What are the best real estate market analysis tools that are available to you If you’re new to real estate investing, one of the first aspects that you will need to learn about is the real estate market analysis.
The real estate market analysis will allow you to identify the best markets to invest in, as well as the best investment properties within each market for achieving your investment goals, and it can help you learn about the profits that you can expect from investing in each market or each investment property.
A real estate market analysis is a crucial step in your investment venture and based on its findings, you will have determined the level of profitability that you will achieve on your investment. For this reason, it is crucial to be able to conduct an accurate and reliable real estate market analysis.
Luckily, in our age, conducting a real estate market analysis has become much easier and more accessible to beginner real estate investors thanks to the emergence of very effective and reliable real estate market analysis tools.
This article aims to highlight the importance of a real estate market analysis and to showcase how each of the steps can be conducted using the real estate market analysis tools that are available to you while using Mashvisor’s real estate market analysis tools as an example.
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.
Real Estate Market Analysis
Before jumping into the list of real estate market analysis tools that are available to you, I will first explain what a real estate market analysis is, and what are the most important aspects of it.
A real estate market analysis, also known as a competitive or a comparative market analysis, is the process of comparing a number of different markets, or a number of investment properties within a market, to determine the optimal choice based on your investment strategy and goals.
There are a number of crucial steps to any real estate market analysis:
- Comparing the different markets
- Comparing the different properties within a market
- Comparing the historical data for each property/market
- Doing the calculations and analyzing the results
- Deciding on the best property/properties for investing
Below, I will give you a list of 5 real estate market analysis tools that can help you achieve each of these steps in order to find the perfect investment property for you.
Real Estate Market Analysis Tools – Heat Map Analysis
One of the best tools that are available to you and that can help you determine the best areas or neighborhoods within a market to invest in is the heat map tool.
The heat map is a very simple tool to use, and it is one of the easiest and quickest ways to gain insights into a market to determine the best areas within that market for investing.
Mashvisor’s Real Estate Market Analysis Tools: Heat Map
Mashvisor’s heat map tool allows you to get a visual indication of a market’s performance based on a number of different metrics or criteria:
- Property’s listing price
- Airbnb cash on cash return
- Traditional cash on cash return
- Airbnb cap rate
- Traditional cap rate
- Airbnb occupancy rate
Using these filters will activate a colored layer on the map which shows you the average performance, or how hot/cold each area is, based on the metric that you have selected.
This way, you can easily determine the best areas within a larger market to start your search.
Related: How to Find the Best Investment Property Using a Heatmap
Real Estate Market Analysis Tools – Property Comps
Property comps refer to comparing a number of investment properties to identify the ones that have the highest potential for returns based on their projected data.
This tool allows you to set a criteria for the investment properties that you’re interested in, such as the number of bedrooms/bathrooms, the listing price, the rental rates, or a number of other different stats.
Typically, this is something that you would have to do by hand; to list all the properties that meet your criteria, and to compare them one by one based on the different metrics and stats until you’ve found the one/s that are most suitable for you.
Related: How to Do an Investment Property Analysis
Using Mashvisor’s Export feature, you can do this faster and far more easily by downloading a list of all the properties that meet your search criteria in an easy-to-read Excel sheet format, which you can then use to sort the properties based on the metrics or stats that you are most concerned with in order to identify the best property to invest in.
Mashvisor’s Real Estate Market Analysis Tools: Property Comps
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Real Estate Market Analysis Tools – Neighborhood Comps
Similar to property comps, neighborhood comps allow you to compare a number of neighborhoods to identify the one/s that have the highest potential when it comes to real estate investing.
Using Mashvisor’s real estate market analysis tools, you can easily gain insights on each neighborhood to compare them and identify the one that has the highest potential.
Related: How to Do a Neighborhood Analysis in Real Estate
Mashvisor provides you with each neighborhood’s averages for stats and metrics such as the median property price, the median rental income, the average cap rates and cash on cash returns, the average occupancy rate, and even the optimal rental strategy to use in each neighborhood.
Mashvisor’s Real Estate Market Analysis Tools: Neighborhood Comps
Real Estate Market Analysis Tools – Historical Data
Another aspect that you should definitely consider when conducting a real estate market analysis is historical data.
Looking at an investment property’s or a neighborhood’s historical data can help you analyze that property or that neighborhood and get an idea of where it is headed, how its performance has improved or worsened in the past, and other insights that can be invaluable for your investment.
Mashvisor’s platform will provide you with the historical data for each property and each neighborhood, which can give you a quick idea of whether it is a good idea, a bad idea, or a brilliant idea to invest in a property or neighborhood based on its historical data and performance.
Mashvisor’s Real Estate Market Analysis Tools: Property Report
Real Estate Market Analysis Tools – Calculators
Finally, another important aspect of any real estate market analysis is to do all the necessary calculations for the metrics and stats that you will be using to analyze the market.
There is a great variety of digital calculators that real estate investors can use to calculate the different metrics, such as the cap rate or the cash on cash return, and each calculator is designed for a specific purpose and will provide you with data that you can use to analyze an investment property based on your metric of choice.
Mashvisor’s Airbnb calculator, for example, can be used to calculate the cap rate and the cash on cash return of an investment property to get an idea of that property’s projected returns, allowing you to know what amount of profits to expect from investing in each property and the different expenses or costs that you can reduce in order to achieve the level of returns that you are aiming for.
Mashvisor’s Real Estate Market Analysis Tools: Property Calculator
Bottom Line
No matter what type of real estate market analysis you’re trying to conduct, Mashvisor’s real estate market analysis tools will have you covered.
Mashvisor’s platform was designed to provide real estate investors with all the different tools and features that they need in order to conduct a real estate market analysis, and it can easily cut-down the amount of time needed to reach your conclusions from multiple months to only a few minutes.
To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.
Make sure to give Mashvisor a try and see if it’s the tool that you’ve been waiting for. Are we missing anything? Let us know by commenting on this article, or by contacting us at advisor@mashvisor.com.