No matter if you’re a total beginner or a seasoned veteran, dealing with real estate can often be overwhelming.
This applies to everyone involved in the industry – agents, investors, developers… you name it.
But, what all of them have in common is the use of real estate metrics dashboards.
These dashboards have become the go-to tool for real estate companies around the world that want to make data-driven decisions by analyzing the most important real estate KPIs.
While this sounds great on paper, you won’t be able to take full advantage of real estate dashboards if you’re not sure which KPIs and metrics should be included.
And that’s exactly what we can help with.
In fact, we even conducted a survey between real estate companies and asked them to elaborate on which real estate metrics they use and why.
For added context, we surveyed 20 real estate businesses and 4 agencies/consultants.
- What Are KPIs in Real Estate?
- What Is a Real Estate Metrics Dashboard?
- 17 Most Important Real Estate Metrics You Should Track
- Streamline Your Real Estate Reporting Processes with Databox
What Are KPIs in Real Estate?
Did you know that the total value of global real estate reached a mind-boggling $326.5 trillion in 2020?
This number alone makes it one of the biggest industries in the world.
Because of this, the vast majority of market participants nowadays make measuring real estate business performances their top priority.
One of the primary ways they do it is through real estate KPIs.
Real estate KPIs are quantifiable measure units that are used for analyzing real estate-related business performances.
Market participants use real estate KPIs for each separate business segment, starting from property investment potential and all the way to individual agent performances.
The information and data that you acquire through real estate KPIs can later be used for improving strategic decision-making, identifying weak spots, and improving overall business outcomes.
While some think that these KPIs are simply for staying on top of property sales data, they actually drill down into much more detail.
For instance, they capture everything related to leasing, management, and real estate property development as well.
No matter if you’re a developer, investor, business owner, or an agency realtor, you’ll need to track real estate KPIs to understand what’s happening behind the “bricks”.
What Is a Real Estate Metrics Dashboard?
If you already work in real estate, we don’t have to tell you about the gruesome process of going through large data sets each day.
Sales, rental revenue, commissions, market property duration, payback periods, etc.
You know the struggle.
But, there is one thing that can eliminate these struggles and simplify the entire process – a real estate metrics dashboard.
A real estate metrics dashboard captures all of your crucial real estate data in one place and it updates it in real-time.
This helps you identify areas that need to be improved, monitor trends over specific periods, spot patterns, acquire performance snapshots, and save up lots of valuable time overall.
Let’s say that you need an overview of quarterly average sale price variances.
At the same time, you also need to check the number of visits per sale and the average price per square foot.
Now, sprinkle in the dollar value of sold listings and sales by region.
Getting tougher and tougher to keep track, right?
That’s exactly why a real estate metrics dashboard can be so useful.
Over the last few years, real estate metrics dashboards have become pretty widespread across market participants around the world.
In fact, all of our respondents are dashboard users: majority of our respondents have been actively creating and using dashboards for some time – 21 of them, while 3 have just started using them.
When it comes to specific software, the real estate companies we asked use quite a few dashboard tools – Databox, Google Analytics, Excel, Follow Up Boss, Tableau, Plecto, Realeflow, Xome, etc.
For example, Eyal Pasternak of Liberty House Buying Group shares: “I am currently using Databox in my business. The best part about this tool is that it collects data in one place and organizes it in the form of graphs and charts. As a result, I can understand key metrics at a glance. It also allows me to learn where I’m lacking and develop targeted strategies to improve accordingly.”
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Most Important Real Estate Metrics You Should Track
If you don’t have any prior experience in dealing with a real estate metrics dashboard, you’ll probably find it hard to pinpoint which metrics you should track and why.
With so many useful real estate metrics to choose from, you might even be inclined to throw in a whole bunch of them and take it from there.
This is a huge mistake.
Instead, it’s much more efficient to set a specific goal and then cherry-pick the most important metrics that you’ll include.
The list of KPIs that our respondents include in their dashboards is very extensive: top mentioned are Return on Investment (ROI), Tenant Turnover, Payback Period, Operating Expense Ratio, Equity to Value Ratio and Revenue Growth.
Overall, our respondents mentioned about 40 different KPIs.
Now, we know what you’re thinking – “how does a list of 40 different KPIs help me make a choice?”
Well, it doesn’t, which is why we’ll get even more granular.
To be precise, we’ll divide these important metrics by roles:
- KPIs for Real Estate Investors
- KPIs for Real Estate Agents
- KPIs for Real Estate Developers
KPIs for Real Estate Investors
When they hear the term ‘real estate’, most people automatically think of buying a house to live in.
But the market consists of much more than just that.
One of the largest real estate businesses is property investment and renting that property for a profit.
If this sounds an awful lot to what you’re doing, then you should always check out these real estate investment KPIs before you decide to invest in a property.
