TMCnet Feature
July 10, 2020

Taking a Closer Look at Investment Analytics

Data has transformed the way that decisions are made in today's business world. In the past, decision-makers often relied on basic research or even their personal instincts when buying and selling investments. Today, an enormous amount of data is now available, and investors can use this information to make decisions with a high degree of accuracy.

Investment analytics tools enable modern data to be utilized in a way that helps investors to predict the outcome of their decisions. To remain competitive in today's world, investors need to understand how to make full use of analytics to make decisions better than their competitors.

What Is Investment Analytics?

Investment analytics aims to examine data about real estate, financial instruments, and commodities in a way that enables profitable conclusions to be made. Analytics tools often use sophisticated software behind the scenes to make powerful inferences. These tools are also usually designed to be easy for users to understand. Investors who use analytics tools, therefore, usually only need basic computer skills to make use of this powerful functionality.

Analytics Can Improve Pricing

Pricing is one of the most important applications for investment data analytics. In the investment markets, price is usually an extremely important factor since investors often prosper or go bankrupt based on very small margins. Consequently, analytics is crucial for accurately identifying profitable deals.

Investors can use analytics tools to determine whether they should buy an investment at a given price point. Analytics can, therefore, be a critical tool for identifying properties that might be mispriced. Investors can also use data to set their price floor before going into negotiations over an asset. Investors can even use analytics to set the right list price for their holdings and to determine whether an offer should be accepted.

Matching Loans to the Right Assets

Analytics can also be used by both borrowers and lenders so that loans can better match the nature of assets that are being purchased. In real estate, loans need to account for a borrower's ability to pay and the nature of the asset that is being purchased. For example, the analytics used by Lantzman Lending helps match loan types with real estate investments. In this way, lenders are able to offer more competitive rates while also enjoying higher margins by minimizing defaults.

Choosing the Right Customers

When selecting applicants for a rental property, investors can use analytics to identify the most profitable options. Analytics can reveal which buyers match the characteristics of customers who would be willing to pay a premium. Additionally, analytics can help property owners to select customers who are less likely to default or experience difficulties when making their payments. By having the tools necessary to identify more profitable customers, investors can market more effectively to target buyers who correlate with a higher return on investment.

Better Appraisals

More rapid decisions can also be made with the help of modern analytics tools. Therefore, investors can appraise properties faster than their competitors to close deals before other potential buyers have a chance to react. In this way, investors can obtain a higher volume of excellent deals to enjoy greater profitability and more scalability. Analytics also makes appraisals and property inspections more accurate so that investors can make more money by avoiding bad deals.

Competition Monitoring

Analytics tools can even be used to monitor your competition to learn from the successes that other companies are having. Additionally, competitive monitoring can be used to discover opportunities that can be beneficial to your business. Furthermore, many of the businesses that you compete with are likely to already be using competition monitoring tools, so using analytics tools to understand what information other companies have about your activities can also be very useful for your business.

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