This is the first in a two-part series on predictive analytics. Be on the lookout for part two that discusses the various use cases for predictive analytics in the multifamily industry coming soon.

One of the hardest parts of running any successful business in any industry, but especially in multifamily, is planning for the future. Because the job market and housing market go hand in hand, there are a lot of factors that go into determining demand so it can be especially difficult to know what will demand look like next year, five years from now? What markets should I be entering, and/or exiting? Where should I spend my marketing dollars to get the best results?

These are questions, among others, that PMCs have to continuously address. Because there are so many dependencies that other industries likely don’t have to think about when forecasting demand, you shouldn’t be afraid to take advantage of every tools you have available to you. If you’re an industry veteran, your instincts have served you well up until now, but as AI continues to advance, there are new tools that will significantly improve your planning, forecasting, and decision making. Specifically, we are talking about predictive analytics.

Data analytics is “the practice of examining data to answer questions, identify trends, and extract insights” to improve strategy and help businesses make the right choices. When it comes to predictive analytics, it helps answer questions about what to expect in the future.

Predictive analytics differs from business intelligence in that it not only identifies trends, but makes recommendations on how to proceed, whereas business intelligence aggregates large data sets and visualizes the data to give you a better understanding of what has happened. Simply put, business intelligence gives us a view of the past and predictive analytics provides a look at the future.

What you need to know before getting started

To ensure a successful AI and predictive analytics implementation, it’s paramount to have access to quality data and have that data organized in a way that allows it to be effectively leveraged. Having access to all relevant data in one place and configured in a way that it can easily be accessed is the best way to give you a holistic view of your property performance.

Another thing to consider is hiring consultants or dedicated data scientists to operate data analytics and predictive analytics programs. Even better, look inward to identify if you have someone already on the team that is familiar with your business and also excels at digesting data and making good use of it. Putting together an effective process can be complicated, it doesn't hurt to have experts in the building or train capable employees who are up to the task. Now instead of relying on your gut feelings when making decisions, you’ll have the data to back up your decision making process and will be well on your way to make more effective decisions.

When implementing predictive analytics at your properties, it’s imperative that the regional and site teams trust the data output and are willing to accept the recommendations and take action on those recommendations. If faith in the data team is lacking, that could sink your program before it even gets started.

Learn more

Request a demo today to learn how Entrata uses predictive analytics to help improve decision making across an increasing number of scenarios or download our latest ebook today!