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.

It's important to understand how the current property industry generally works and why this has persisted for so long. Then you can compare this with how portfolio landlords buy properties and how you should be doing the same.

If you’ve ever bought your own home before, you’ll know just what an emotional purchase this can be. Walking into a building and already mentally overlaying where you’d put furniture as well as checking in to see how you ‘feel’ about the place.

Whether it's a new build property or a 100-year-old house, estate agents and developers would have you believe that buying a house is all about your feelings.

The pristine feel of a house nobody has lived in before or the rustic charm of a building that has seen countless families add their homely touch to it. It all sounds so romantic right?

The truth is that emotions cause people to overspend, making agents and sellers more money and helping to push prices up which makes agents yet more money.

“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.

According to the Council of Mortgage Lenders, the United Kingdom has around 2.6 million private landlords with around 60% of them owning just 1 property. Many landlords own these properties through personal savings and equity rather than buy-to-let mortgages (BTL), with around 17% using inherited funds to purchase properties to earn some extra cash flow and grow equity for retirement in later life.

The majority of landlords are not purchasing based on shrewd data analysis and market research.

They’re buying properties close to where they live

They’re buying on streets and roads they know

buying based on an emotional attachment to an area

While some of this knowledge may help them filter out the troublesome areas in their hometown, it offers nothing more than anecdotal evidence that an area may be worthy of purchasing properties for their investment portfolio.

Considering most landlords are doing this to earn extra money, you’d think they’d want to maximise the financial potential of their investment. But due to the way we’re programmed to buy houses, this is far from the case.

Many landlords still walk into a property and analyse how they “feel”. Is it somewhere they’d happily live? Is it going to stress them out if they bought it and rented it out? Would they be happy to own it and make money from it?

Estate agents and even letting agents prey on the fact that emotional purchases will always make them more money and therefore push every button they can to make landlords invest in this “spacious and homely” property.

What if you could bypass the emotions and look solely at the data for the property, its location and its potential to make more money?

What if you could actually get a better deal on a property by negotiating with hard facts and undeniable statistics?

Wouldn’t that be smarter investing?

Thankfully for us, most landlords don’t do this. Opting for an easy life of finding local properties, managing the tenants themselves and sometimes even maintaining the properties too.

There are far too many landlords like this doing at best a mediocre job of looking after their tenants and maximising their financial potential.

Statistics show this to be true, with average net rental return as low as 3-5% and an average rental income per year of around £17,000. Most are just happy for a bit of extra income and a nest egg for when they retire. Many landlords don’t buy lots of properties and never look at the data to see if their investment is working optimally for them.

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.

By removing the emotions, you remove the tricks agents play to try and convince you to buy. You’ll immediately see the difference when doing this.

You’ll no longer be easily influenced into a deal that may not suit you. Now you’ll only look at the raw numbers and whether the deal “stacks” for you by keeping to your strict set of data-driven rules to find properties that work.

After centuries of buying properties with very little statistical evidence, it's finally time to utilise the tools available to you. More on the exact tools for the UK market later.

Every house, flat, bungalow and static home in the country has data you can make use of to do things like creating heat maps of areas that you should be investing in.

Not only that, but these data analysis tools can help you find properties that are below market value and in need of modernising, which can boost your financial potential too.

Do you think most landlords are doing this? Data analysis shows clear evidence that they are not.

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.

This for me is the big one. Simply put, when rental demand increases, house prices usually follow. There is a delay of 6-18 months for this to happen, which means it's an excellent signal of what's coming.

When investing in any market, they always say “get in early” and try to “time the market”. Both of these are not easy to do, but if there’s one data source that can help you, it's rental demand.

If demand has been high for a while and maybe shows signs the growth is starting to cool off, this can be an indication that housing prices may start to stall as well.

This is because it's not rental demand that’s pushing the housing prices up, it's merely showing the desirability of the area you’re looking at. People generally move to an area and rent before they settle down and buy properties, often moving because of work or a change of priorities in their life.

Generally speaking, when rental demand is on the up and house prices have yet to make a big move, the probability is high that they soon will (market corrections notwithstanding).

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.

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.

Another key indicator of the local market’s current state is turnover. How many properties are currently flowing through the estate agent’s books?

A high turnover would indicate properties are being sold quickly and potentially above the asking price.

A low turnover would suggest that the area is currently struggling with prices and / or demand.

Somewhere in the middle lies the sweet spot, showing a healthy throughput of property sales and the potential for some great deals to be found. In fact, one could argue that the sweet spot is a little higher towards the high turnover end, as this displays a current flurry of activity.

Couple this with the other data you’re collecting and you’ll see the bigger picture, with rental demand high, sales increasing and healthy yields to be gained in the area.

