3 Ways To Use Real Estate Data Like An Expert

In this article, we’ll cover - 

• What is real estate data in property management 
• Key metrics agency principals should be tracking 
• How you can use data like an expert to maximise your business

The best decisions in business are backed by data. As an Agency Principal, you want to make sure you’re harnessing reliable real estate data to improve your operations and boost your bottom line. 

By capturing and analysing property data and analytics about your agency, you can make informed decisions about your next move. This is especially important when scaling your rent roll to ensure you’re safeguarding your profits as you expand.

What is real estate data in property management?

Before we go any further, let’s get a few things straight. Real estate data is an umbrella term used to describe any kind of stats or analytics related to real estate businesses or the property market. 

In the case of real estate agencies, data is used to track the profitability and performance of your business. Certain metrics help you understand the value of your sales business, while other stats allow you to check the performance of your rent roll (and the people managing it). 

In specific terms, here are some of the metrics property management teams can use to track the performance of their rent roll:

• Net operating income (NOI): this metric shows the financial health of your business and can help you identify if your rent roll is profitable or in the red. It takes into account the total income generated by your rent roll, minus any expenses (like wages or renting office space) to give a snapshot of your profits. To calculate your NOI, use this simple equation: (Total Income) - (Operating Expenses) = (Net Operating Income)
• Properties gained and lost: tracking the growth of your rent roll is important, especially as you scale. This metric looks at both how many new properties you’re adding to your rent roll as well as how many owners are taking their business elsewhere.
• Tenants in arrears: usually shown as a percentage, this metric helps you identify if your tenants are paying on time (or going into arrears). A high percentage of tenants in arrears can be a red flag that your team doesn’t have a system in place to automate and manage rental payments.
• Average response time for maintenance requests: getting repairs sorted quickly is key to keeping your tenants and owners happy. By tracking how long it takes your team to respond to requests, book tradies, and resolve issues, you can identify points of friction in the process (and find ways to streamline your maintenance process).
• Occupancy rate: your property management income is generated by keeping your properties tenanted. By tracing the percentage of your rent roll properties that are occupied, you can spot any trends that might be causing your tenants to vacate. To calculate your occupancy rate, use this equation: (Properties Rented) ÷ (Properties Available) = (Occupancy Rate)
• Tenant turnover rate: another helpful metric to track the health of your rent roll is to see how many tenants are choosing to not renew their lease. A vacant property is a high-stress time for your owners, and leasing costs your agency serious time and money, too. To calculate your tenant turnover rate, simply calculate: (# of tenants that move out in a year) ÷ (total # of tenants in a year) x 100 = (tenant turnover rate)

How to use data efficiently in property management

Collecting data is an important first step to making smarter decisions in business. But to really see an impact on your bottom line, it’s important to interrupt and act on what the data is telling you. Here are three practical ways to get the most out of your real estate data.

1. Understand what metrics you should be tracking 

There is no shortage of metrics you can measure in real estate. But being selective about what data you’re tracking (and why) will set your agency up for the best chance of success.

If you’re looking to improve the performance of your rent roll, here are three of the most important stats to keep your eye on:

• Percentage of rental properties in arrears: a high rate of late payments can indicate that your team doesn’t have an effective system in place for chasing up (and preventing) rental arrears.
• Average response times to maintenance requests: the longer it takes your team to respond to repair requests, the unhappier your tenants will become (and the more expensive these repairs are likely to be for your owners).
• The number of vacancy properties: high levels of vacancy can mean you’re experiencing high rent roll churn. If tenants aren’t renewing their leases, there might be an issue with the customer service your team is delivering to your rent roll, too. 

2. Use a tool that offers a single view of your stats

Tech is a smart way to streamline your operations as a property management team. But, using too many tools that don’t work together can make it difficult to get a single view of how your rent roll is performing. 

That’s why it's essential to find a truly all-in-one tool that offers a centralised dashboard and real-time access to data about your properties under management. 

Rather than inputting data manually or relying on integrations, a streamlined platform can help you get an instant insight into your rent roll and any trends that need to be addressed. 

3. Draw insights and learnings from your data

Now, it’s time to push this data to work. The best real estate agencies don’t simply create reports and gather data: they analyse the numbers and figure out what these metrics are telling them. 

That means identifying trends in the numbers you’ve gathered and drawing insights and conclusions from your data. 

• Are your tenants waiting too long to receive a response from your property managers?
• Are your team proactively starting lease renewals at least 90 days ahead of lease expiry? 
• Are your properties being leased out at the right price? 

By interpreting your results and making recommendations, you can put a practical action plan in place to optimise your operations and get your rent roll working harder for you. 

While real estate has been slow to embrace the digital revolution, things are changing. Now, customers are expecting interactions to be easy and happen online, whether that’s signing a lease, booking an inspection, or sending a message to their property manager after hours. 

Agencies that want to stand out, gain market share and grow their business need to make sure they’ve got the best tech by their side to make it happen. With the right insights, tools, and people powering your operations, you’ll be able to grow your rent roll and ensure it’s working as hard as you do for years to come.