meta name=»title» content=» How to measure the results of your real estate business.»

“ 05

ENE

How to measure the results of your real estate business

Indicators to measure the results of your real estate business

There are many and diverse indicators that can help you measure the performance of your real estate, such as the number of properties sold per broker, or the average time needed to get a sale. To decide which ones to give importance to, you need to first define your goals.
Analyzing the performance of your real estate or your campaigns will be useful to define what actions you must carry out to achieve your goals. If you donot have a horizon in mind, you will not know which indicators to focus your attention on and performing this type of analysis will be of little use.
On the other hand, the metrics you choose to look at can come from different areas. In each case they will provide you with specific data aimed at making more general or more specific decisions.
The three areas that we will see in this opportunity are:

Performance indicators of your real estate
Marketing campaign indicators
Real estate market indicators

In this tour we will first see what KPI indicators are, what is their importance and howto define them. Then we will teach you how to measure and interpret the metrics of your business. To close, let's see what are the most important points to pay attention to in your real estate and in the market when making decisions.
In this article:

What is a Real Estate KPI?

A KPI (Key Performance Indicator) is a key metric you should look at to evaluate your real estate company's performance.
The idea of a KPI is that you focus on a specific piece of data that is fundamental to understanding the performance of your business. A basic example for any company is the balance of income, observing if they grow, fall or reach a deficit. In this area, other common KPIs are the number of sales, the number of properties captured or the average time of sale.
Generally, when performing an analysis, 4 or 5 KPIs are selected since the growth, or not, of a business does not depend on a single variable. The chosen indicators are personalized, that is, in each case different variables can be taken. Our recommendation is that you choose the metrics according to your business, do not copy someone else's data because they may be irrelevant in your case.

Why is it important to measure your KPIs?

Using this type of indicators to know the performance of your business will help you specifically in 3 areas, fundamental for the growth and sustainability of your business:

Know the current status of your real estate: Your KPIs must be measured in real time and updated as much as possible, daily. This will give you a reliable look at the present of your company, which is essential for quick decision making.

Understand the evolution of your business over time: Seeing the results obtained over periods of time will give you a realistic perspective on its growth, stagnation or deterioration. It is also a good way to observe the pace at which this happens and determine if the scheduled goals were met.

Project your business into the future: Seeing how your real estate is evolving and knowing how it is in the present, will not only give you an approximate vision of what can come forward, but will help you define what direction to take. In addition, in case of finding negative results, you will have the opportunity to carry out measures to reverse them.

How to define your KPIs: Set your goals!

As we saw above, KPIs vary depending on the business. This is because not all data has the same relevance in different areas. In addition, to define which metrics to pay attention to, you must take into account your objectives.
Depending on the characteristics of your real estate, what working methods it has and what its future goals are, its KPIs may vary. Let's look at 2 examples:
1. A technological real estate, focused on digital growth, portals and social networks, can aim to generate content and increase web visits. A KPI could be the number of visits to your posts.
2. A traditional or neighborhood real estate could have objectives such as increasing the number of sales per broker, or decreasing the average time of sale of a property. A KPI would be average sales per seller.
Ultimately, there are certain KPIs that can be maintained in every real estate business, since the end goal is more or less always the same: the acquisition and sale of properties.

How to measure your real estate metrics?

Now that we've seen what a KPI is, what its importance is, and how to define them, let's talk about two tools you can use to measure your metrics: the data dashboard and the conversion cone.

Data dashboard: Visualize your KPIs

The data dashboard is an excellent tool to easily and quickly visualize the indicators you want to analyze, especially when you are going to handle a lot of information. The idea is that you capture the data and metrics you choose, so you can understand them at a glance. For that youcan use double-entry boxes and different graphics.
You can use different programs or extensions such as Google Spreadsheet connected to Google Analytics or Google Data Studio. This is an indispensable tool if you intend to study your KPIs, with the advantage that it will allow you to understand the information better and faster.

Our recommendations:

Try to make it visual, easy and simple to understand r, but do not overdo it with the colors. Choose 1 or 2 that mark specific issues (Example: red when a variable falls).
Take advantage of the tools that the different programs give you, to speed up your work, for example the conditional formatting, the filters or the automatic calculations offered by the Spreadsheets.
Try to update the data as often as possible, ideally 1 time a day, to avoid forgetting.

Performance indicators of a real estate agency

We already saw what KPIs are and two important tools to measure the metrics of your real estate. Now and to close, we only have to see what are the most important indicators in the real estate sector, so you can measure the performance of your business.

Indicators of a real estate business

There is a lot of data thatyou can observe in a real estate agency to evaluate its performance. Some of the indicators that we are going to name below, are usually reflected in the reports called 10K, where publicly traded companies show their results annually. Reading these reports can be interesting to understand the workings of the real estate market and learn about the competition.

Sales by agent
Average time to sale
Creation of offices and incorporation of new agents
Number of properties in portfolio
Most successful office sales
Number of countries in which it has a presence
Revenue vs. Expense
Percentage of sales within total market transactions

In addition, in the 10K reports, each company publishes what its differentials are, that is, its strengths, to communicate it both to its customers and to those who work in them.

Indicators of a marketing campaign

It's important to keep these metrics in mind, so you can see if your campaigns are succeeding or not. This is especially important given that these types of actions usually involve an investment, and you should consider whether you are going to maintain, increase or decrease it based on its efficiency.

Number of views (in videos, photos, posts, etc.)
Number of interactions
Call to action success (how many audiences are doing the action you expect, such as sharing your content or contacting you)
Conversion into sales
Ranking on Google or other search engines

Among these types of indicators are vanity metrics. They occur when an action has an apparent great success, but this does not translate into the actions that really matter to us. For example, a video can have 100 thousand views, but only generate a few contacts.