The property market in London is constantly evolving. The economic growth, housing supply and demand, inflation rate, property values, household income, mortgage interest rate, tax rules, government policies and even upcoming elections are factors that can affect the movement of the real estate industry.
As a property investor, it’s up to you to keep up with all these changes because everything that happens to the market will affect your portfolio. Whether that’s good or bad will depend on how you react to these changes. You need to learn how to analyse the factors affecting the market movement so your portfolio to benefit from it.
That involves going through a huge amount of information - both historical and real-time market data. The historical figures will help you assume where the market can turn. The real-time market data is crucial to confirming if that movement will happen.
If you learn how to analyse real-time market information, you can even predict when certain movements will happen. This will give you enough time to make informed decisions so you can position your portfolio to benefit from the next movement of the market.
In this article, you’ll get a deeper understanding of how data analytics can help property investors achieve growth. You’ll also get the 6 property market
The Role of Data Analytics in Property Investing
To understand the role of data analytics in property investing, you need to answer one important question.
What is market data? This refers to information about the real estate market that focuses on property pricing, tenant preferences, housing statistics, and many more. This information helps property investors decide on how they can increase the return on their property investments.
Data analytics is all about scrutinising relevant market information so property investors can get the best deals out of the London property market. For instance, a careful analysis of the rental prices in the best neighbourhoods in London will allow investors like you to set a competitive price for your portfolio. You’ll end up with a fair price that’s not too high to turn off residents and guests. It’s also not too low that you fail to maximise the earning potential of your property.
The study published by Deloitte.com reinforces the idea that data in the real estate market should be treated like gold. The research mentions that knowing how to use property data profitably can help you position yourself to succeed in future endeavours.
The research also states that service providers in the real estate industry are currently sitting at a huge source of data. This is exciting for property investors and property management companies because it implies that they have access to a reliable source of information - residents and guests. By using data analysis, one can position their property at a competitive advantage. It’ll allow property management companies, in particular, to set up data-driven services that can increase living experiences and lower turnover rates - which can effectively maximise occupancy rates and stabilise rental returns for property investors.
6 Property Market Data that Affects a Portfolio’s Growth
To be strategic in your data analytics, you have to keep an eye on real-time market data. This refers to current information from reliable and reputable sources. Technology has transformed property letting in ways that make it easier to gather information. Data technology has given us the ability to manage and interpret huge quantities of data conveniently.
With the right data in your hands, you’ll feel empowered to make decisions that will propel the growth of your portfolio. Among the information that you should monitor, there are 6 property market data that you should keep an eye on to position yourself at the forefront of the market.
Property valuation
This data focuses on the numerical worth of a real estate asset at a specific period. You need to monitor this regularly because the dynamic nature of the property market means the value of your portfolio will constantly change.
Knowing your property’s worth will help you identify your portfolio's capital gains. Use a capital gains calculator to determine how much your investment has grown since you bought it. So if a property is worth £500,000 when you bought it but after 3 years, it’s not valued at £550,000, then the capital gain is £50,000.
This information will allow you to strategise how you can grow your portfolio further. You can understand the current property price trends and determine the rental rate of your units. Or you can decide if you want to renovate the properties to increase their value.
Location
The location of a property has a profound impact on a rental property’s performance. So if you want to increase the returns from your property investment, pay attention to the opportunities presented by the location where your assets are. If you study the map of London neighbourhoods, you’ll notice that the potential of each location will vary. From the property prices to the type of residents and guests that your properties will attract - these will be affected by the dynamics of the local community.
Not only that, monitoring the locations of your property assets will help you spot upcoming developments. If there are new attractions of infrastructure developments, these can boost the value of your property. These are worth keeping an eye on because they can help you time the increase in your rental fees. Use these as cues to give your properties an upgrade to match the current value of the surrounding community.
Economic and demographic trends
This particular data influences the preferences of potential residents and guests. For instance, an economic crisis would affect property affordability. The inflation rate can also compromise the ability of existing residents to accommodate higher rental charges.
