Real estate is among the most profitable industries, especially in growing and well-established economies. Whether you’re dealing with commercial or residential real estate, everyone from the contractor to the investor to the realtor gets to make a decent profit if they’re smart enough.
And with technologies like machine learning, artificial intelligence, and big data analytics, property developers can even increase their profits by double digits. If you’re wondering how this can be done, keep reading.
Below are a few ways analytics can help improve profits from property development.
Analytics Help With Making Smart Investment Decisions
Certain critical decisions can make or break your bottom line, whether you’re a property developer or a fix-and-flip real estate investor. For example, you will need to smartly consider and assess a property’s location, the demand in that area, and the best kind of property there.
You may also need to predict the future of your interest in the real estate market. If strictly done manually, this can be incredibly strenuous and time-consuming.
However, thanks to analytics and modern technology, you can explore as many cities, towns, and neighborhoods as you like with minimal effort and time. It’s also easier to make smarter, better investment decisions that could help skyrocket your profit when guided by intelligent, real-time data and insights.
You Can Save More Time and Effort Spent on Future Projects
The data generated from analytics can always be used for future reference. If you’re in commercial real estate, for instance, CRE historical data ensures better project outcomes in several other ways besides decision-making.
Historical data can help improve operational efficiency while providing you with a competitive advantage in your real estate market of focus.
Better Risk Mitigation
No one wants to flex their muscles and invest their (possibly hard-earned) money on real estate projects with meager chances of paying back. Risk analysis is one of the things that real estate investors and property developers must consider carefully before undertaking projects, making investments, or buying property.
The analysis process may involve considering a range of potential risks and possible contributing factors, including natural disasters, political instability, crime, and even elements that may cause unexpected economic downturns.
Afterward, the next big step is usually to have the plan to mitigate these risks.
Well, analytics can help you collect and interpret data regarding potential risks, sometimes alongside insights on risk mitigation, and these can be a huge determinant of your bottom line.
Navigating Property Renovation Hurdles
Many real estate investors buy and renovate an existing property before listing it for sale. It’s more common among residential real estate investors, but flipping and selling commercial properties is exceedingly becoming popular in today’s real estate industry.
It can be more profitable than other investment options with the right approach. Still, you don’t just toss your money into a property’s renovation and put it on the market. Before doing so, you need to ask yourself a few critical questions.
- Which renovations would add more value?
- What would potential customers want?
- How much can you earn from the said renovations?
Analytics can help you with answers to these and more issues, ultimately helping increase profit.
Can Help Improve Customer Satisfaction
One of the most significant challenges real estate developers face is customer retention (especially customers with ongoing projects). Developments are sold out all the time, sometimes to new owners.
So how do you prevent these properties from losing their buyers and ensure you get the money from your customers? Analytics can help with many things, including allowing you to identify the areas your clients seem dissatisfied with.
Analytics can also be an effective tool for customer service and satisfaction. From measuring customer satisfaction to identifying customers who may be at risk of leaving, analytics data can be an excellent tool to help with this.
Keeping Track Of Your ROI
Finally, ensuring that you are earning more than you are spending is one of the keys to success that any real estate developer must master. From project monitoring to tracking sales, now, with the help of analytics, you can optimize your efforts and reach your real estate goals.
As much as it is not impossible, manually analyzing data and statistics can be incredibly strenuous and time-consuming. Thankfully, we live in a tech-dominated world, and the list of analytics tools or software for developers and investors in real estate is endless. The above are just a few ways property developers can use analytics to improve their profit margins.