INVESTimate®

Discover the investment value of any residential property

What is INVESTimate®?
INVESTimate® is a tool that helps you determine the investment potential of a residential property using machine learning and AI. INVESTimate® is powered by big data on 110 million homes, institutional-quality research and on-the-ground experts with deep insight on local real estate market conditions. INVESTimate® covers approximately 85% of all residential properties in the US.

How Do We Determine a Property's Investment Value?

Three factors determine a property’s investment value: Its price, rent, and operating expenses. To that end, HomeUnion® created Price, Rent and Expense Estimate automated valuation models (AVMs) to predict these values. Our AVMs provide you with an accurate assessment of the earning potential of a property as an investment.INVESTimate® determines a property’s gross yield using the Price and Rent Estimates, while the net yield is calculated using our Expense Estimate. INVESTimate® is a starting point for residential property valuations, and should not be considered an appraisal.

INVESTimate®
/in•vest•tuh•meyt/
noun
  1. By estimating the price and rent on the property
  2. By estimating expenses that may be incurred in managing the property as an investment
  3. By estimating the price and rent growth of the property
INVESTimate®/in•vest•tuh•meyt/noun

3 Key Metrics Determine the INVESTimate®

HomeUnion® Price Estimate

Price Estimate determines the market value of any home in the United States. The following features are used to analyze and calculate Price Estimate:

  • Property characteristics
  • Current sales comps
  • Market conditions and trends such as unemployment, income, crime, and school rankings
  • Tax assessments and other tax records
  • Previous valuations and historical home price data
  • Neighborhood quality

HomeUnion® uses over 15,000 geographically-varying models to predict prices for 110 million properties nationwide

Measure of Accuracy

Price Estimate

To assess how well the price estimate models perform, we compare all recent sales (within the past year) and determine the number of predicted estimates that are off within ±10%, ±20% from the actual sale price. For an overall performance of the model at state, county, city, and zip code levels, we measure Median Absolute Percentage Error (MAPE). To account for over-prediction or under-prediction in a location, we measure Median Percentage Error (MPE).

Nation wide Price estimate Accuracy

3.28%
0.0194%
MAPE
MPE
% of Properties with Price estimate
59%
Within ±5%
83%
Within ±10%
93.5%
Within ±20%
(Updated Dec. 2017)

* Nationally, HomeUnion® over-predicts property values by 0.0194%.

Price Estimate Star Rating

HomeUnion® determines a property’s price based on big data for 110 million properties nationwide.

Best
Great
Good
Fair
Insufficient Data
STATE/US
STAR RATINGSTARS
NUMBER OF PROPERTIESNO. PROP
SOLD SAMPLE SIZESAMPLE SIZE
±5%
±10%
±20%
US
112,568,864
569,111
83.02%
83.02%
93.46%
AK
254,704
1,155
54.20%
54.20%
83.29%
AL
2,077,596
6,420
81.60%
81.60%
92.55%
AR
1,251,922
4,296
81.19%
81.19%
91.13%
AZ
2,296,123
20,529
94.01%
94.01%
97.87%
CA
10,119,798
60,576
89.65%
89.65%
96.36%
CO
1,960,722
18,190
92.26%
92.26%
97.19%
CT
1,138,870
4,240
85.17%
85.17%
93.89%
DC
154,115
1,187
84.16%
84.16%
94.61%
DE
374,277
1,120
83.13%
83.13%
94.11%
FL
7,697,689
53,552
89.16%
89.16%
96.34%
GA
3,845,076
20,539
88.31%
88.31%
95.26%

HomeUnion® Rent Estimate

Market-rate rents on 110 million properties are used to create Rent Estimate. Rent plays an integral role in real estate investing. A healthy yield is dependent on establishing an accurate rent for an investment property. The Rent Estimate uses the following features to predict rent:

  • Property characteristics
  • Geographic features like a property’s location and distance from points of interest
  • Market conditions and trends, such as unemployment, income, crime, and school rankings
  • Neighborhood quality
  • Historical rent trends

HomeUnion® has more than 7,500 neighborhood-level models that predict rent for more than 110 million properties nationally

Measure of Accuracy

RENT ESTIMATE

At HomeUnion®, we compare all the recent leased rents (within the past year) and determine the number of predictions that are off within ±10%, ±20% from the actual rents. For an overall performance of the model at state, county, city, and zip code levels, we measure Median Absolute Percentage Error (MAPE). To understand over-prediction or under-prediction of rent in a location, we measure Median Percentage Error (MPE).