Many people overlook these datasets, but they can tell you so much about an area and its growth potential. People often just look at the shiny pennies rather than gaining a deeper understanding of the people they’ll actually have as tenants and neighbours.

There are numerous data points worth looking at here, so I’ll just list a few you might want to keep an eye out for.

Younger buyers and tenants tend to have more disposable income, buy or rent smaller properties (2 bed instead of 3) and will walk further to local amenities. Older buyers and tenants will seek parking spaces, closer amenities and larger properties.

An obvious one to understand here is how safe and secure a location is. This kind of data usually includes anti-social behaviour notices. While you may find cheap properties in these areas, you’ll also likely have a higher turnover of tenants and potentially more problems with neighbours.

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.

While not entirely scientific, voting preferences can tell you more about a population and their outlook on renting and property purchasing. Conservative majority areas tend to have more money and be older.

Labour majorities on the other hand often indicate more working-class, lower-income populations. These people tend to have different requirements and standards when it comes to renting properties, so you can purchase in areas that suit your property style and portfolio.

This may be an obvious one, but it’s often a metric that people misunderstand. For the millions of landlords and would-be landlords out there, price growth just means that an area is on the up. But understanding where in the repeating cycle of price growth and plateau an area is will give you greater purchasing power.

In most areas of the UK, prices have continued their march upward at a surprising rate, but drilling down into a specific area will give you much more insight into your next property purchase.

If used in tandem with the data points mentioned above, you can build up a greater picture of what's happening. For example, if the rental demand is increasing and the average income per household is on the up but prices seem to be on a plateau, it could be that this area is ripe for price growth in the not-too-distant future.

There are many other metrics you can utilise too, drilling down into the data much further to make an informed, fact-based choice when you strike your next property deal.

These data points are a great place to start and the tools you need to conduct your analysis will have this data ready for you to interpret. More on these below.

As the internet evolves and data mining systems get ever more complex, getting access to this wealth of information is as easy as signing up to a website.

Of course, there are some key elements a tool must have to prove useful.

Accurate data sources

The latest data available

Well-designed data interpretation

Tools to take action based on the data

Without these 4 things, you’ll struggle to make sense of the data and take confident decisions from what you’ve learned.

Consider these the four pillars of any good data analysis tool, as you’ll want to trust the information you’re receiving. Your future wealth depends on it!

There are numerous tools out there, but I want to talk about the big 3 so you can decide which one is right for you.

A relatively new player in the property data scene, this web service has extensive tools for drilling down into the data for a given postcode, giving you multiple data reports on one dashboard for a smarter overview of the current market situation.

Other online tools generally spread this information across multiple pages, making navigating and understanding the data less intuitive.

Ultimate Property Dashboard pulls everything together in one place, making it easier for you to make informed decisions.

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Visit ultimatepropertydashboard.com

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Data is gathered daily from multiple sources to ensure the information you view is as relevant as possible.

There are some fantastic extra tools to help you quickly see properties on the market and in the future off-market deals too. You can quickly see how potential properties stack and whether they are worth viewing.

A powerful extra tool is the ability to list properties you currently own, comparing them with the current market to see how they stack up with the competition. With your entire portfolio in one place and the latest market data at hand, you can see what potential equity release options you have to purchase more properties.

It’s still early days for Ultimate Property Dashboard and the site is sure to grow its features list and further evolve its usability too.

The daddy of online data for the UK housing market, Property Data has been around for a while now.

It’s quickly developed into a beast of a web service, pulling in data from a whole host of online sources to give you one of the most comprehensive overviews currently available.

With handy heat maps overlaying multiple data sources, the ability to generate reports based on customisable regions and the functionality to export the data too, there are lots of uses for exploring all the data points we’ve previously mentioned in this article.

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Visit propertydata.co.uk

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One of the most powerful tools here is the Chrome browser extension that can show extensive data for any property you find on the popular property search engine Rightmove. Just select a property and a sidebar will appear with rental yield %, average house prices in the area, average rental income and much more.

You can also view current on-market properties from Rightmove and Zoopla through its sourcing features, as well as highlight hard-to-sell properties that might be ripe for below-market value purchases to refurb, refinance and rent.

The only downsides we could find here were a few obvious gaps in the data once you drill down to very localised areas. This can lead to some guesswork, which isn’t ideal. But on the whole, the service is very comprehensive.

While the two tools above are great for people looking for on-market deals and localised overviews of the numbers, Nimbus is definitely more for the property entrepreneur.

If you have specific property types in mind, like HMO conversions or commercial-to-residential conversions, Nimbus can create opportunities few other tools and techniques could.

Let’s take HMOs for example (houses of multiple occupancy). Nimbus maps can quickly and easily show you which properties are licensed HMOs in a given area.

