Businesses, non-profit organizations, and government institutions all across the country are using analytics to identify problems and solve them quickly. Businesses might use analytics to predict whether the time is right to launch a certain product. Governments use analytics to see if a policy was a success or failure. Even sports team use analytics; baseball games are now awash in analytical numbers, as teams use statistical information to decide on hitting rotation and defensive alignments.
Individual homeowners can use business analytics too. By using scores of data organized in the right way, you can make better decisions for your home purchases.
Analytical Reporting: Enhancing Your Real Estate Decisions
What is Analytical Reporting?
First, let’s make sure we understand analytical reporting. This is simply the practice of looking at data to help make decisions. Offering both information and, in some cases, analysis of the data, analytical reports allow for quicker, easier decisions and a better understanding of operational or business practices.
They can also help to visualize data. For example, a pie chart can help business executives better understand the percentage of revenue that comes from a specific division of the company.
It’s important to note that analytical reporting does not make a choice for you. On the contrary, it is simply used to guide a decision. Like a map that shows different routes, the ultimate decision is yours. Analytical reporting simply helps with the decision process.
There are many uses for analytical reporting, but it’s often seen as a tool for large, wealthy organizations with a ready supply of resources. Branches of the federal government, Fortune 500 companies, and Major League Baseball teams use analytics. But not everyday, moderate-income homeowners and real-estate investors…right?
As we’ll show, analytical reporting can be used by virtually any homebuyer to make a better choice.
How is it Applied to Real Estate and Mortgages?
Analytical information can help you make a better choice by providing information on various situations, including…
Rent vs Buy
There is a constant debate between the benefits of renting a property versus actually owning your own home. The truth of the matter is that everyone’s situation is different, and only an analysis of your personal position, including income, future goals, and debt obligations, can actually create an answer. With analytical reporting, you can see how much it will cost to begin owning a home, as well as how much you might save over the years and decades. However, it can also show the cost of renting, as well as the potential short-term savings that come with avoiding home repairs and other issues.
No prediction about the future is 100% guaranteed accurate, but one of the virtual certainties is that property values will go up. How much they will go up, however, is less certain. Using analytical reports, you can get a better idea of how much your property may gain in value.
Analyzing a Neighborhood
Perhaps you want to know if a certain neighborhood is right for you. In this case, analytics can once again be used to guide a choice. Analytics can be used to analyze crime rates in a certain neighborhood or to find information on property appreciation on one side of a street versus another. If you want to know, for example, how appreciation compares in one suburb versus another, analytical reporting can provide the information you want.
Broad Property Comparisons
Another option for using analytical reporting is to compare properties. You can use a variety of data points to help guide your decision, and these can be as simple as basic prices or as complex as the predicted growth in value per square foot. No matter what specific data you want to utilize, having the ability to compare properties can make a decision much easier and more reliable, while making you more confident in your final choice.
Consumer Debt Analysis
With the right analytical reports, you can also analyze the potential debt that will come from using a specific property with a specific loan. For example, you can look at buying both House A and House B with a conventional loan, then look at the data for purchasing House A and House B with a USDA loan. By analyzing the potential debt, you become a far more informed consumer.
Rental Property Cash Flow Analysis
Another option for your analytics is to analyze the flow of cash that will be generated by a rental property. This can include not just the monthly rent checks, but the numbers can be modified to take into account your mortgage payments, giving you a clear picture on your potential earnings. The numbers can also be adjusted to include potential costs of ownership, such as maintenance and repair cost or the costs that go to a rental-property management company.
When Analytical Reporting Falls Short
While analytical reporting can give you a wide variety of information, there are certain variable it can’t gauge. In general, these come down to preferences, which are extremely difficult to quantify. For example, if you are using analytics to compare renting vs. owning, hard data can’t measure your disdain home maintenance, which is often avoided when you rent. Neither can it measure the personal pride you get from caring for your own property; these are personal factors that will play in your decision, and neither can be measured with hard numbers.
Remember that analytical reporting is a tool, not an advisor. It can’t make the decision for you, but it can help you measure and compare some of the most important factors in your decision. Sometimes, simply seeing the numbers in an organized, clear fashion is enough to help you along.
Work with a Lender Who Provides Excellent Analytical Reporting
If you want to find out how analytical reporting can enhance your real estate purchase, contact our staff today. We offer a variety of reports that help you make an informed decision, allowing you to make the best possible choice.
You don’t need someone to make the choice for you, you simply need someone to show you the right information. That’s what you’ll get when you work with our dedicated staff, so contact us today!
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