There are also specific trends that can affect the lifestyle preferences of renters. The growing concern towards global warming increased the number of eco-conscious residents. To meet their preferences, you’ll have to install energy-efficient lights and appliances. Putting plants around the flat will also appeal to their eco-friendly ways.
Another trend that you can pay attention to is the prevailing remote work trend. Providing enough space for a home office would appeal to freelancers, remote workers and even business travellers.
Pricing schemes
Just like how property values change constantly, you can expect the same behaviour when it comes to housing prices. This is for both selling prices and rental rates. As a property investor, it’ll do you good to monitor the current pricing trends so you can come up with pricing schemes that’ll benefit your portfolio.
You’ll get this data by comparing your properties with similar ones in the same location. This will allow you to set an attractive rental rate while maximising the profit potential of your properties. You can increase profitability while staying competitive.
Marketing strategies
By understanding the preferences of your target guests and residents, economic trends, rental prices, etc, you can come up with a marketing strategy that can increase the occupancy rates of your property investments.
For instance, you renovated your property to be more sustainable and eco-friendly. That means you want to attract eco-conscious guests. When marketing your property, you should highlight its eco-friendly features. Or if you want to attract business travellers, post photos of the unit that highlights the home office corner that the guest can use.
Your knowledge of the market trends will also help you use flexible letting strategies efficiently. You can determine if it’s time to do short-term or long-term letting.
Financial risks
The dynamic property market increases the risks on your portfolio. As a property investor, you should realise that you can’t keep financial risks from affecting your portfolio. But with the right data and by strictly monitoring the market, you can minimise the risk on your investments.
By accessing real-time property market data, you can create a shield that can minimise the financial risks on your properties. For instance, the crashing housing prices will allow you to proactively adjust your strategies to protect your assets from the market’s movement. You can use it to identify the investment prospects that you can use to expand your portfolio.
Make sure you monitor real estate listings, demographic trends and historical property sales so you can see how the market will turn. You can adjust your rental prices or marketing strategies to continue to maximise the earning potential of your properties.
Use Technology to Achieve ROI from Property Investments
The huge amount of real-time market data can be overwhelming. But thanks to technology, property investors can now analyse real-time market data with a few clicks of a button. There are advanced software programs that provide comprehensive tools to analyse data and give you reports that can be used to make informed decisions.
These programs can gather huge amounts of data and filter them according to the parameters that you’ve set. You can generate reports based on these findings so you only get the information that you need at the moment. It eliminates confusion because you only have to look at data that’s relevant to what you have to decide on.
What’s great about the Internet is it gives us access to both historical and real-time data. Government agencies provide monthly and quarterly economic reports that are drilled down to every neighbourhood. You can be as specific as you can with your research and you’ll get the latest updates online.
With the power to get specific information comes the ability to be strategic with your decisions. This increases the chances of reaching your portfolio goals and ROI targets.
You can take this one step further by using the right tech platform that focuses on gathering relevant data for property investors. There are property management companies like Opago that offer a platform where investors can upload and manage their properties. From scheduling, billing and analytics, you can get an overview of the property’s performance. The real-time data that you’ll get from Opago and your knowledge of the current market conditions will give you actionable insights to reach maximum portfolio growth.
Get Property Investment Tips from Property Experts
The importance of real-time market data can’t be undermined. As a property investor, you carry the burden of making the right choices so you can make your portfolio grow despite the dynamic property market. That’s only possible if you make informed decisions using real-time market data.
Fortunately, there are ways to gather the relevant and timely data. You can partner with property management experts like Opago who uses data-driven strategies to maximise the earning potential of the properties they manage.
By partnering with Opago, you’ll get a wealth of tips that can help grow your portfolio while gaining access to its state-of-the-art platform. Through this platform, you’ll get real-time data about the performance of all your properties - giving you the ability to make timely decisions to expedite the growth of your portfolio.
This platform is given on top of all the other property management services that Opago offers: from housekeeping, guest services, compliance and maintenance. Find out more by consulting with Opago’s property experts.
