As a Forney rental property owner, you know that getting informed decisions is key to your success. However, gathering accurate and up-to-date information can be difficult. In the past, real estate investing was based more on speculation and educated guesses than on actual data. If you would rather skip the guesswork and minimize your risk, real estate data analytics is what you need. In this article, we will introduce you to the basics of real estate data analytics and show you how you can use it to make sound investment decisions that will increase your profits.
Defining Real Estate Data Analytics
Real estate data analytics collects, organizes, and analyzes rental real estate market data. This information can identify trends and patterns to help you make informed decisions about your investment property. This analysis is most often administered by using specialized software.
There is a variety of sources of data that you can use for your real estate data analytics. The most common source is public records, which include information on rental properties sold or listed for rent in the past. A different data source is surveys, which can provide insights into renters’ preferences. In the end, you can also use data from your own rental property to track trends over time.
As you collect your data, you need to organize it in a way that makes it easy to analyze. One way to do this is to create a spreadsheet with all relevant data points. This will allow you to easily sort and filter the data to find the information you are looking for.
Types of Real Estate Data Analytics
As soon as you have collected your data, you must analyze it to extract useful information. There are a few distinct types of analyses that are commonly used in real estate data analytics:
- Descriptive analytics: This analysis summarizes and describes your data. It can help identify trends and patterns in the rental market.
- Inferential analytics: This sort of analysis goes one step further than descriptive analytics by making predictions centered on the data. For instance, inferential analytics can be used to predict how changes to the rental market will impact your property’s value.
- Predictive analytics: This type of analysis practices historical data to predict future events. Predictive analytics can forecast demand for rental properties in a certain area or predict how changes in the market will affect your business.
- Prescriptive analytics: This type of analysis combines predictive and inferential analytics to make predictions and recommend measures to take to achieve specific goals. For example, prescriptive analytics can suggest pricing strategies for your rental property based on market trends.
Benefits of Real Estate Data Analytics for Property Owners
You now know the basics of real estate data analytics let’s look at how you can use it to improve your rental business. Following are ways that you can use data analytics to make better decisions about your single-family rental property:
- Spot trends in the rental market: By analyzing data on rental prices and vacancy rates, you can identify trends in the market. This information can help you adjust your prices to maximize profits.
- Make conscious investment decisions: By using data analytics to research neighborhoods and compare properties, you can make informed decisions about where to invest your money.
- Reduce risk: By using data analytics to assess the risks associated with different properties, you can minimize your exposure to potential losses.
- Improve marketing efforts: By analyzing data on the preferences of renters, you can better target your marketing efforts and attract more qualified leads.
- Increase profits: By using data analytics to make informed decisions about pricing, marketing, and investments, you can increase your profits.
Real estate data analytics is a powerful tool that can be used to improve your rental business. Additionally, by analyzing your data, you can identify areas that need improvement and make changes to improve your rental income. Finally, by using data from surveys and public records, you can gain insights into renters’ preferences and adjust your property to appeal to them. A professional Forney property manager will have access to all the information we’ve gone over so far, as well as the necessary expertise to assess and use the data to your benefit.
If you’re not already using real estate data analytics to inform your decisions about your rental property, now is the time to start. Take advantage of this powerful tool to set up your rental investment business for success.
Real Property Management Countryside regularly gathers real estate data and makes assessments to give our clients the best advice available. If you’d like to join the property investors who trust us with their portfolio, contact us online or call us at 469-864-8200.
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