Beyond numbers: Using Data Intelligence to identify investment opportunities in real estate

AI-driven Data Intelligence is transforming real estate by uncovering previously hidden trends. Data Intelligence enables informed decisions by combing vast datasets like those provided by multiple listing systems to reveal insights like trends in yield compression.

“Data is the new oil” was a constant refrain propounded by many experts a decade or so ago. You rarely hear the expression now, partially because the metaphor has become clichéd but also because, strictly speaking, data has no intrinsic value.

Simply expressed, more data does not necessarily equal better insights. You need the ability to refine and interrogate data to deliver actionable insights before value can be derived. Rapid improvements in artificial intelligence (AI) over the past decade mean that the underlying principles of the “data is the new oil” mantra are now being realized.

In the real estate industry, the potential of data intelligence to identify patterns and trends is causing the traditional strategic setup to adapt rapidly. But before the era of big data, making informed property investment decisions based on such factors as initial yield was hard to quantify. This was because a centralized system for collecting and sharing relevant data was missing, which made the task of judging viable investments challenging.

The real estate market consists of private individuals all paying diverse amounts in rents or prices for housing. This complicated the task of finding reliable comparables. Furthermore, residential real estate investments are characterized by relatively long holding periods, adding another layer of complexity to evaluation. Finally, the difficulty in comparing deals arises from the unique nature of each property and transaction, making it hard to draw direct parallels or predict future returns with confidence.

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