Data analytics technology has proven to be very useful for the real estate sector. A report by McKinsey shows that a growing number of real estate professionals are leveraging big data to improve sales and customer satisfaction.
In order to make the most of data analytics in the real estate sector, it is important to be familiar with the different tools and types of data that can be used. Many real estate agents focus only on tapping traditional data. However, McKinsey author Gabriel Morgan Asaftei and his colleagues argue that 60% of the value comes from nontraditional variables. Therefore, real estate professionals shouldn’t be too discerning with the data that they take advantage of.
In fact, we would go so far as to say that big data is the greatest gift for real estate professionals since the turn of the century. However, it must be used wisely.
Data Analytics is Transforming the Real Estate Sector
Real estate marketing is a constantly changing, often volatile and unpredictable landscape. Property costs can vary wildly, influenced by a number of factors as well as the larger economic health of the nation.
Despite this, property remains an attractive and popular investment option for many people. It is a versatile and varied market, representing a viable investment alternative to more traditional routes like stocks, shares, or bonds. For an investor to be successful in any market, be it the stock market or real estate, effective and accurate market analysis is absolutely crucial. It can give you a deeper understanding of the processes involved and the systems in place and can give you an advantage over your competitors.
The good news is that big data can be incredibly useful for real estate investors and buyers. There are a number of tools available that help investors analyze the property market. Let’s take a look at some.
Why is Using Big Data Tools to Conduct Property Market Analyses Important?
Before we get into the tools that are available for property market analysis, let’s establish why it is so important in the first place. Investing in property is different from other investment methods such as shares or stocks. Shares can be bought, sold, and traded quickly, in reaction to or anticipation of broader market trends and movements. Investing in property, on the other hand, moves at a much slower pace. You can’t drop assets quickly and pick up more at speed. This is why proper analysis of market data is so important, it can work to confirm that you are making the right moves and making educated decisions.
What kind of property you buy, where it is, and what surrounds it can all have a significant impact on the current and future value of that property. To ensure you are making the right choice when looking to invest in property, let’s look at some of the analysis tools available.
Fortunately, a number of data analytics tools can be very helpful here. You will want to make the most of big data technology if you want to make sensible investment decisions.
Statistical Atlas
The Statistical Atlas is an invaluable data analytics tool that can give you detailed insights on a wide variety of national markets and areas. You can view the US by state, city, township, county, even all the way down to elementary or high school districts. Once you have selected your desired area, you can access a whole range of information and metrics, including data on age, sex, and ethnicity demographics, as well as information on the area’s household types, employment rates, and average income.
All these factors can have a significant impact on real estate values, and so this data is incredibly helpful for property investors. It can give you an idea of the potential costs and resale value a property in any area might have, whether you’re looking for a small purchase to get yourself on the ladder or a substantial multi-family home investment. One major bonus of the Statistical Atlas is that it’s absolutely free to use.
Google Street View
This is another free big data tool that can be surprisingly helpful when looking to analyze the surrounding area of a property you’re looking to invest in. First launched in 2007, Google Street View offers users a first-person perspective of nearly every street in the US. Use Google Street View to assess a property’s proximity to local amenities, attractions, road and highway access, and the overall feel and look of the neighborhood.
Dealcheck
Dealcheck is another great data analytics tool that is worth trying out. Let’s say you’ve found a property you like the look of. You’ve checked the Statistical Atlas and Google Street View and it looks promising; on the surface this would appear to be a perfect investment opportunity. But, how can you be sure? Software solutions like Dealcheck allow you to calculate property metrics and draw up detailed insights into a property’s worth and potential resale value by looking at various types of data, with options to generate long-term cash-flow and profit projections.
What’s more, Dealcheck can also be used to search for viable properties for future investment. It has one of the best data mining tools in the industry. By inputting a set of customizable parameters and criteria, you can screen properties within set areas to find investments that meet your requirements.
Zilculator
For investors looking to take their market analysis approach to the next level, Zilculator can be used to provide even more detailed insights and metrics for investors, real estate agents, and property developers. It offers a deal structuring service to assist buyers, while its comparison feature can allow you to assess the value of a potential deal. Zilculator compiles reports on properties with easily accessible data points that can be shared with other buyers and investors to streamline and speed up the sales process.
Data Analytics Tools Are Invaluable for Real Estate Investors and Buyers
More real estate investors and professionals are taking advantage of big data tools. The property market is proving to be a more and more attractive prospect for would be investors. With a highly variable and ever-changing landscape, many investors find real estate to be a more exciting, rewarding, and ultimately lucrative pursuit than they would find in traditional investment opportunities. Despite this, the property market can be extremely unpredictable, to ensure your investments and finances are secure you should strive to conduct effective market analysis using the range of tools available to do so. The right data analytics tools can be very valuable.