Have you or your organization embraced data integration as a mainstay of your real estate investing operations? If not, then you are at a definite disadvantage in today’s competitive marketplace.
Data is an invaluable resource in real estate and can be your business’ differentiator, but only if used correctly.
If you collect a large amount of data across your portfolio, you may be patting yourself on the back for a job well done. But if you can’t access that data easily or quickly, it can actually become a burden rather than a benefit to your organization.
This is where data integration comes in. Data integration is a technical and business process that combines reliable data from multiple sources, creating valuable and actionable information.
This process may not sound very exciting, but data integration is a vital part of real estate portfolio operations. In fact, it’s increasingly become a differentiator for investors and operators looking to gain a competitive advantage in the market. It may not be a priority for you today, but data integration may become a priority for your real estate organization tomorrow.
The Data Silo Struggle
It’s not unusual for multiple teams involved in real estate to produce their own, independent data sets — the IT department stores backend infrastructure data, the financial team collects revenue data, the accounting team runs various analyses, the marketing team has advertising data, and the operations team collects information at the property level.
However, none of that data is connected in a meaningful way to other data within the portfolio. The data remains siloed across multiple platforms that cannot integrate with each other — property management software, financial software, Excel spreadsheets and more. In fact, 75 percent of real estate companies operate with data in silos that don’t integrate with one another, according to the Altus Group CRE Innovation Report.
Having data siloed is a distinct disadvantage for a variety of reasons. If you need to do any type of analysis across the portfolio, analysts have to manually pull data and stitch together multiple data sources. By the time you finish any multi-data source analysis, the data is often outdated or inaccurate. Unfortunately, these Excel reports are often the basis for strategic portfolio-wide decisions. This means that real estate leaders are making massive investments without reliable data to back it up.
Real Estate Tech Enables Integration
But what about the other 25 percent of real estate organizations? What are they doing differently? Rather than relying on a mashup of Excel spreadsheets, they are using fully integrated data pulled in from multiple platforms. This is possible today thanks to the explosion in real estate technology over the past few years.
For a long time, there weren’t many options for investors and operators in multifamily housing to choose from when it came to technology that integrated crucial data around those assets. Some of the initial players in the software space grew to become all-encompassing software that attempted to do everything, and in doing so, specialized in nothing and discouraged tech integrations.
With investments on the line, the industry was hungry for something more. Tech startups today are creating more options for multifamily housing investors and operators to choose from. Now, there is software that can bring all the crucial data points together in one place, integrating data that in the past would have been left to sit unused in a silo.
The Power of Proactive Data Integration
With data more accessible, this allows all the groups involved to connect the dots, act fast and target the best return — something that’s essential in the fragmented environment of large institutional portfolios. This is the key to the democratization of data in the industry. Multiple disparate teams that unquestionably are working toward the same outcome historically hadn’t been able to access integrated data — and now they can.
Marketing teams now have instant access to financial data, so they can see how their marketing programs affect revenue. Financial teams can look at marketing programs to understand why revenue spiked during a given time period. Most importantly for the multifamily industry, property owners can now look at individual properties within their portfolio and understand what’s working or not working, identifying trends or outliers. All of these different teams up to the investor level can see the same data in order to benchmark, identify best practices and get a bird’s-eye view of investments.
It’s a thrilling time for multifamily investors because technology is fundamentally changing the way we access data. With better data integration across the portfolio, operators and investors alike have deeper insights into the data.
About the Author
Cara Hogan is the Content Marketing Manager at Rentlytics, which specializes in multifamily real estate business intelligence. Her background is in Software-as-a-Service and analytics, and she has written extensively about the intersection of technology and business.