Rental Property Investor · HOUSTON, TX - Texas · Member since 2017 · 93 posts · 19 votes
Hi everyone,
I have been using the ARV calculator at REIkit.com to calculate ARV on potential deals.My question is anyone familiar with the tool and how reliable are the numbers generated? Is there a percentage margin of error for this tool? And are the alternatives to the tool?
@Ayo O. Cool tool. Haven't seen it before. I ran it through a known property, estimate came out high. But even if it didn't I wouldn't trust it. While it may (or may not) pick correct comps as far as square footage, beds, and baths, I doubt it knows neighborhoods--sometime just crossing the street makes a huge difference--or condition. It can be a start, though. Look at the houses and neighborhoods yourself.
The numbers in the tool are as reliable as the data chosen to perform the analysis, and that is up to you, not the software.
The tool currently uses Zillow data to suggest a number of comps for you, however you still have do the work of verifying their suitability for your analysis. This is a far better experience than if I were to just give you a blank slate with no suggestions.
Addressing your trust comment, if you don't trust it, it's because you don't trust the data that you selected or input into the software. At all times you are in control of what data you use to come up with the valuation, and it is just a tool for you to perform a sales comparison analysis. All of the data is shown right in front of you, and you have to apply your own heuristics for selecting the appropriate comps including their age, distance from the subject, counts of rooms, size within of each other, lot sizes, etc.
We can discuss all day long about how good or bad Zillow data is, and honestly, it depends very much on the market, and how quickly a sale gets reflected in the public record.In my SoCal market, it's actually pretty quickly, and I often end up using a blend of suggested comps from Zillow and my own comps that I import from other places such as Redfin, your free MLS alternative.
The tool gives you the ability to add your own comps, to perform your analysis. There's a video above the tool that talks exactly about how that's accomplished with using Redfin. Paid customers also have the ability to import a CSV of comps from any other source such as Redfin or their MLS of their choice to perform that sales comparison analysis. There's a blog post of that feature on my site.
What the tool is not, is an automated valuation like the Zestimate or Redfin estimate, so when used as such, your mileage will vary. What it IS, is the easiest way for you to perform a sales comparison analysis, and I use it every day in my business.
One other thing I want to add, is that if there's other software out there that claims to give you MLS comps from Zillow. As no such thing exists, you should definitely not trust those numbers....
Let me know if I addressed your questions, or if I can help clarify anything else.