Welcome to Real Estate Tech Watch, a monthly column that will explore how the latest technological developments will impact South Florida real estate. I’m Melea VanOstrand and you can reach me at [email protected]
Property management technology is changing the way landlords and property owners manage their day-to-day operations, by reducing paperwork and making transactions easier.
But why did it take so long? That was the question among panelists at IMN’s recent Single-Family Rent Forum at Loews Miami Beach Hotel.
Though many of the technologies used aren’t new, prop-tech has just emerged in the real estate industry over the last few years, according to Ashwin Agarwal, CEO of Advocate Technologies Inc.
“It’s because you need real functional expertise in terms of what you guys do, plus product excellence, and that’s really hard to blend together, especially when you have the technology platform,” said Agarwal.
The real estate industry currently uses drones, big data, 5G, artificial intelligence and solar power technology.
The technology and data from that can be used by appraisers, agents and landlords with market trend numbers, and can be used for analysis and future improvement.
Technology can also be used for asset management, workplace management, and to decipher how long the average lender takes to clear insurance, predict how much a home will be worth, the panelists said.
Ryan Letzeiser, CEO and co-founder of Obie, an insurance company for landlords and real estate investors, says the data is dirty, meaning it can often be incomplete, outdated or contain mistakes. But the more it develops, the more it will likely be used in real estate to streamline business.
“We have to do a lot of cleanup, but I think it will help speed up cycle times immensely, allow people to close faster, reduce pursuit costs, and things that are sub-human characteristics that are associated with owning and operating these properties,” said Misha Sulpovar, vice president of artificial intelligence products at Cherre.
Letzeiser said the development of technology in real estate can’t flourish without practitioners actually taking it up.
“Real estate lags so far behind in the public equities market. I think with the advent of single-family homes and the broad spectrum of investors investing in both retail and institutional is really a way to help push technology, because they have this expectation level they’ve seen inside the Robinhood trading type platforms,” said Letzeiser. “It’s only going to get better over time.”
AI vs. Humans
Using artificial intelligence won’t replace humans, but InspectHOA CEO Vishrut Malhotra said it will provide clients with more accurate data.
“That will continue to grow as we find solutions to these types of applications. Data is a big problem and data’s messy. Different systems don’t speak to each other, so those are some of the challenges. But overall, we have very exciting things in the space coming up that will solve problems,” said Malhotra.
Sulpovar noted that leaning into AI brings risk. He pointed to iBuying, when companies use an algorithm to buy a home, and use it for cash.
“How do you start to then democratize that a little bit so that the ecosystem can start to behave more efficiently in the market? Where do you put those augmented points? As long as there’s risk associated with exercises like iBuying, there’s going to be humans in the loop,” said Sulpovar.
Malhotra said artificial intelligence is typically used to solve narrow problems.
“You see examples where AI can be creative as well,” said Malhotra. “Humans have much more context and we’re able to solve more complex problems that aren’t well defined in a much easier way.”
Data Breaches Are a Concern
For service providers, Agarwal said the pros and cons of using AI or humans come down to economics.
“What’s going to be the trade off and what can I accomplish here,” said Agarwal.
With the rise of remote work, the number of firms hiring outside of the United States has gone up, and as the economy changes it may be cheaper to use more humans.
“COVID is changing a lot of that calculus to say, ‘We’re going to stay human-centric in a lot of parts of our business that we’re not yet ready to automate because remote work is now possible and cheaper labor is more accessible,’” said Agarwal.
As technology progresses, exposed data is one of the biggest threats, especially in emails involving real estate transactions, where important documents are shared.
“Everybody needs to take a good strong look at their tech infrastructure and make sure they’re proactively filling holes. You don’t want to be in the middle of a data breach. It’s only going to get worse as computing power gets strong in the next five years,” said Letzeiser.
Despite cyber threats, the panelists agreed prop-tech will only improve with time as more real estate service providers link together.
“It’s super exciting to be a part of that and help spur innovation in that space,” said Letzeiser.