable data is the data of nearby properties that have recently been sold. Most investors look at this data before buying or selling a property to make an accurate guess. However, sales data is even more informative because it’s one of the first signs that a market is softening (i.e., if the number of sales is declining, that means the market is softening). Sales data has to be evaluated in terms of the volumes of sales and the prices of those sales. This is necessary to discover which direction the market is going in.

Data Reports on House Flipping

From analyzing how many homes are being flipped to learning how saturated the market is with home flippers, data reports on home flipping can let you understand which markets have the most potential for gross yields. A gross yield is a yield on an investment before taxes, and other expenses are deduced. Comparing the data will give you an idea of whether the market is headed up or down. Real estate is a cyclical business, and if you want to be in this business, you need to know how much steam is left in the current market cycle. House flipping reports are an excellent metric for that.

Gross Yield Data Reports

Whether you’re a house flipper or a buy-and-hold investor, gross yield data can indicate the market’s direction; rising gross yields mean there’s a high demand for rehabbed homes and are in good condition. 

Strong yields mean that it’s the ripe time for you to liquidate. It means that the market has high demand, which means that if you intend to buy and hold, now’s a good time to get in. It’s also a sign of gentrification, which means a faster appreciation of houses in the area for an investor.

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Austin Proctor

Austin Proctor

Technical Writing Manager @ BatchData

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