Getting Started with Real Estate Market Analysis
A real estate market analysis is usually done using deterministic financial projections. These help predict the outcome of your investments using market anticipation of the future value of the property with its rental revenues and based on your decision to buy at a specific price. For example, you purchase a property at $500,000 with a rental revenue of $35,000 annually. If we assume that the property is increasing at 2% annually and that the rent increase at a steady 1% annually then we would predict that in 10 years the property would be valued at $609,500 with an annual rental revenue of $38,660.
Typical market analyses use deterministic financial projections that rely on assumptions in order to predict accurately. Those assumptions drive the accuracy of your market analysis when dealing with real estate investments, and they include:
- Property appreciation rate
- Property Maintenance and Management Rate
- Rental Appreciate Rate
- Vacancy Rate
It is important to take the time to gather the data required to fully understand the subject property’s market and area while intelligently attributing values to these assumptions. The quality of the market analysis can make a critical difference in your decision whether or not a property is a feasible, profitable investment.
With www.worthitlabs.com, these assumptions have been determined using complex statistical models performed by actuaries and real estate experts. Using this platform, you are able to evaluate your property without worrying about the market analysis and its financial projections as it has been performed for you. The Worth It Labs analysis takes into account your style as an investor as well as your perception of the property to give you personalized metrics that tell you if a certain investment property is viable.
Your real estate investment is probably one of the biggest investments you’ll make and it’s important to validate your decision before you go forward with the investment.
Head over to worthitlabs.com today to get your analysis or send it to someone you know that’s looking to buy an investment property!
