Cashflow Estimation Model Enabled Increased ROI for a US-based Property Management Firm

Business Objective

Our client is a leading property management firm involved in buying and selling of Single-Family Homes to Retail and Institutional buyers.

The Client wanted to perform a comprehensive analysis and arrive at a solution to estimate cash flow for Rental Homes as a means to maximize their return on investment. They wanted the solution to also be able to estimate non-payment risk for each individual as well as estimate the maintenance cost associated with each property.

Solution Methodology

Cleaned and collated demographic, census, crime rate, neighborhood, cost of the materials, age of the building, maintenance records, and spatial/location data
Maximized rental income by estimating vacancy as a function of rent using linear regression
Estimated non-payment risk probability for a property by a linear and logistic regression hybrid model
Estimated cost of maintenance using ARIMAX time series model
Optimized and classified properties using the above 3 model outputs into high/moderate/low ROI buckets

Business Impact

Using rental, maintenance history, macro-economic and demographic factors, accurately identify property investments across geographies as well as classify them into high, medium, and low ROI categories to help the client tap into opportunities that would enable quick and improved ROI

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Cashflow Estimation Model Enabled Increased ROI for a US-based Property Management Firm

Business Objective

Challenges

Solution Methodology

Business Impact

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