Here are the most important metrics real estate investors should track.
If we were to measure real estate metrics by importance, the payback period would undoubtedly find its way on the top of the list.
The payback period KPI showcases how many years it will take for you to pay back the initial amount you invested in a specific property.
When analyzing potential properties, this is one of the first metrics you should consider.
Josh Blackburn of Evolving Home says, “Payback period is one of the most crucial KPI to include in a real estate dashboard. It is the first investment metric that any realtor should be mindful of when screening potential properties. This will determine the length of time it will take for a property to give a return on investment. It will also breakdown the annual earnings from the project to better illustrate how profitable a transaction is. This is a metric that should not be overlooked because in real estate, time means money, so it is important for realtors to be mindful of their calculations on time and its corresponding monetary value.”
Tomas Satas of Windy City HomeBuyer seconds this and mentions a few more metrics that work for him, “The payback period on all new rental properties is the most important KPI for me. This is the number of years that it takes to pay back the initial investment, and shrinking this period of time by any and all means nets me thousands in revenue. Second, ROI is everything. Without monitoring it closely I cannot make adjustments for new properties. Third, but as important as any other KPI, is tenant turnover. I have reduced my turnover rate more and more over the years, and my rentals are more and more productive as a result.”
Zach Tetley of Nexus Home Buyers added, “The KPI that has proven most important for my real estate business is the Payback Period. This metric determines the number of years it takes for a property to payback on the initial investment. It gives us insight if we should relay funds towards such property or advise the client against such a move. When advising our clients, we carefully observe the statistics of the locality and would such an investment fare well for our client.”
Return on Investment (ROI)
The best way to measure the profitability of your real estate investment is by checking the ROI metric.
In fact, it’s one of the most important metrics for any type of investment – business, stocks, mutual funds, etc.
You can also make use of ROI by checking how a specific investment has performed historically.
Jake Washburn of Win Win Home Buyers explains the importance of ROI, “As a local home buying business, return on investment is critical. We need to know how much sales or commissions were generated from our outbound marketing efforts. This allows us to allocate appropriate marketing spend per channel such as texting, cold calling, direct mail, RVM, and SEO. Without tracking sales by marketing channel we would have no idea which marketing is effective or ineffective and no company wants to waste money on poor performing marketing.”
For those of you who own several properties, the tenant turnover is a ‘must have’ in your real estate metrics dashboard.
Tenant turnover shows you the average tenant leaving rate.
As you can assume, you should strive for a low turnover rate since it means that your property is occupied and bringing money.
Real estate owners sometimes don’t fully comprehend just how much money they are losing in periods between old tenants moving out and new ones moving in.
Ben Wagner of Leave the Key Homebuyers says that tenant turnover should be calculated on an annual basis.
“Tenant Turnover is the most important KPI dashboard metric for our real estate business. It’s essentially vital if you own multiple properties. We can also attain the rate at which tenants are leaving. A low turnover rate is desirable for us since it means that the property is occupied and generating enough money. This is a high-level real estate KPI that suits best when calculated on an annual basis.”
Eyal Pasternak of Libertyhbg mentions it as a crucial KPI in her company.
“Tenant Turnover: If you want to have a new tenant then it can cost up to four times more than renewing the existing lease. It is therefore important to know the tenant turnover in order to measure the sustainability of your business. The average tenant turnover is 1 to 2 years in urban markets and 2 to 4 years in rural areas. If your turnover rate is much greater than the average, it is important to know the reasons that may explain this rate. Are rents too high for your market? Are the repairs up to date? Is the footfall rate satisfying? Why share this KPI? By Sharing this KPI with the investors you can explain the sustainability of your mall. Indeed, this data is a good way to prove the state of health of your structure. Internally, this KPI is also an easy-to-use dashboard and will be a motivating element to encourage your team to maintain a low turnover rate.”
Average Rent Price per Property
This is another crucial metric for all multiple-property owners.
It provides you with a clear overview of how much money each unit is bringing in. Later, you can compare the numbers with the last quarter or year to pinpoint important changes.
Operating Expense Ratio
Aside from learning how much money the properties are bringing in, you should also check out the costs of managing and maintaining them.
This will give you insight into whether there are some ways to better use your time and compare operational costs to rental income.
The ideal operational cost/rental income ratio is somewhere below 80%.
Repair and Maintenance Costs
Lastly, tracking repair and maintenance costs on a real estate metrics dashboard can ultimately lead to a decrease in expenses, which leads to more profit in the long run.
Mary Anderson of Brotherly Love Real Estate says, “Tracking repair and maintenance costs on a more granular level has dramatically increased our bottom line for our rental portfolio. For example, we now track smaller maintenance expenses, such as trash removal that certain tenants or neighbors do that we pay. We can now save more rental income by tightening up our expenses.”
