Why Statistics Are Not A Good Evaluator Of Real Estate

Why Statistics Are Not A Good Evaluator Of Real Estate

Recently RealtyTrac did their usual evaluation of zip codes to see the best place to flip real estate.  While numbers are hard to argue with they certainly don’t tell the whole story, which is Why Statistics Are Not A Good Evaluator Of Real Estate (or possibly the only good evaluator). 

RealtyTrac offers a great look at the data and sure there are some great opportunities to be had but it’s missing the story and that my friends can be fatal.  For example, if you bought a home for $10K and then sold it for $110K, you’d have a 1000% profit.  With this example you can see why numbers can lie.  RealtyTrac’s numbers tells us that Stone Mountain and Decatur are up and coming and great places to flip.  This is a true. Properties that are good flips in Stone Mountain are not good “homes” but rather great rental properties.  So the numbers may tell you one thing but the strategy needs to be different in each area.   This is why you should be part of a community like Bigger Pockets.  The key reason?  Today information isn’t power, interpretation is. 

 Today information isn’t power, interpretation is.  {Click To Tweet}

This is not only true for a generation but for real estate as well.  Stats are great but they won’t tell you why taking potentially less profit in Lawrenceville for example might make more sense since it mitigates the risk.  Perhaps a better flip might be a sure fire success in Alpharetta where the market has almost never been down.  The key is an expert.  This is the reason why Zillow and others won’t replace true professionals. 

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