There is enormous pressure on real estate analysts to efficiently and consistently sort through and present the type of trustworthy information that enables their companies to do deals with confidence. But the sheer volume of data can be overwhelming, forcing analysts to spend an inordinate amount of time on tasks that feel administrative. Real estate technology tools (commonly referred to as PropTech or CRETech) can be invaluable, but analysts often feel threatened by these tools. Will technology ultimately make their jobs obsolete?
Bottom line: no. Real estate technology can alleviate the monotonous work and allow analysts to spend more time on what they do best: employing their judgement and creativity to make confident recommendations. No matter how sophisticated a technology is, there’s no substitute for a skilled analyst.
Here’s how PropTech can help analysts do their jobs more efficiently, and how analysts can convince management to make the investment.
Save Time, Underwrite More Deals
Analysts typically spend huge amounts of time reviewing and vetting properties that are never brought to the investment committee. Today, there are more sources of economic and demographic data than ever before and sorting through it can be a nightmare. Predictive analytics tools allow analysts to review and vet hundreds of properties in a fraction of the time it would take them to perform those tasks the old way. Analysts are freed up to review more deals and to focus on the complex details that require human eyes and intellect.
Make Quicker Decisions
When it’s Friday afternoon, the last thing you want is for an offering memorandum to be slid across your desk. But it happens, and you would typically be faced with a late night, hunched over your keyboard. With new tech tools, late nights may be a thing of the past, as PropTech can reduce hours worth of work to minutes. Gathering comps and underwriting more efficiently will enable you to make recommendations faster and, hence, give your firm a leg up on the competition when it comes to responding to time-sensitive opportunities. There are many platforms that make sophisticated statistical analysis intuitive and accessible enough for even junior analysts to use efficiently.
Increase Confidence in Your Assumptions
It's one thing to say "I believe the value of the property is X" but to have another source back you up adds credence to your argument. Additionally, technology-driven analysis can also serve as a tiebreaker if there are disagreements about a deal.
Discover New Opportunities
No analyst can be an expert in every market. When doing analysis in an unfamiliar market, tech tools can boost confidence by serving as a “second opinion” on the analysis that’s been completed in the standard way. New tech tools can also open up new ways of looking at data, which can lead to new insights. For example, in research conducted for the National Apartment Association, Enodo found that a pool is worth a $24.65 rent premium in Austin and a $52.85 premium in Chicago. Insights like these wow not only investors, but bosses.
Ultimately, the best PropTech investment is one that solves a specific problem, whether that means allowing a firm to be more nimble about responding to opportunities, increasing the number of deals a firm can analyze, or enabling faster and more accurate data analysis by increasing work volume and decreasing administrative tasks. The goal for every firm should be to beat the competition and, increasingly, analysts will find that strategic use of technology tools is the way to achieve that goal.