KPIs for Real Estate Agents
Real estate agents are an indispensable part of the industry.
They represent buyers/sellers and connect them, help with the transactions and legal negotiations, and sometimes even work as property managers for certain clients.
Nowadays, you can find a real estate agent at practically every corner, but that doesn’t mean that each one is equally good.
To gauge the performance of a specific real estate agent or the entire office, here are the real estate KPIs that you should use:
Turning a profit is great – but it’s not worth much if you’re not continuously growing it each year.
That’s why you should monitor revenue growth on a monthly/quarterly/yearly basis and compare it to historical numbers and market conditions. This later helps you identify weak spots and boost overall growth.
Isaiah Henry of Seabreeze Management Company says, “Revenue Growth is the most important KPI to include in a real estate KPI dashboard. It’s not enough to turn a profit, you must continually be growing year over year. If you’re not growing, ask yourself why. Look at your other KPIs to determine where your weaknesses lie. Do you need to improve your conversion rate? Maybe your vacancy rate has increased? Your revenue growth gives you an overall picture of the health of your company. It’s vital to your success.”
Martin Carreon of Soco Wine Country Properties also had a few words regarding revenue growth.
“Revenue growth – Comparing your performance year to year is the most effective technique to gauge your income growth. With the help of data storytelling, you may determine with just a quick scan whether you need to step up your efforts or if your results are adequate. Sharing this information with your investors via an embedded or automated dashboard makes it easier to create reports, fosters teamwork, and upholds an open line of communication. The same data will be available to all representatives in real-time, facilitating communication and decision-making.”
Client feedback is valuable for both the real estate agent and the person assessing their performance.
For the agent, if the client was satisfied with the service, there’s a much higher chance that they’ll refer them to their colleagues. What’s more, great agents also get increased sales volume from repeat clients.
As for someone who is looking to hire a specific agent, they can use the client feedback metric to check out their previous performances and see whether they’ll be the right fit.
Anthony Minniti of Texas Land and Home states, “Client feedback is an important KPI that I include in my real estate dashboard. That’s because it’s the key to consistency, which is how I tend to create a loyal customer base. As a result, they tend to refer my services to others, which further helps me reach more potential clients. Additionally, client ratings allow me to strengthen my existing referral network, which is essential for new business opportunities. So, I consider past clients’ suggestions instead of solely relying on future trends. This has positively reflected on my customer relations and sales.”
Related: The Most Valuable Customer Service Interview Questions for Gathering Customer Feedback
Number of Active Listings
Active listings represent the overall interest that consumers have for a specific property, which makes this metric extremely valuable for real estate agents and offices.
Generally, active listings are determined by several factors like annual price increase rate, market visibility, etc.
Daniel Barrett of Adword Nerds talks about this in detail.
“I think the most important KPI we include in our real estate KPI dashboard is the number of active listings. Active listings represent the highest level of consumer interest for a given property, and therefore are extremely important. This can be measured through multiple methods, including but not limited to: the number of times that a property has been seen on the market, the amount that a property’s price increased during the past 12 months, as well as the average time it takes for someone to find the specific listing on Zillow and other online real estate marketplaces.”
Back in the old days, the word-of-mouth was the ultimate marketing strategy for aspiring real estate offices.
Nowadays, the focus is greatly shifted to examining website organic traffic.
By analyzing organic traffic on your website, you can assess your agency’s general brand awareness. Later, you should move on to conversion rates.
Iane Mance of Crown Asia explains the process in detail.
“In my experience, organic traffic is an important aspect of our KPIs since this determines how many people visit our website without the need for advertising. This gives us a sense of how good our brand is and about retention. As well, the conversion rate is also important. Everything is about sales and the more we convert the more we sell. Converting is a crucial step, and we optimize our conversion by properly identifying our target markets and doing everything we can to make them buy.
This is however one of our main problems as we get a lot of leads however only a small amount gets converted into sales. But I think it is normal for the conversion rate to be low as not everyone is the target market (based on ours) and only a few have the capabilities to buy our products since we provide high-end homes in themed communities in the Philippines. We also use our dashboards to compare ourselves to our competitors based on their digital performance.”
Related: 15 Tips for Setting Realistic Website Traffic Goals
The Number of Calls
Including the total number of calls in the real estate metrics dashboard should be a top priority to every real estate agent.
This provides an overview of how many people that are interested in selling called, how many appointments have been set, and whether there were any purchase offers.
For more granular data, real estate agents should go the extra mile and categorize the calls into different groups.
This later helps with lead-to-client conversion.