It can show you which of those properties has the potential for conversion and which are within an area that allows only a limited number of HMOs due to current density.

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Visit nimbusmaps.co.uk

](https://www.nimbusmaps.co.uk/)

This is an incredibly powerful feature which allows you to target specific HMO owners to see if they are willing to sell. When markets are turbulent and the wider economics of a country are unknown, it's usually a great time to find landlords looking to sell up and get out of the property business. So with a tool like Nimbus, you can negotiate those amazing off-market deals and convert properties to maximise their income potential and value.

It also includes handy overlays like UK Planning history, details on every property displayed, comparable reports and current on-market availability too.

All of this exclusive functionality comes at a price, with Nimbus being by far the most expensive of the 3 services. But its powerful tools can save you thousands in agent fees with direct-to-vendor deals and make you more money with useful data on uplift opportunities for the properties.

I’d recommend checking out all 3 of these services to see which is right for you.

They all offer slightly different services with different interfaces, so finding which one feels right is important.

Understanding how to make sense of the data so you can take action is vital.

With all this data flying around, it’s important to understand just what you’re looking at and where it all comes from.

Some of the data you see is raw numbers, straight from government and private sources, but a lot of what you see is interpreted and calculated to make it easier for you to understand.

It's also not live data. While feeds may be gathered daily, it doesn’t mean all of the data you’re reading includes the last week’s house sales and property information. In fact, some sources only update every 6 months or even 12 months in certain cases.

So there’s a degree of inaccuracy in almost every data source that you need to take into account when trusting in the numbers.

You can trust in the numbers too, as they are at least the very latest data sets available, meaning your competition (if they’re smart enough) are working with the same numbers as you.

So while some numbers may be cold hard facts, others are being run through algorithms to try and make them more useful for the data request you’re making today.

If some of the sources are only updated every few months, there’s a certain amount of forecasting built into the system to give you something useful to work with.

The same goes for any house sale data you may view. The sale may have actually gone through months ago, but it's only now been added to the source that the site is pulling from. This can affect the accuracy of turnover rates and monthly property values too.

There’s very little that can be done about this other than deeming the information “as accurate as it can be”.

The good thing is that most of the data you view is just part of the recipe which makes up the entire cake of property data. Your interpretation of all those signals is where you’ll make your own informed choices.

These tools don’t tell you what to do, they just arm you with the information you need to make a decision.

I recommend not making decisions based on one metric, as the data may not be as up-to-date as you might think. Instead, with multiple metrics working in tandem, you can be more confident that your decision is the right one.

In the property investment world, you often hear chatter of booming areas in the country. Every property magazine likes to talk about areas that helped make millionaires and are “the best place to invest this year”.

The truth of the matter is that if talk of a boom time for a city or town has gone mainstream, you’re already too late.

Sure, you could invest in this area and you might well make gains that other areas didn’t make.

But what's more likely to happen is that you’re joining the masses of amateur investors FOMO-ing in (Fear Of Missing Out) in that particular area when it's already reached close to its peak, at least for this cycle.

With the right data, you can find areas that are just starting to show signs of this boom. Areas that in the next 12-24 months will see much faster growth than the places which have already experienced this.

Finding those places can add much more value to your property, giving you increased equity, potentially higher rental price increases, better yields and more options to withdraw your initial investment and go again (known as BRRRR or Momentum investing).

If you just buy in the popular places, your property is much more likely to increase in value at a slower rate and cost you more (as you’re fighting the competition), offering lower yields and less equity. You’ll end up with less money gained from owning the property when you come to refinance or sell.

During times of correction, these popular locations are the first to get hit, with larger drops in value compared to those that are just starting to rise. Whether a market crash or correction is on its way is anyone’s guess, but protecting yourself with smarter property purchases will always make you larger sums of money over the long term.

After all this talk of data-driven property investment and smarter purchasing, we’re still left with the elephant in the room. We’ve been programmed for so many years to get emotional about houses.

So can really park your emotions at the door?

I’m willing to bet the answer is no, at least not entirely. After all, your financial success and desire for an easy life are emotional things. Not achieving them can be stressful and upsetting.

Data lends itself to systemisation and for me, it's all about systemising to reduce mistakes, costs and responsibilities. If you systemise correctly, you can be anywhere in the world and still build a successful property portfolio.

For this, you need data and systems in place to take action based on those data points.

Neither of these things requires any emotion. In fact, it’s hard to even apply emotions when you have systems in place to act upon data.

You can build systems that give you hard answers like:

Does the deal stack?

Does the rental yield meet my target?

Is there potential to add value to this property?

What are the numbers for exit strategies?

What’s the return on investment?

All of these questions can be answered with cold hard facts and figures. No need to feel happy or sad about them. If the property doesn’t meet your requirements, it's a no-go.

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.