Real estate is a relationship business. It is sometimes an ego business. And it is often an emotional business. 

So making the case that data-driven analysis should drive investment decision-making can be difficult. 

But in another arena, data analysts have been gradually reshaping competitive strategies. 

To see for yourself, tune in this weekend to watch the Kansas Chiefs face the Philadelphia Eagles in Superbowl LVII.

Much in common

At first glance, you may not see many similarities between real estate investing and the National Football League (NFL), but consider the similarities.

In both, participants are very competitive, highly incentivised to perform strongly and constantly looking for a source of edge. 

In both, outcomes are determined by a combination of skill and luck. An imperfect relationship exists between the quality of decisions made and the results achieved, so optimising a strategy is complex. 

And there are cultural similarities too. American football is a conservative sport; real estate is a traditional asset class. 

In both the NFL and real estate investing, decision-making is often guided by what has been done in the past, with a tendency to rely on the instincts of seasoned professionals.

Gradual evolution

The role of data analysts within the NFL has grown incrementally over the past decade, influencing all forms of decision-making, from game strategy to recruitment.  

Viewers of the Superbowl will see that the way teams play the game has changed markedly over the past 10 years. 

Specifically, teams have become more aggressive in their decision-making. Analysis shows that, in many cases, teams should lean towards decisions that include more risk but a higher payoff. So, for example, teams – especially the Chiefs – are now more likely than they used to be to implement passing plays rather than running the ball on first down.  

Going for it on fourth down

But the most evident example is decision-making on the fourth down. Teams need to progress the ball 10 yards in four attempts. If they do not, they cede possession.