You need more information, not more data.

With the sharp rise of prop-tech over the last decade, we’ve seen the real estate industry spend a lot of time on the idea of leveraging data to make better investment decisions. But as those of us in the space know, the real estate industry has been notoriously slow at actually doing this.

Real estate professionals may say they want to use data to drive decisions, but in my experience, more often than not data is used to justify a decision rather than inform one. To this day, many investment decisions are still driven by a gut feeling. That gut feeling can come from experience, it can come from visiting a location, and it can come from any number of factors not rooted in data.??

Relying on a gut feeling to make decisions is a symptom of a larger set of problems: difficulty accessing the data you need and inability to leverage data in a way that serves the user. Without solving these problems, real estate investors will ultimately end up passing on good deals, making bad deals, or losing to the competition. Data-driven organizations are three times more likely to report significant improvements in decision-making compared to those who don’t.

Here’s how the real estate industry can begin to solve these problems and change its relationship with data.

Avoid the confirmation bias trap.

When data is hard to access, it’s easy to fall into the trap of making a decision and then using whatever you can find to support it after the fact. There is little incentive to make data the basis of your decision-making process when it’s too difficult to find the information you need.

While there are plenty of tools to find and access different real estate data sources – from foot-traffic data, to rent comps, to flood map data – most of these tools require you to download the data from proprietary services such as Census or BLS or limit you to only working within their interface.

In addition to these external data sources, teams are collecting data every day from internal workflows. The combination of these sources can provide valuable information that has the potential to inform decisions, not just support an IC memo.?

It is critical for real estate organizations to examine if and how their data sources are easily available to the entire team

Transform data into information.

Next, real estate organizations must evaluate whether their data sources and tech stack are working together to produce information that is useful to the entire team. If team members have to become data scientists in order to answer simple questions such as “what is the population growth in a city,” your tech stack is not working.

That’s where purpose-built cloud platforms come into play. They can unlock the ability for teams to turn data into information and make it accessible in a way that is natural to users. Building a data warehouse is no longer enough, you need to find a way to enable your users to interact with the data and ultimately turn that data into information they can use every day.

For real estate organizations to remain competitive, they must transform data into actionable information quickly, efficiently, and at scale.

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