HomeUnion®’s INVESTimate® is an all-in-one website that allows investors to evaluate any single-family residential (SFR) property in the U.S. through an investment lens. INVESTimate® predicts a property’s value as an investment by estimating three factors: its price, rent, and operating expenses.
With the launch of INVESTimate®, HomeUnion® is the only website that forecasts the performance of a residential property. After entering the address of a house, a consumer views comprehensive information on that property, including yields, appreciation and total returns. HomeUnion®’s INVESTimate® also displays details about the physical characteristics of each property, surrounding neighborhoods, historic price and rent trends, sales comps and other information.
This is what it looks like when you start your journey to find the potential value of an investment property using INVESTimate®:
INVESTimate® Fills a Void for Rental Housing Providers
Residential real estate investors have often been characterized as opportunistic capitalists feeding on financial crises. Profiting from someone else’s problems never makes for good headlines. But in truth, these investors have helped absorb a fair amount of distressed residential inventory over the years. In fact, they have provided residences to quality renters who have eschewed owning a home for their own personal reasons, or because of affordability issues. In the process, their real estate investment activity has accounted for roughly 20 percent of overall home sales in the U.S, or an average of 1.2 million home sales per year.
Although real estate investors control a significant portion of the market, they did not have access to a comprehensive website that helps them make decisions on their acquisitions. Instead, other real estate portals are primarily focused on displaying listings and other information to homeowners and renters.
INVESTimate® Disrupts Real Estate Investing
There has never been a place for real estate investors to find in-depth information on investment real estate price forecasts and local market information – until now. HomeUnion®’s INVESTimate® has filled this void. INVESTimate® is powered by a real estate operator that helps you make investment decisions based on data science and research, HomeUnion®. INVESTimate® addresses many the questions real estate investors have when evaluating a property for investment, including:
- What should the price of this property be?
- What should rent for this property be?
- What are the expected expenses and vacancy rates during the ownership period?
Other websites ignore one critical element of investing in real estate: expenses and their impact on the accurately pricing a property. Expenses included in HomeUnion®’s INVESTimate® are insurance premiums, taxes, and ongoing repair and maintenance. All of these critical factors impact the returns produced by an investment property. Consider this fact: Taxes for investment housing differ significantly from taxes on owner-occupied homes. These variations alter each property’s investment performance depending upon its location. To address this issue, we have built a tax database.
Calculating Returns Sets INVESTimate® Apart
Another key differentiator is INVESTimate®’s ability to estimate returns over a period of up to 15 years. Three components are used to factor expected returns: Price Estimate, Rent Estimate and Expense Estimate. The expected rent, minus the expected expenses, is the calculation utilized to determine the net yield of the investment. Forecasts for the appreciation of the property get factored into the total return. HomeUnion®’s models have been built using big data: We have evaluated data on over 110 million properties, and 200,000 neighborhoods over the past 17 years to build our models.
Local Market Expertise Validates INVESTimate®
Since real estate is hyperlocal, big data must be supplemented by local, on-the-ground market experience. HomeUnion® does this by using data from the investment properties that we manage in 10 states.
The data science powering INVESTimate® allows us to build big data based on financial models using AI/machine learning. Simultaneously, local operations help us validate these models. INVESTimate® can be a good starting point for investors who are looking to diversify into residential real estate. They can quickly evaluate areas, neighborhoods and specific homes based upon budget, returns and a number of other factors.
A little more intelligence goes a long way in keeping your investment dollars safe.