RentFax analytics can help investors gauge rental income risk both close to home and far afield.
Risk is an accepted part of real estate investing, but that doesn’t mean an investor isn’t always looking for ways to lessen it—and there’s no shortage of vendors promising solutions. The people behind Kansas City-based RentFax think they have an answer that outperforms the competition and could revolutionize the way real estate investors assess their risks.
RentFax, one of the Affinity Enterprise Group family of companies that also includes Think Realty Magazine, has a proprietary algorithm that takes a variety of available data relating to property income risk and turns it into an easily understandable Rental Income Stability Composite, or RISC, score. It’s touted as the nation’s first and only location risk score for residential income property.
RentFax generates seven different reports—RISC summary, RISC detail, rent report, vacancy report, rent package, pro forma package and income package—that are based on analytics, utilizing real-time feeds from the country’s leading data providers, explains RentFax president Erica Ruzicka.
The RISC rating is determined for a specific residential address (up to four units per property), by analyzing data such as crime statistics, education scores, vacancy rates, tenancy duration, etc., and ranking the property’s income stability on a scale of 1 to 100. It’s useful information not just to a real estate investor, but also to property managers, insurers, private lenders and other businesses involved in the space. The result can prove especially useful to someone trying to assess an out-of-town property or one in an unfamiliar part of their local market.
Other people or companies do have access to the data behind the RISC score, but without RentFax’s algorithm they would have to spend hours deciphering all the data themselves and analyzing what the numbers mean. RentFax makes it simple by assigning scores—similar to a credit rating.
“Lenders use our product to determine whether underwriting is risky or not risky, depending upon the RISC score,” says Ruzicka. “They can use it as a lead scoring tool when a lead comes in and an investor wants to be funded with private money from that lender. They can run a report and know how and where the income risks are for that property and can determine whether to underwrite that deal or not.”
The same goes for the real estate investor looking to invest outside his or her local market. That’s becoming more commonplace as more and more major markets recover from the housing collapse that started in 2008. As those markets strengthen, deals have become less abundant and profit margins have become squeezed for local investors.
Many of those investors are going to other markets where better opportunities exist, and the RISC score can help steer them to the cream of the crop. Even those investors who remain in their local market can benefit from the RISC ratings that can point out how risky an unfamiliar neighborhood may be for their bottom line.
Users purchase RentFax reports through a prepaid credit system rather than per-report basis, which makes volume discounts easier to achieve and allows for maximum flexibility in choosing among the different reports.
RentFax also offers a number of programs to support co-branding, multi-user, group discount, reseller and affiliate income goals an investor or business may have.
For more information or to download a sample report visit www.rentfaxpro.com or call 816-398-4115