Nation wide Rent estimate Accuracy

4.00%
1.60%
MAPE
MPE
% of Properties with Rent Estimate
57%
Within ±5%
80%
Within ±10%
93%
Within ±20%
(Updated Dec 2017)

* Nationwide, we overestimate rent by 1.60 percent.

Rent Estimate Star Rating

Best
Great
Good
Fair
Insufficient Data
MARKET
STAR RATINGSTARS
NUMBER OF PROPERTIESNO. PROP
RENT AVM MAPERENT MAPE
±5%
±10%
±20%
National (incl. Overall RETS feed areas)
114,256,978
4%
80%
80%
93%
Abilene, TX
56,703
8%
54%
54%
69%
Akron, OH
249,957
4%
76%
76%
90%
Atlanta-Sandy Springs-Roswell, GA
1,918,492
5%
76%
76%
92%
Austin-Round Rock, TX
622,828
5%
72%
72%
85%
Birmingham-Hoover, AL
405,558
5%
78%
78%
94%
Canton-Massillon, OH
163,731
4%
77%
77%
90%
Charlotte-Concord-Gastonia, NC-SC
898,886
4%
83%
83%
95%
Chicago-Naperville-Elgin, IL-IN-WI
3,044,490
4%
77%
77%
92%
Cleveland-Elyria, OH
725,484
4%
81%
81%
93%
Columbus, OH
688,615
4%
78%
78%
92%
Dallas-Fort Worth-Arlington, TX
2,044,072
4%
86%
86%
95%

HomeUnion® Expense Estimate

Expense Estimate is created by predicting a property’s operating expenses. Expense Estimate takes into account a variety of factors based on the age and physical condition of a property. We derive expenses based on:

  • Tax expense models
  • Insurance expenses
  • Property management expenses
  • Property maintenance expenses
  • Vacancy estimates

An important note on estimates:

INVESTimate® should be used to determine the investment potential of a property, and should not be used to determine the actual investment performance of the rental asset.

Listed below are some of the reasons why the accuracy may be low in price and rent estimates:

Not enough data: The estimate calculation requires the surrounding recent sale or rental records to be similar to the property being estimated. If there are not enough comparables, the model falls short at a granular level and has no choice but to revert to a larger geography. This can lead to more comparables, however, they may be more dissimilar to a property, and so the estimate becomes inaccurate.

Incorrect data: Much of the information received is from public records, so the data may have been entered incorrectly at the source.

Missing data: Some of the important facts about house (e.g. bedrooms, bathrooms, square footage, year built) may not be available from the source.

The property INVESTtimate is derived from HomeUnion®’s estimated market price (Price estimate), rent (Rent estimate) and expenses (Expense estimate). INVESTimate® is calculated for about 110 million homes nationwide. It can be a preliminary reference in determining the investment potential of a home and is not an official appraisal or investment commitment. The INVESTimate® is auto computed based on millions of data points focusing on special parameters, location, market growth, employment, rentability and so on.

HomeUnion® also produces the INVESTimate® forecast, which is HomeUnion®’s 1-year prediction of a property’s price and rent on historical data. In some areas, we may not be able to produce an INVESTimate® at all. The INVESTimate®’s accuracy varies by the availability of data in a neighborhood and market.

* It is important to note that the Price Estimate is the starting point for residential property valuations, and should not be considered an appraisal. It is difficult to assess a property’s valuation without conducting a physical inspection or methodical appraisal of the asset.

* It is important to note that the Rent Estimate is starting point for assessing market-rate SFR rents, and should not be used to determine lease values.