How data is changing residential property investment
*The insights as summarised in this article were provided by Eleanor Creagh (PropTrack), Mickael Roger (PropHero), and Ajay Ayyar (PropertyDirector) through the Proptech Panel How data is changing residential property investment. *
In Australia, there are over a trillion data points available for around 12 million dwellings, encompassing critical investment prospects such as historical price growth, rental yields, transport infrastructure, schools, population growth, median dwelling and average rental prices, among others. But, how do we sift through this vast amount of data and uncover its essence? How do we make it relevant and consumable for us or for our audience? Australians have a strong affinity towards property investments, but are we equipped with the necessary sophistication to ensure profitable returns?
Today it's crucial to use technology and data to make informed investment decisions. Below are the experts’ takes on how data is revolutionising the way we invest in real estate—which is currently the largest asset class in Australia—and how property investors can take advantage of it.
Focus not on what the data says but what it means.
If you're working with data, it's important to know what questions you want to ask. Don't just focus on what the data says, but also what it means. You need to be methodical and have a starting point, or you might get stuck in analysis paralysis.
Your next step is to figure out how best to communicate findings to key stakeholders. In that sense, it’s important to know your audience. Build reports that are easy to understand, whether your readers are experts or consumers. There are many proptech products on the market you can use to automate this process. PropTrack, for instance, provides an analytics solution that aggregates data from various sources, such as property listings, property transactions, and government records, and breaks down this data into more digestible formats.
Data can address many challenges facing property investors.
Investing in property can be difficult, stressful, and not always transparent. Property investors often only have two options: either do it themselves or go through a buyer's agent. Those who DIY tend to buy properties close to where they live, which in most cases might not be the best choice. On the other hand, if they go with a buyer's agent, it can be expensive.
This is where data, coupled with technology, can be beneficial. For instance, PropHero has revolutionised this space with a data-driven property investment platform that aims to simplify the process of finding, buying, and managing the best investment property. It reduces the need for a buyer's agent by leveraging technology to make property investments simple, transparent, and more profitable, so that more investors, regardless of their level of sophistication, can do it themselves.
Digitisation is the future of portfolio management.
This means using digital tools and technology to manage your portfolio of properties. It involves automating and streamlining traditional processes, such as record-keeping, property valuation, financial analysis, leasing and tenant management, and maintenance and repairs.
Putting all your property information in one digital platform has many advantages. Firstly, it makes it simpler to manage everything. By having all your property information in one place, you’ll find it easier to keep track of everything, without needing to search through multiple documents. Secondly, most platforms on the market use algorithms and data from the past to give you insights about your portfolio. You can use this information to forecast how your properties may grow in the future, based on factors like location and type. Finally, using a digital system means you have more options and flexibility when it comes to bookkeeping and analysing your portfolio. It's much better than using paper or Excel spreadsheets.
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