The world is full of data on any subject you care to mention. Statistical analysis should be the norm in almost any business, but for some reason the property industry seems to ignore data at every turn.

I’m here to tell you this is just plain stupid.

We all know knowledge is power, so gaining as much statistical knowledge as possible will help you make smarter and more financially powerful solutions.

So why isn’t everyone doing this? I’ll show you what people are doing wrong and what you can definitely do right to boost your income from property investments and create much larger returns in the long term too.

We’ll explore what data is most important when it comes to buying property and show you just how powerful a difference it can make.

The examples in this article are based on the United Kingdom’s housing market, but the knowledge here can easily be applied to almost any property market around the world.

So let's jump on in and see how using data to find properties can make you much more money.

How often do you hear the same old story?

“It was £15,000 over our budget but we just fell in love with it and had to live there!”

Or maybe “It's got so much potential to extend that it was still worth paying 20k over the asking price.”

This is all too common and it's easy to see why. What’s a few k extra for your dream home? In the long run, you’ll forget you ever spent it and your house will in all likelihood have increased in value.

You may be wondering what this has to do with the data analysis of property for business purposes. It actually has a lot to do with it.

How you can do better than most landlords

You can do much better than millions of landlords. You can use the power of data to easily jump ahead of them, buying better properties in better areas and making better returns.

There are many factors that a high percentage of landlords overlook. By making sure you do your research and make informed decisions based on real-world data, you’ll make your money go much further.

When your decisions are made with statistics not anecdotes, you free yourself up to a much wider pool of potential properties. If you’re only looking for properties close to you, then your options are severely limited.

Most landlords tend to buy emotionally and run their rental properties emotionally too. They end up paying too much, charging too little, getting stressed out when things go wrong and being unaware of the professionalism required to maximise their income. They baulk at the costs of letting agents and get annoyed by being charged admin fees and call-out costs just to fix a leaky tap.

What data to look out for!Image

here’s a huge amount of data out there from multiple sources.

The advent of large online portals like Rightmove, Zoopla and Zillo has not only brought a world of potential property deals directly to your browser, but it has also generated immense amounts of statistics that can be mined.

Couple this with publicly available data from government sources and you have a larger picture of how the property markets are performing, who’s buying and where’s growing the most.

Making sense of all this data is often the stumbling block for many landlords, but if you can get your head around this information, you can make much smarter decisions with your money.

There are some online tools that can help you make sense of the data, such as Ultimate Property Landlord and Property Data. These kinds of tools attempt to bring together the most important information and present it in a way you can digest more easily. More on this in a later chapter.

For now, let's take a look at some of the most important data sets you should be looking at to understand where to invest in. This is just a quick overview rather than a deep dive. I’ll leave that to the experts in those niches.

Rental yield for greater protection from fluctuations

There may be some areas where you’ve found properties you like and the rental income seems pretty good too.

The problem is, depending on the area you’re looking in, the numbers might only just stack in your favour.

When you take into consideration the potential for interest rate changes on your mortgage, rental demand changing in the long term and the cost of development and maintenance having an impact on your income, deals that seemed attractive suddenly don’t work at all.!Average ROI projected for 2022 - 2025

This is where strong rental yield comes in. With this data, you can create a larger income for yourself and a larger buffer for your operational finances. Every property you own will require maintenance and a potential refurbishment at the start or further down the line.

Having a higher yield can help cover those costs and make you more money. It also helps cover operational expenses like management companies and letting agents.

When prices change, which they inevitably will, you’ll have a greater ability to handle these fluctuations and remain in profit.

It's also an indication of a desirable investment opportunity, as you’re looking for deals that stack with high margins and lots of refinancing potential to extract your original investment and purchase more properties.

Rental yield isn’t the only signal to look out for, but it can definitely help you in the long run by making sure your properties are still an attractive, stress-free investment.

Other data points to analyse

Average household income

This is a great dataset that can not only show you what rental prices people can afford in an area, but also whether or not an area is becoming more affluent. Plotting this data over time will show you if money is flowing into a location, which is another handy indicator that prices may rise higher than in other areas in the near future.

Knowledge and confidence in your property investments

I find this the most rewarding aspect of data-driven property purchases. You’re reducing your fear and anxiety over finding the right property.

You’re also reducing the stress involved in property purchases and allowing yourself to prepare for multiple scenarios so that your property business can continue to grow.

None of this is possible without data.

To the millions of landlords that don’t use data to purchase property, good luck.

For the rest of us, luck is not a factor, smart investing with data is the answer.!How to get the right mindset for success