AI Will Change Multi-Family Real Estate

 It’s time to talk about robots. 


I’m only half-joking. Robots are still how many of us think about artificial intelligence, even though the reality doesn’t look much like “Terminator” or “Blade Runner.”


Hollywood loves to make movies about the scary aspects of artificial intelligence (AI), but the reality is that this technology is already changing our lives for the better. That’s true for many different industries, but today I’m talking about the impending changes it brings to multifamily real estate. 


This is clearly illustrated by a 2018 report from the National Multifamily Housing Council (NMHC), which uses surveys to gauge what apartment seekers are looking for — and what they’ll be looking for 10 years from today. 


“Technology will become part of the core design of apartment communities rather than an add-on accessory or appliance,” the report said. 


We can already see these changes happening in the Greater Toronto Area. The Toronto-based real estate company HouseSigma is using AI to inform home-buyers and investors before they buy. 


In a recent interview on BNN Bloomberg, HouseSigma CEO Joseph Zeng said their AI technology helps users estimate home values for all available listings in Toronto, obtain estimated home valuations, and find similar nearby properties that were already sold. 


“We built the app for people like us,” Joseph Zeng, the CEO of HouseSigma, said. “Data-driven investors require a lot of data to support a million-dollar decision to buy a home...When the user is buying for an investment home, we can even estimate the projected rental income.”


Given the slow pace of design and construction of multi-residential apartment complexes, builders and developers will need to anticipate the future desires of potential residents. Any building designed right now won’t see its first tenant for at least a few years. In today’s world, with how fast everything changes year-to-year, that’s a very long time. 


A recent Forbes article said AI represents a “paradigm shift” for multifamily real estate. 


So what are these changes brought by AI to multifamily real estate? 


Here’s a brief overview of some of the big ones. 


Saving Money through Energy Efficiency


It’s becoming clear that “smart” thermostats can improve the energy efficiency of individual apartments as well as the entire building. Artificial intelligence can predict electrical outages, clogs or leakages, and prevent problems before they occur. 


This will reduce costs, which owners and investors will love, and also minimize disruptions for residents, who tend to dislike interruptions of their air conditioning or Internet service. 


More than that, the younger generations that will define the housing markets of the future care deeply about the environment and sustainability. If you show that your building is more eco-friendly than the one next door, you’re already better prepared for the market of the future. 


“Smarter” Apartments


Most people are likely familiar with “smart appliances” from Google or Nest. These devices allow residents to experience a closer connection to their homes and accomplish household tasks with a voice command. 


Units that feature these “smart” devices like Alexa or Google adds value to the apartments and, once again, will appeal to Millennials and Generation Z. It also allows increased premiums for the units, and generating more income. 


Improving Property Management


Human error is the likely source of many problems, but AI provides options for addressing these issues early, reducing the impact on residents in the process. Advanced apps and services using AI can assist property managers with daily tasks, while making it less likely they miss a call from a resident with an urgent concern. AI can also help ensure residents consistently pay their bills on time, manage contacts for managers and many other tasks. 


The ways AI will be used in real estate will only increase in the coming years. If developers and investors want to stay ahead of the game, the utilization of this technology should be a top concern. 


Popular posts from this blog

Planning Home Renovations? You're Not Alone