How location data is reshaping the real estate industry?
Real-time location data is at the cusp of the digital revolution. Gone are the days when land investors rely on real estate agents completely for their expert advice. With the humongous data available on the Internet, investors are now able to access real estate data, spatial data, etc. at their fingertips, making them more demanding than ever before.
For the real estate industry, “location” is the most important factor — whether looking for a place to live or set-up a workplace (commercial properties). With rising advanced technologies, real estate professionals are now looking for more robust data models, extensive datasets, in addition to zip codes, areas, and cities.
Due to the pandemic, the real estate industry had been majorly affected resulting in office shutdowns, store shifts, and many more. However, location intelligence (LI) and geographical information systems (GIS) became the savior for this promising industry. By assessing the behavior and demographics of a place, location analytics help you to seek answers for questions such as:
- Which site will drive better returns?
- Where to invest?
- What are the emerging consumer trends?
- How can one minimize risks and optimize real estate operations?
Let’s take a look at how Location Intelligence (LI) is transforming our way of life, specifically to one of the prime sectors — the real estate industry.
Every site or building has a specific boundary, coordinates, and locality surrounding it. As a property investor or a buyer, it is important to understand the “why” behind a location, instead of “where”. With accurate Points Of Interest (POI) and polygon data, it is easier to develop models and forecast real-world information through geographic information systems (GIS). To move deals faster, POI and location data can be a key differentiating factor to justify your pricing strategy, negotiate on sale or rental prices, and showcase the potential risks or growth of the property in and around the area.
As seen below, global commercial real estate investments have been declining since 2020 when the outbreak commenced and the industry observed a 29% fall in 2020, compared to 2019.
Such data help to derive granular insights about the steady shift from commercial to residential working patterns. Thus, while investing in a property, it is important to understand the neighboring workplaces, stores, malls, etc. the locale gender, attraction spots, and many more. Using location analytics, points of interest can be visualized and analysis on return on investment (ROI) can be determined.
Since the real estate industry is a primary growth factor in the economy of the country, it is mandatory to understand the profit, returns, and viability of the location in the long run. In addition to location data, other spatial information plays a key role in business analytics.
Opening a new store? Or building a hospital or school? Be it residential, commercial, or industrial plot, land, or a building, location data helps you to validate if the site selected is right and optimized. Factors such as connectivity, cost-effectiveness, socio-economic demographics, competitor presence, etc. govern the site selection process. Using the point of interest datasets and neighborhood trends, real estate developers can understand the catchment areas, locality patterns, consumer behavior, and many more.
For example, if an investor wants to build a restaurant at a particular point of interest, it is important to check the historical data of the identified spot, its price, the number of visitations, demographic information, consumer patterns, if it is a stand-alone site, or inside a mall. If inside a mall, what are the shops around the restaurant, can the footfall around have a positive impact on the restaurant, etc. Using location intelligence, real estate firms can go one step further and provide such spatial information to the investors that help them make a profitable decision.
Location data isn’t limited to commercial or industrial properties. Over 90% of home buyers start their search for houses online. Therefore, real estate agents can attract buyers by providing them with location options in various visual formats, as per their needs and requirements.
Competitive & consumer analysis
Understanding competitor, consumer, and market demographics are essential to drive growth and achieve goals. Using polygon data from Xtract.io, geofences can be created around the competitor’s site that help us to gain insights about the consumer traffic, their dwell time, purchasing patterns, etc. With this data, real estate experts can devise location data marketing strategies to attract foot traffic by sending push notifications to the target audience. To stay ahead in the competition, real estate agents also adopt hyperlocal marketing.
What is hyperlocal marketing?
Hyperlocal marketing is a process that capitalizes on the “near me” searches to target potential consumers in a specific geographical area or neighborhood. For example, when you ask Google “Gyms near me”, all the gyms around your location are listed for you. These businesses are listed because they have optimized their online presence with location-based marketing campaigns. Hence, Google ranks them on top. This type of marketing yields higher returns as a searcher with a “near me” query has higher intent to purchase or visit the specified location.
Location datasets also help in estimating the underserved areas and planning development across those. For example, Esri estimates that 90% of the US population lives within a 10 min drive to a grocery store. Therefore, it is easier for builders and investors to analyze the proximity and accessibility of a location while building a community or a locality. Accurate and precise point of interest data reveals where people are most likely to pass and how easy it is for them to get there which helps investors make a cost-effective decision.
The future of real estate service providers
Location intelligence, thus, enhances the decision-making process, mitigates risks, and improves the yields of investment operations. At Xtract.io, POI and polygon data are available for 11 diverse industries such as retail, food and dining, automotive, and many more. If you want to be at the forefront of your industry it might be a good time to ask what location intelligence can do for you.
Originally published at https://xtract.io/blog/3-ways-poi-data-is-transforming-real-estate-businesses/ on December 21, 2021. Check out our blog to read more articles and follow us on Twitter or Facebook.