Real Estate Data Solutions: Changing the Multifamily Industry
Multifamily properties come in different forms. From duplexes to large apartment complexes to skyrises, they cater to different environments and individuals with different needs and incomes. This is what makes them so attractive to investors, not to mention the fact that their demand continues to grow. It is for this reason that investors need reliable multifamily real estate data solutions.
Staying on the topic of demand for multifamily residences, there are three primary reasons behind the steady demand:
- A high demand for housing: America’s population is experiencing slow growth. Coupled with strict housing regulations, rising prices, and a populace in need of places to stay but cannot afford to buy single-family residences. The only logical solution is multifamily properties.
- A preference for aging in place: More and more of America’s seniors prefer to stay at home rather than move to a nursing home. Families need to stay together to care for a senior loved one. In such cases, multifamily properties are ideal, as you have multiple generations of the same family in the same place, caring for each other.
- A surge in demand for workforce housing: As large multinational companies set up shop in various towns and cities, they tend to need a large workforce. These staff will need places to stay, and multifamily communities provide affordable housing to these individuals.
However, one should note that competition is fierce in multifamily investing. Slow movers get left behind, while those who move fast are the ones who reap the biggest rewards and make substantial financial gains. One of the ways multifamily investors get a competitive advantage is by relying on multifamily data providers to create data-driven strategies.
Data-driven strategies are now at the core of multifamily investing, and this is not just a fleeting trend but a complete industrial shift. These strategies, which are only possible thanks to multifamily real estate data solutions, help make multifamily investing profitable through:
- Market analysis: A reliable multifamily data provider will enable multifamily investors and analysts to better understand market trends, occupancy rates, pricing dynamics, industry changes, and potential investment opportunities.
- Pricing optimization: Pricing is vital when it comes to multifamily occupancy. Therefore, management companies and investors would benefit from understanding historical rent prices and considering other factors in the target area before deciding on rent prices.
- Risk management: As much as multifamily properties are in demand, location is still crucial. The worst action a developer can take is to develop multifamily properties in a location with low demand. Multifamily real estate data solutions provide market information that enables an analyst to minimize the risk of such disastrous investments.
- Predictive analytics: The ability to view and analyze market trends, view historic property details, and run “what if” scenarios using fictional properties in the hands of an expert analyst enables one to predict the result of potential investments.
Already, numerous multifamily investment companies are seeing success from using multifamily real estate data solutions in their operations.
In this blog, we will look at how multifamily real estate data solutions are transforming the multifamily space. We will also highlight how to choose a real estate data provider and explain why the future of multifamily success is in big data.
What to Know About Commercial Real Estate Data Analytics
It is worth looking at commercial real estate data analytics when discussing multifamily properties. The reason for this is that multifamily properties—though they are used for residential real estate—are commercial properties.
So, what exactly should a multifamily investor—who will use real estate data solutions—know about commercial real estate data analytics?
- The science of commercial real estate data analytics: Here, decisions are not made via gut feelings. Instead, numbers, metrics, and cold, hard facts from data drive decision-making. Commercial real estate data science is a part of commercial real estate data analytics, and it is a field that encompasses computer science, mathematics, statistics, and, in more recent years, machine learning and artificial intelligence. These data science experts and data analysts rely on data from real estate data solutions providers to perform their calculations and analysis before arriving at a conclusion.
- The rapid rise of data-driven companies: As we mentioned in the previous section, investors with the most reliable data tend to gain an advantage over their competitors. As a result, commercial real estate has seen the rise of companies relying on multifamily big data in their decision-making process. This means that they are hiring more and more data analysts and data scientists to process vast amounts of data.
- Increased use of data analytics tools: Accessing vast amounts of data is pointless if you cannot process it into actionable information effectively. Multifamily analytics tools, such as SMART Apartment Data, provide analysts and investors with reliable data and the means to interpret it into actionable reports.
- The benefits of commercial real estate data analytics: Multifamily investors get to enjoy actionable and well-informed insights that help guide their decisions, increasing their likelihood of investment success. Furthermore, multifamily real estate data solutions, such as SMART Apartment Data, offer a platform where investors can track performance, evaluate strategies, and find new investment opportunities.
We now understand the value of commercial real estate data analytics and how some multifamily data providers offer an incredible analytics platform for investors. In the next section, we’ll dive into how to choose a multifamily real estate data provider.
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6 Strategies for Choosing Multifamily Real Estate Data Providers
So, you’re an investor considering investing in the multifamily space. There are numerous multifamily real estate data providers in the market, but you’re not exactly sure how to screen through the different real estate data solutions.
There are some strategies that you can implement to ease your selection process of multifamily data providers. These strategies include:
1. Determine data integrity
The success of your commercial real estate data analytics efforts depends on how reliable your multifamily data provider is. If your data provider uses a third-party database, find out which ones they use by performing your due diligence. Ask your data provider how they gather their information, confirm how often the data is checked for accuracy, and how often it is updated.
Note that for some of this information, the multifamily data provider might request that you sign an NDA. Remember that your goal is to determine the reliability of their data for your investment success.
2. Analyze their analytics capabilities
If the data is accurate, the next step is to determine the effectiveness of commercial real estate data analytics tools. If you are not well-versed in data analytics, involve your data analysts in this step. The multifamily analytics software should come with tools that ease the interpretation and reporting of data.
3. Analyze the depth of their property data
You want to ensure you are getting your money’s worth. Therefore, during the software demo, dive deeper into the property details. If you can, cross-check the data of a potential provider with a different one to determine what is missing. Also, ensure the data provider covers your location of interest.
Some of the basic information that multifamily real estate data solutions should have include:
- Historical rents and occupancy details
- Floor plan analysis
- Properties in the pipeline
- Competitor snapshots
- Submarket overviews and trends
4. Check the multifamily data provider’s reputation
Reviews are your friend. Start with the reviews on the multifamily data provider’s site, then check other independent sites for reviews. You should also read their case studies as well. Reputable multifamily data providers will provide detailed case studies with real companies, explaining the problems they helped solve.
5. Consider geographic coverage
Where you want to invest will determine your choice of an apartment data provider. Some data providers will only focus on specific states or regions. If you are in the United States and are looking for a reliable apartment data provider that provides national data, SMART Apartment Data may just be your best bet.
6. Check the price
At this point, you should have narrowed your list of apartment data providers to a handful. You now want to check their prices and compare them to your budget. Note that the lowest-priced software solution isn’t always the best.
All the previous steps should have cleared any unreliable multifamily data provider on your list, leaving you with only reputable ones. Therefore, you will want to look at the features offered and the price that comes with it. Keep in mind your needs, and choose a provider that will provide what you need for your success.
Why Multifamily Real Estate Data Solutions Are the Future
The days of making investment decisions based on gut feelings or intuition are long behind us. Today, many commercial real estate companies and multifamily investors harness the power of multifamily real estate data solutions to make informed decisions based on reliable data.
The right apartment data solutions provide insights into emerging market trends, resident preferences, and potential growth areas, allowing investors to capitalize on promising opportunities in this brave new world.
When it comes to national data on the multifamily space, SMART Apartment Data is your solution. With SMART Apartment Data, you get data tailored to the needs of investors, brokers, and analysts. The multifamily analytics software provided by SMART Apartment Data gives you an edge over your competitors with features such as:
- Year-over-year inventory variance
- Sub-market overview and trends
- Multifamily market dashboard and change notifications
- Competitor snapshots
- Trend analyzer
- Historical property details
The future of multifamily is data-driven. Partner with SMART Apartment Data today.
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