Real Estate Investment Data

What Is Real Estate Investment Data?

Defined as both a common asset class and as an alternative investment, people the world over recognize real estate investment as one of the best sources of wealth and financial security. This has likely been true since the dawn of time, but big data presents new opportunities for investment and risk management in this field.

Where Does Real Estate Investment Data Come From?

Government agencies like the Federal Housing Finance Agency provide data to almost all investors. Local government departments also provide important information, particularly the county recorder’s office. In fact, they may prove the most useful as they have property deeds, parcel, sales, and tax records about specific properties.

Other sources include real estate data providers like Zillow or Quantarium, which may also provide property valuation assessments or performance predictions.

Other data sources may include real estate investment trusts, or REITs. These platforms operate like mutual funds in that investors purchase shares in a trust that manages properties or mortgages. Since these are managed by professionals and often traded publicly, they offer detailed investment data on the properties or mortgages they manage.

What Types of Columns/Attributes Should I Expect When Working with This Data?

Since so many factors influence the current and projected value of properties, the number of data attributes is large. In addition, the type of data recorded also depends on the property type: agricultural land must account for soil fertility, for example. However, the most common real estate investment data uses property ownership, features, and parcel data and local real estate market data to measure the current and potential value of the property.

Additional data attributes that impact property valuations and investment decisions come from both open and paid sources. These include climate, economic, and geospatial data. The better data providers also offer points of interest dispersion and points of interest quality measures.

Other important data attributes include area crime rate and even politics. For example, several counties in the US issued eviction moratoriums during mandatory COVID-19 lockdowns; these regulations likely only occurred under specific local political conditions.

Once data providers or investors have gathered these various sources, they can run metrics to gauge investment return rate. These include cap rate (compares the return potential of properties), cash on cash return rate (used by investors who finance their investments with mortgages), or rental occupancy rate.

What Is Real Estate Investment Data Used For?

For both individuals and large corporations, with fewer risks than other investment classes. Additionally, most risks can be mitigated or managed with good data, a diverse portfolio, and renter credit checks.

However, real estate investment is more than just an income source, or even a property management or development career. They are also investments in a family’s future, parents’ dreams to leave their children good homes in the future.

How Should I Test the Quality of This Data?

The most important tests of quality real estate investment data are accuracy and timeliness. Investors must ensure that their data sources provide the most up-to-date data possible.

Investors must also ensure the contractors and assessors they hire to fix, improve, or assess properties have quality reputations. Mistakes in initial assessments or valuations can cost more than the property may bring in.

Interesting Case Studies and Blogs to Look Into

Mashvisor: Market Reports
MSCI: COVID-19 and Real Estate: The Devil Is in the Dispersion

Tangible Examples of Impact

The surprise to date has been how few bankruptcies have occurred in commercial real estate. … The Federal Reserve flagged commercial real estate as a trouble spot in February in its semiannual Monetary Policy Report to Congress. It said prices “appear susceptible to sharp declines” from historically high levels, which would be more likely to happen if the pace of distressed sales picks up or if the pandemic leads to longer-term declines in demand.

Bloomberg: Distressed Commercial Real Estate Is Still Sitting in Purgatory