It’s undebatable—real estate big data and the resulting analytics are proving to be essential for finding a profitable investment property.
As the real estate business advances and becomes an increasingly attractive opportunity for young and potential investors, obtaining accurate information becomes a necessity, as well.
Table of Contents
- The Concept of Big Data
- Big Data Leverages in Real Estate
- 5 Advantages of Using Real Estate Big Data for Investors
- Where to Find the Best Source for Real Estate Big Data
Actually, access to up-to-date information is of great importance for anyone involved in real estate. Data is the investor’s number one guide to how the market is doing at the moment.
Real estate big data happens to be at the top of the ladder when it comes to information of vital importance for the real estate market—and future investment ventures.
We’re here to guide you through the topic of why having access to accurate real estate data is important and what the advantages are—so be sure to scroll down.
The Concept of Big Data
It should go without saying that major real estate firms make well-calculated investment decisions based not only on experience and historical trends—but on the collected data, too.
Nowadays, access to a scope of information on the real estate market is empowering real estate companies, investors, and other professionals and offering them insights.
Before the development of real estate big data, real estate companies were compelled to adapt to almost traditional methods. Such methods, as you can imagine, required a lot of time, especially when profiling entire neighborhoods.
So, to scrape the surface and introduce this complex topic in the right way, we will start from the beginning. And by “beginning,” we mean getting into the core of real estate big data and how it works—and showing some examples.
So, what is big data?
Real estate big data implies structured, semi-structured, and unstructured data that’s been collected by organizations. The purpose of such information is that it can be dwelled into for further insights and used in future projects, modeling, and advanced analytics applications.
It is no surprise, then, that systems that process and store this kind of data are becoming a common component in organizations.
When talking about real estate big data, it’s virtually impossible not to mention the three V’s that characterize it:
We should add that the abovementioned V’s were first identified in 2001 by Doug Laney, an analyst at the consulting firm Meta Group, Inc. That said, as time went on, several other “V’s” were introduced—including Veracity, Value, and Variability.
The Three V’s of Big Data
Here’s what the three V’s of big data represent, along with a brief explanation of each:
1. Volume
As can be assumed from the very phrase “big data,” the concept of volume implies dealing with high volumes of data. They include social media data and clicks on a web page to the data collected via mobile apps or sensors.
2. Velocity
Investors are constantly on the lookout for relevant and recent insights regarding the real estate market, and thus, the data must be gathered and processed quickly.
In the real estate business, time is of great importance—and following trends and staying updated on the situation can make or break your next investment project.
3. Variety
The last category, naturally, refers to the wide variety of information that is available. Compared to traditional data, which is viewed as more structured, big data typically comes in unstructured sets.
Either way, having as much data at your disposal as possible allows you to see the “bigger picture”—and make informed decisions as an investor.
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How Does Big Data Work?
What most likely sparked your interest—because you’ll be the one using this data more than you thought—is how it works.
We are here to break down this concept and bring you closer to the process of collecting and filtering information—which will be of great importance to you.
In short, “big data analytics” implies collecting, processing, cleaning, and analyzing extensive datasets in order to help organizations operationalize the data they gather.
It’s worth noting that data collection looks different for every organization. For instance, some data will be stored in warehouses where intelligence tools and solutions can access it easily.
Then, there’s the processing of data. Once it has been collected and stored, the next step is, as you can guess, organization. The end results should be accurate analytical queries.
Moving on, the data needs to be cleaned. It is done to improve data quality and get highly accurate results—which means eliminating duplicative or irrelevant data.
Finally, there’s data analysis—getting big data into a usable state. The process usually takes a bit more time but results in relevant and valuable information.
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Big Data Leverages in Real Estate
You could have guessed it by now.
One of the latest trends that have emerged in the real estate business is relying on big data. It is safe to conclude that, with analytics, access to lucrative investment opportunities is booming—and transforming the real estate industry in a positive way.
We are currently seeing a considerable increase in the adoption and usage of big data and analytics. The analytics can significantly impact an investor’s thinking and decision-making, as well as the overall development of efficient business strategies.
By relying on analytics, investors are now able to review patterns more thoroughly and understand whether a particular property is a good investment or not.
But that would be just scratching the surface.
Having such a wide scope of data at your disposal is crucial. It impacts everything—from analyzing local surroundings, sales patterns, and neighborhood personality of each area to gaining knowledge of certain markets and demographics.
5 Advantages of Using Real Estate Big Data for Investors
As you are now familiar with how big data works (and what role it holds within the real estate business), it is time to move on to the most important part. And that would be discussing the benefits of using this data and analytics for real estate investors and their future investments.
The main five benefits of real estate big data and analytics are:
- Accurate property evaluation
- Risk mitigation and property insurance
- Improving marketing strategies
- AI decision making
- Improving customer service
We will go through each one individually, so get ready to take some notes.
1. Accurate Property Evaluation
Unlike consumer goods, the advantages of investing in real estate properties are realized over a long period of time. That’s why an estimate of a property’s value must be taken into consideration, along with other “secondary” factors that may influence its value.
As investors, you’re likely aware of the importance of the value of the real estate you are interested in. Therefore, it is absolutely essential that you review all relevant factors, such as financing, listing, property insurance, taxation, and so on.
And the first advantage of using big data and analytics is linked to evaluating the real estate property in question. Real estate businesses use this data to replace traditional real estate appraisals with newer assessment methods.
