Loading...
Effective Date: March 1, 2023

Nestimate Disclaimer

Any and all displayed metrics, whether Internal Rate of Return, Return on Investment, or otherwise, presented on this site are for informational purposes only and should not be relied upon for investment, or any other, decisions. Nestment makes no claim or warranty to the accuracy, expected returns, or probability projections, as they do not reflect actual future performance. Metrics are provided by third parties and are not independently assessed by Nestment or its affiliates. We cannot ensure the quality or accuracy of any and all third-party provided data.
Data sources we leverage
  • We use a variety of large datasets from industry-leading vendors (Corelogic, Mashvisor) to power our Nestimate.
    • Corelogic - Forward looking appreciation, LTR data
    • Mashvisor - STR data
  • These datasets are updated and processed on a daily basis, which allows Nestimate calculations to be nearly real-time.
  • Nestment pays for these datasets but provides the net results for free in every listing to our users.
  • We also use open-source data from government websites to reflect accurate changes in interest rates and property taxes.
Calculations
  • Appreciation
    • We use CoreLogic’s forward-looking projection to calculate appreciation. It predicts the appreciation per year, 5 years into the future, using a wide range of parameters at the zip code level.
      • Parameters; Demographic shifts, net income inflow to the area (wealth transfer), macro indicators, interest rates.
  • 5 year equity built
    • 5 year equity built is calculated as rental revenue (STR/LTR rental revenue) minus operating expenses, home insurance & property taxes. It does NOT include mortgage payments.
  • Rate or Return
    • Rate of Return is calculated using the standard IRR formula. You can think of this as a more holistic way to look at how much you can make per year on every dollar you invest.
Estimations
  • STR occupancy rate, STR daily rental rate, LTR monthly rental rate: We use a rolling 12-month median of similar listings in the area to estimate these rates.
  • Property taxes: We use state-level property tax rates to estimate property taxes.
Assumptions
  • Interest rate: We use the current federal interest rate.
  • STR expense ratio: As a rule of thumb, we set the expense ratios for STR’s to 40%. This covers things like a professional property manager, utilities, trash, cable/internet, landscaping, etc. You can adjust this ratio if you want to increase or decrease the monthly expenses you are predicting. STR’s typically have higher guest turnover than LTR’s and require more management and cleaning.
  • LTR expense ratio: As a rule of thumb, we set the expense ratios for LTR’s to 25%. This covers things like a professional property manager, utilities, trash, cable/internet, landscaping, etc. You can adjust this ratio if you want to increase or decrease the monthly expenses you are predicting. LTR’s typically have less turnover and management needs than STR’s.
  • Home insurance: We currently use a flat rate of (0.5%) of the home price to calculate home insurance.
Modeling
  • Even with large datasets, gaps in data do exist and are fairly common.
    • Example: Smaller towns might not have any data for a 4 bed / 2 bath home.
  • Our data scientists fill these gaps using traditional statistical methods like linear models as well as modern machine learning techniques leveraging geographical clustering.
  • While modeling is not perfect, it does help give a relative starting point to base calculations from.
N/A - Not Enough Data
  • If we cannot find the beds / baths of a specific listing, some Nestimate calculations might show “N/A”, meaning we don’t have enough data to serve accurate predictions.
  • You can, however, adjust inputs from “0” to make show Nestimate calculations.