Organizations are constantly seeking new ways of leveraging data to guide strategic decision-making and increase returns on investment (ROI). One of the areas of investment that benefits from a data-driven approach is real estate. To explore the impact data science can have on this form of investment, we partnered with Haystacks, a real estate investment strategy company. We developed an innovative approach focusing on the interplay between investor portfolios and Points of Interest (POIs) in real estate areas.
Home Mortgage Disclosure Act Data (HMDA)
We leverage points of interest (POIs) and their correlation with zip codes as proxies for demographic insights to match investors' portfolio preferences. POIs, which can range from businesses and amenities to landmarks and entertainment venues, reflect the characteristics and preferences of the local population dictated by market demands. Analyzing the distribution and types of POIs in a given area can give us a thorough understanding of the target audience and their preferences.
The rationale behind using POIs as proxies for demographic insights is that businesses invest considerable time, money, and research into understanding their target market before deciding where to open new locations. In the case of larger businesses, they possess proprietary data like customer profiles, buying patterns, and market trends, which help them identify areas with the highest potential for success.
Businesses select locations in proximity to their target demographics. If these target demographics line up with an investor's portfolio demographics, then that area could be a viable investment. Conversely, if a business closes, it may indicate shifts in demographics or market conditions. By piggybacking on businesses' extensive research and expertise, we can tap into this valuable knowledge, creating a symbiotic relationship with an investor's profile.