The real estate sector often rightly appears to be far removed from advanced technologies. Some may even think what tools such as predictive analytics even contribute to this sector? The short answer? Plenty; in fact, the real estate sector has become increasingly reliant on predictive analytics in its many, many forms, be it decision analysis, predictive search, etc. To what end? To enable real estate companies and agents to make better decisions, improve sales, etc. of course. Now, in order to give you a fair overview of the concept, we will discuss both the advantages and disadvantages of predictive analytics in real estate. We will begin with the pros:
- Robust portfolio management: Modern analytics platforms now make use of genetic modelling, machine learning, neural networks, and other similar advanced tools in order to precisely evaluate properties and thus enable the real estate company to maintain a robust portfolio.
- Lead generation: Together with big data, predictive analytics tools are able to closely examine data about countless factors, such as financial levels, demographics, etc. to make highly accurate predictions about people who may be interested in selling their house or perhaps renting one, etc.
Next up, some of the disadvantages and challenges of predictive analytics in this sector:
- Privacy concerns: You know what is the first thing that comes to mind when one says data? Privacy. Unsurprisingly, privacy remains a concern in the real estate world as well. Then there are also concerns about the authenticity of data.
- Data sanctity: One of the biggest challenges associated with the use of a data-driven technology is that it necessitates access to real-time and robust data from across a variety of sources. Basically, predictive analytics can be rendered ineffective without clean and proper data.
Now, let us see some of the real-world applications of predictive analytics in real estate.
- Value prediction and estimation: The ability to accurately foretell the value of real estate is critical and predictive analytics is able to help by analyzing data from a variety of resources in order to better gauge the rate of economic growth and other such factors in a given geographic area.
- Aid investment analysis: Real estate is a tricky sector and that also holds true for any investments one may make in it. Thankfully, you can put predictive analytics to work in this department as well, helping companies and individuals identify prospective real estate investments that are primed to deliver top-notch returns.
- Heat maps: Predictive analytics is being increasingly used by real estate companies to generate heat maps, i.e. a collection or list of geographical areas that conform to a specific criteria. It is a terrific visual aid for investors in the early stages of planning their investments.
Predictive analytics is still admittedly in its nascent stages and yet it has managed to make an incredible amount of difference across the spectrum of industries including real estate. As the real estate sector continues its march towards a technology-driven and decidedly challenging future, avant-garde tools such as predictive analytics are poised to assume an integral role in the sector. If you wish to achieve such benefits including the ability to deal with the business’ key challenges, etc., a good idea at this point would be to start looking for a trusted and experienced vendor for custom real estate software.