And since the data that they’re using is based on recent economic and demographic trends, it automatically eliminates human errors that may occur during traditional property evaluation.
It does not mean eliminating the human approach entirely, of course. It simply means that the data algorithms and analytics help make well-calculated conclusions while appraising properties and, ultimately, can contribute to accuracy.
2. Risk Mitigation and Property Insurance
You’ll probably agree with us that the following benefits go hand in hand. Risk mitigation and property insurance are two topics that are naturally related to one another.
Real estate investing, like any other business, can have some beautiful and not-so-beautiful moments. It is why experienced investors should keep their eyes open when building their future investment strategy.
Even if it seems like the real estate market is thriving currently, there is still a 1 in a 100 chance of a risk that might take a toll on your investment. That is why professional investors should not only ensure that their property is protected but think about insurance, too.
And again, real estate big data can be of use. Having insight into clean and organized data sets is crucial when developing a strategy and predicting the financial risks related to investing in specific projects.
More importantly, big data analytics are of huge help to insurance companies.
How so?
Well, real estate big data provides accurate numbers to prospective buyers, as well as their insurance providers. It pushes them toward making better assessments.
3. Improving Marketing Strategies
If you’ve been present in the real estate market for some time now, you’ll agree when we say that the competition is fierce.
It is a constant battle, where you are required to navigate a seller’s and buyer’s market, as well as minor changes that can affect the everyday decisions of investors. In a sense, they’re all breathing down each other’s necks, trying to ensure the best possible outcome.
What you need are expert marketing skills—both online and offline—and effective strategies. On that note, another crucial advantage of real estate big data and analytics is that they can assist you in improving your marketing skills.
Public data sources, like surveys and social media, provide insights that can assist investors in determining the best market for their next major real estate project.
Big data analytics contributes to this research by providing real estate businesses with data sorted based on different factors, such as gender, age, preference, interests, region, and so on. And that means more targeted marketing.
Once you implement this approach, you’ll see that it will undoubtedly improve your marketing interactions and help you identify the needs of your target audience.
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4. AI Decision Making
Artificial intelligence has become a “buzzword” in many emerging industries in recent years, including real estate. But like many trendy new tech-related terms and trends, it’s commonly misunderstood.
And because it is often misunderstood, we believe it’s important to note that AI is not meant to replace the human approach.
On the contrary, the primary role of AI is to boost efficiency through the automation of routine tasks and contribute to smarter decision-making.
Naturally, big data is strongly connected with artificial intelligence—and machine learning, in particular. It essentially promotes transparency in real estate business processes. Moreover, ML algorithms can process massive amounts of data, which would be time-consuming, if not impossible, to do manually.
For instance, big data can reveal areas that are suitable for growth based on demographics and can help you fine-tune your strategy based on the needs of potential residents.
5. Improving Customer Service
When we say that big data is also improving customer service, we’re specifically referring to chatbots.
Even though many websites are still unable to incorporate chatbots, they are essential. They can serve as a shortcut to a better understanding of your clients.
Big data and chatbots can potentially transform customer service. You can essentially analyze interactions across multiple data points—such as messages, searches, reviews, and past purchases—identify patterns and improve your approach based on that.
Plus, customer information gives you direct insight into what your clients need and what their main questions and concerns are, allowing you to personalize your services.
The most important thing is that the data is saved and, as such, available for future use and lead generation.
Where to Find the Best Source for Real Estate Big Data
Firstly, it is important that we emphasize the following:
Regardless of whether you’ve just stepped into the real estate industry for the first time or you’re an established investor looking for the next investment opportunity, the question that you’ll ask yourself is practically the same:
What should my future investment project be based on?
The short answer would be accurate real estate data, obviously.
It’s evident that such massive undertakings require professionalism, knowledge, and time. But it’s important to consider where you gather the information on the basis of which you’ll make an investing decision.
On that note, accurate and timely investor data is just one step away from you—Mashvisor.
Investors who are looking for accurate data should know that Mashvisor draws and collects data from different verified public sources already familiar to real estate professionals. The data is then analyzed based on historical and predictive analytics and, finally, organized in a neat format.
Mashvisor is here to cater to the needs of investors who value their time and expertise. Some of the data that’ll be at your fingertips when you start using Mashvisor’s tools includes:
Sign up and start a 7-day free trial with Mashvisor now.
Mashvisor’s various tools allow investors to obtain accurate and timely data on their chosen properties.
Final Thoughts
Here’s where we bring the topic of real estate big data to an end. Let’s take this opportunity to go over a few takeaways.
The concept of “big data” implies structured, semi-structured, and unstructured data collected by organizations. The three main characteristics of big data are the three V’s, namely, Volume, Velocity, and Variety.
Big data is now considered an integral component of many industries, one of them being real estate. It is significant because it carries numerous benefits for the real estate investor.
By relying on real estate big data, real estate investors and other professionals can perform an accurate evaluation of the investment property. It assists in mitigating risks and assessing insurance. Also, real estate big data can help improve marketing strategies, make AI-based decisions, and understand clients better.
This type of up-to-date data is available to investors through Mashvisor, as well. Our platform is dedicated to helping investors with their short and long-term goals, and providing accurate data regarding the real estate market is the foundation of it.
For those who are interested, Mashvisor offers a free demo. You can schedule your appointment and get in touch with one of our product specialists to get an informed introduction.
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