Dustin Fox of Fox Homes explains, “The number of calls: Recording the total number of calls helps the agents make necessary assessments. Some of them include the rate of successful calls, potential buyers, interested buyers, etc. these numbers have a lot to do when they are segmented based on location, age, gender, and so much more giving further insights on whom the target clients should be. Real estate agents can increase efficiency in their cold calling to reduce waste of time and resources. Responses to marketing activities: Each marketing activity is different with separate categories of clients to attract. Real estate agencies with several marketing initiatives should keep track of the response rates and why. Better leads are within this widespread data waiting for the agents to catch on. Failing campaigns suggest the need to change strategies and client approaches.”
Warner Quiroga of Prestige Homebuyets adds, “In our Real Estate business, monitoring the number of outbound calls is on top of our KPI tracker. It indicates how many dials have been made and the number of people the lead manager has spoken to. How many have shown interest in selling their homes, and how many offers and appointments have been made? These quantifiable metrics have been a great tool for us to track the leads, nurture them and eventually convert them to successful transactions. Using KPI helps the lead generation team know if they are reaching their target number of calls in a day or week. It helps them determine which methods are effective and which ones need re-evaluation. Besides that, KPI helps evaluate the growth compared to the previous measures. Using KPI helps the lead generation team know if they are reaching their target number of calls in a day or week. It helps them determine which methods are effective and which ones need re-evaluation. Besides that, KPI helps evaluate the growth compared to the previous measures.”
Scott Rubzin of Tiffany Property Investments LLC agrees, “The number of calls made is the most important metric I tend to include in my real estate KPI dashboard. That’s because this industry is quite competitive, and if you don’t go the extra mile, you’re not able to convert your leads into clients. Hence, monitoring the calls made throughout the day is essential to our lead generation strategy. I give my employees incentives to reach our reach targets for the weeks. It helps avoid any dry spell where we have no clients to deal with. They update their tracking spreadsheets, which helps me gain helpful insights on how to further improve our overall performance. As a result, our sales and productivity have been through the roof.”
Related: A Complete Guide to Sales Call Reporting: Benefits, Best Practices, and Ready-to-Use Templates
Number of Days on Market
Monitoring the number of days on market KPI is one of the best ways to stay updated on market conditions and find suitable properties for price negotiation.
For instance, if a specific property has been sitting on the market for a while, the seller might be inclined to give it away for a lower price.
Sales per Square Foot
Sales per square foot is one of the main metrics realtors use to assess the value of a property. Some of the things that affect the value include property location and layout.
Michael Green of Quick Cash Homebuyers talks about its importance in detail.
“The most important KPI for the real estate industry is sales per square foot. This metric shows how much revenue a property generates per square foot of land, which is an important measure of the value of the property. The more valuable that land, the more revenue it can accrue to us as the real estate agency handling it. Cost of sales is another important metric to include in your KPI dashboard because it shows how much money your company spends in an effort to make a real estate sale. It’s important to keep track of this metric and to minimize it as much as possible so as to maximize profits for the agency.”
KPIs for Real Estate Developers
Real estate developers are probably the ones that carry the highest risks in the industry.
Starting a project is by no means cheap, and developers should always conduct a thorough analysis of market conditions and overall project costs before making any further steps.
Let’s go over some of the KPIs that developers should include in the real estate metrics dashboard.
Internal Rate of Return (IRR)
To start a project on the right foot, each company should first examine the internal rate of return metric beforehand.
This KPI showcases project attractiveness and provides rough estimates on how much the rate of return would be if the net present value is zero.
Then, when compared to the company’s minimum rate of return, you can decide whether you should start with the project.
Real Estate Demand Growth
This metric focuses on market conditions and shows developers whether a specific region is in demand by customers.
Demand growth is one of the hardest metrics to create accurate forecasts for, but some of the factors that determine it include population trends and mortgage application numbers.
Construction Cost per Square Foot
As you know, before a buyer purchases a specific property, they want to know what the price per square foot is.
In parallel with that, developers want to know the construction cost per square foot before starting a project.
This is one of the most important metrics for project budgeting and setting property sale prices.
Interest Coverage Ratio
In most cases, real estate developers won’t start a project with the money they currently have. Instead, they’ll take out a loan.
The interest on the loan is the bare minimum of what they have to pay each month, which is why the interest coverage ratio is such an important metric to track.
It provides information on whether a company can cover expenses with potential earnings before taxes and interest.
Streamline Your Real Estate Reporting Processes with Databox
After going through our report, you should have a much clearer idea of which KPIs should find their way onto your real estate metrics dashboard.
However, that’s only one piece of the puzzle.
You’ll still need to invest hours into collecting the specific real estate metrics, categorizing them, visualizing them, etc…
This can all be avoided by using Databox.
You can streamline your entire real estate reporting process by simply connecting a data source, picking out the metrics you want to include, and then visualizing them with a click of a button.
If even this seems overwhelming, we have a plan B in motion – a free dashboard setup service.
Talk to someone on our team, explain what you want from your real estate dashboard, and let us do the rest.
Sign up for a free trial and take Databox for a spin.