Anyone heard of Investability?

Question

Has anyone used or heard of Investability.com?

It is a site used to search for investment properties and analyze if it is a good deal. It will show you cap rate, cash flow, etc. Just wondering if anyone has used it and found it helpful.

www.investability.com

Thanks

Robert Schroder · Answer

Hi Daria,

The Rental AVM used on Investability is derived from comparable rents on homes with similar square footage, bedroom and bathroom counts in the area.  The RentRange banner on the property detail page will tell you the number of compatibles and the radius in which those were found that were used to estimate the rental income potential.  It is a means to estimate the rental potential of a property assuming an average level of condition.  The AVM does not take the condition of a specific property into account, nor does it consider any specific variations in tenant / landlord responsibilities that may be delineated in a lease.

The AVM we provide is a great starting point to evaluate a large number of properties in diverse areas quickly to find a few properties that may suit your investment objectives.  It should not be considered to be an absolute number of what should be charged for rent on a property without an inspection. If a property is in average condition though, it is an excellent baseline for the rental income potential.

Other expenses can come from several sources, such as the listing feed, from county records data, or based on an average in an area. But regardless of where these numbers come from they can all be changed to reflect what you know about expenses for a given property or about costs in an area.

I hope this help.  Thanks.

Account Closed · Answer

OMG!  At least they call it an estimated cap rate per year.   Any outfit that is trying to sell you a SFR based on a crap rate, (their NOI/their asking price) is either dumber than dirt or crooks.  For fun, ask them for a couple of cap rate comps of properties they were not involved with.

Daria B. · Answer

@Robert Schroder

Thanks for answering.

I looked at several properties in the same area and the specific property I know was rented at a certain amount, there is no mortgage and the expenses I'm not completely sure of with the exception of tenants responsibility for lawn. The condition of the property shows there isn't anything being spent by the owner. It's a student rental and typical expenses such as lawn was not responsibility of the owner.

I'm just wondering where these numbers are coming from that are posted on the web site.

I guess this line "rental income potential" says it all in that it is assumed because of the collected data that this property could potentially command what is being posted on the site. Although, the condition of the property itself will not bring in the amount posted and that has to be taken into account as well.

I'm still not sure how these numbers are generated without  knowing the condition but just using a presumed number of other data points, while they may be valid, the condition would also most certainly dictate the rent. I've seen it up close and personal from my own properties that one change to add that value can command higher rents.

When I say presumed, "numerous other industry professionals as a standard for evaluating the rental income potential of a property", it' based on this statement. Numerous other industry professionals.....what is actually being brought into scope to determine these numbers.

Thank you for contributing.

Robert Schroder · Answer

Hi Daria,

I'm answering for Eric Workman.  We use Rentrange's rental AVM to calculate the financial performance of the properties on Investability.  Rentrange's Rental AMV model is used by banks, lenders, rating companies, and numerous other industry professionals as a standard for evaluating the rental income potential of a property.  However a number of factors could affect the cash flow of a property on Investability.  For example because the cash flow is calculated as the total income minus the total expenses including the mortgage, entering a high down payment on a property could show a large cash flow.

Without knowing the specific property and search parameters used, I cannot answer why the cash flow would be higher for a property than you think it should be.

Greg Rand · Answer

The yields on Investability are the most accurate of any automated system because the rents are estimated based on RentRange's rental AVM, and expenses based on industry data. If the numbers are off, you can change them and it recalculates. There is no substitute for human intelligence, but Investability beats the heck out of using a home buyer site to search for investment opportunities. I've sourced thousands of SFR investment for REITs and Investability is pretty accurate most of the time. When I know better, I change the assumptions.

Daria B. · Answer

@Eric Workman

Can you explain where you get this information from on your web site? This is your site, isn't it?

I looked up a property that has a cash flow out of this world and I know the property does not cash flow what is reported on this web site.

Anyone heard of Investability?

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