Business Objective
Our client, a large apartment rental management company in the US wanted to determine rents, lease terms, and promotions using advanced analytics.
The client relied on an intuitive process to derive insights from ad-hoc analyses to run their operations. They wanted to switch to an automated advanced analytics framework that would help increase revenue and occupation rates.
Challenges
- Difficulty in accommodating macro-economic factors such as demand, supply, seasonality, etc., in addition to apartment features that influence the demand
- Difficulty in accounting for the impact of the availability of similar options in the market on the demand, as the data was not very robust
Solution MethodologyÂ
- Performed exploratory data analysis on existing data in line with business requirements
- Cleansed and collated 3rd Party Data such as macro-economic factors, number of vacant units, seasonal renewal rates, etc.
- Built econometric models to estimate the optimal rent for each apartment
- Designed and implemented business rules to optimize promotions needed to lease the unit within a specified amount of time
- Developed a custom Excel-based tool for the user to access the recommendations
Business Impact
- The algorithm recommended rental price adjustments leading to better occupancy and an overall increase in revenue of ~ USD 2 million/year
