Data’s all around us. Every time we make an online purchase, send a tweet, respond to an email, or make a phone call, we’re creating new data. What does that mean? And why should anyone care?
Well, most of that data is probably irrelevant, and no one cares. But property managers around the globe recognize the importance of applying data, or the analysis of data, to maximize operational efficiencies, grow revenue, and increase property value. Because those efforts are among a property manager’s most important responsibilities, and skills that IREM-certified professionals have mastered.
At the same time, with so much data, and with property management companies using so many disparate systems, we struggle to gain the insight we really need into how our properties are performing.
Why is it so hard to get at the insights we really want?
The problem with data is that there’s just so much of it. Since it’s delivered to us in so many different ways, and from many different places, making sure the data you get is the data you actually want becomes a problem. For example, imagine you’re using a revenue management system and a property management system. One system gives you data every day, and the other each week. The systems are not communicating with each other, and you’re getting data measured in different ways – that’s not useful to you.
What often ends up happening in these scenarios is that you’ll probably need to generate different reports from various tools, export the data from those reports into a spreadsheet, and then make every effort to get to the information you’re looking for. But the data doesn’t really match, so you end up unsure you can trust your own analysis.
It’s a common problem in real estate management – the technologies driving your business aren’t integrated, and, therefore, you and your team are making manual accommodations to achieve the results you’re looking for. It’s not an ideal situation, and definitely not the best use of your team’s time. Wouldn’t you prefer to have your professionals spending their time on activities that drive revenue and grow the business?
You can persevere for a while manually manipulating data, but at some point, you’ll need to consider other options. What you really want is to see an overview of your properties’ performances, and an apples-to-apples comparison of your properties to similar properties. You also need flexibility, to change data parameters as requirements change. For example, the pandemic has thrown a wrench into most plans over the past two years. How has COVID impacted performance? And, what does the future look like, as we emerge from the grip of this pandemic?
What are your options?
There are a couple of things property managers can do to improve the state of data collection and analysis. First, figure out what’s important for you to know. What should you be measuring? Consider the types of assets you have, and what your plans are for those assets. If you don’t have the right data, you’ll make the wrong decisions.
Second, while some businesses are fortunate enough to have built or acquired the technology, they need to provide centralized access to data in real time, many rely on purchased data, which can only take you so far. You need to gain control of your data. If you’re making decisions based on an incomplete and rigid view, your choices are built on a small slice of the insight you can potentially gain. It’s not far off from guessing.
Building a data strategy
In the same way you develop strategies that address marketing, business development, and operating costs, defining a strategy that applies data analysis to your business practices is essential to achieving favorable results. A good place to start is by defining your goals. What insights are you looking for? With defined goals, you can begin to collect and organize data around those measures.
You should also make the data and data analytics accessible to your team, so they, too can visualize and pinpoint areas for improvement. They don’t need to be data experts, however, the tools you use should have interpretive capabilities. With that, they’ll be better equipped to take the next steps to suggest and implement improvements.
IREM offers a solution to help property managers create data-driven cultures, with Income/Expense IQ Benchmarks. Now you can submit your property data and compare performance against income and expense benchmarks in real time. Your property data is tied to your company account, and can have multiple users to submit data and build reports. Benchmarks are available at the company level – for all users within your business.
Data is uploaded from Excel, or, if you use one of the common property management software tools, you may be able to upload the data directly. One of the best features is flexibility – the flexibility to view data and run reports for the insights you really need. Benchmarks are updated monthly to keep you on top of how your properties are performing compared to the market.
Data-driven decision-making leads to better performance
It’s clear that without data analytics, real estate management companies would struggle to manage building operations efficiently and improve property value. Who knows what you’ll find, given the right data-based insight? There’s the potential to generate more revenue, attract new residents and tenants, expand your business into new markets, and advance your company’s success.