Multifamily Real Estate and Digital Transformation: Key Trends

multifamily real estate

In the world of rapidly advancing technology, there isn’t any such industry that isn’t affected by it. Although the Real Estate industry might have been a little late in adopting technology, the introduction of technology has resulted in drastic changes. And in the wake of the recent pandemic, popular asset classes like multifamily properties are the first to adopt new cutting-edge technologies and tools.

Multifamily real estate is considered one of the best and generally the most profitable passive investment. However, the socio-economic disruption due to the pandemic had resulted in multifamily real estate facing certain obstacles. 

Multifamily property owners had to battle with tenants who are having difficulty paying rent. Moreover, multifamily owners and property managers also had to maintain COVID safety protocols to reduce the spread of infections. As a result, they had to adopt new strategies to survive in this new environment. 

This is where real estate technology or PropTech comes into play. Trying to contend with the changing world, multifamily properties are embracing digital transformations in commercial real estate to become future-ready.

This blog by Lilypads will focus on the key digital transformation trends in multifamily real estate.

1. Smart Is The New Evolution

The Internet has become one of the most essential and unavoidable technology in our lives, and with it came the Internet of Things(IoT). IoT devices have become a game-changing technology in the real estate business. 

IoT devices like Alexa, Smart thermostats, Smart TVs, Smart Lighting, and others are a must for smart homes. However, it is more than just smart devices and amenities to be classified as a smart building. 

Unlike single-family properties, multifamily owners need to provide their tenants with basic amenities, periodic building maintenance, and other services. Thanks to the digital transformation of commercial real estate, most of these tasks are now automated. 

Property managers can automate most of the tenacious jobs by successfully implementing property management systems in the building network. From sending tenants reminders to collecting rent, to detecting maintenance issues, to controlling the interior temperature based on ambient conditions. Thus saving time, energy, and money for the property managers. 

2. AI And Automation Is The Future 

When it comes to technology, Artificial Intelligence and Automation are the answer for businesses to keep up with the demands of the fast-paced world. The digital transformation in commercial real estate brought by AI is revolutionary.  From property management to saving energy, maintenance, and monitoring of the building, AI has changed all by automating every process. 

A lender can approve or reject multifamily investor financing by analyzing their credit line usage, historical patterns, and other variables using Artificial Intelligence.  Moreover, AI helps in automating commercial lending processes by eliminating tons of paperwork and discrepancies. It also helps to identify market trends, occupancy rates, usage statistics, and price changes in a particular market.

Data analytics helps uncover historical trends and gain insights into the property.  Using data analytics helps you gain better traffic and interested tenants, thereby increasing the ROI.

Previously real estate investors had to rely on public listing services and a microscopic portion of the entire commercial real estate market. Big Data has disrupted the whole scenario by providing investors access to off-market insights. 

Automated rental platforms have grown in popularity among clients due to their convenient feature of searching properties.

For multifamily property landlords, automated property management software helps to keep a track of huge data which was previously a tedious task. 

3. Take A Tour Of The Property Sitting On Your Couch

Virtual tours have gained a lot of popularity in the past two years. As the world came to a standstill after the pandemic, the CRE brokerage industry took a huge blow. Clients were unable to physically visit sites which ultimately led to the rise of virtual property tours. 

The virtual tour lets renters see interiors, exteriors, and amenities from every angle, unlike photographs. Renters find it beneficial as they provide immense amounts of information about the property and the community. 

The main reason why VR tours have become so popular among renters is the time and cost-effectiveness.

4. Managing Properties Is Now A Remote Job

Technology plays a crucial role in transforming property management in multifamily properties. 

Overseeing operations and maintenance of a property can be costly and time-consuming. Dedicated property management software can help owners streamline their rental operations along with keeping a track of tenant information.

Property management software also lets owners perform a quick inspection of the rental property. Moreover, with the help of big data, it is easy to screen tenants and ensure that only the best-qualified candidates are selected.  

Rent reminders, lease agreement renewals, and other information can be sent to tenants using property management software. The software also allows tenants to communicate with owners about property management. As a result, it improves communication between renters and owners.

On top of that, cloud storage gives property owners/managers easy access to data from any location. Thus, it makes it easy for property managers to work remotely. 

5. Blockchain- the next revolution in multifamily real estate

The process of commercial real estate transactions is known to be time-consuming and complex due to trails of paperwork. But, Implementing blockchain in real estate can streamline all these operations and processes.  

Other than ensuring safe and secure encrypted transactions, one of the most important features of blockchain is generating Smart Contracts. Smart Contracts eliminate the need for middlemen by automating manual tasks such as rental agreements and leasing. Depending on the terms, smart contracts automatically collect rents and send them to the property owner.

Furthermore, blockchain can be used in Fractional Ownership to allow small investors to invest in commercial real estate properties. A group of small investors can pool their money to purchase bigger properties. And with blockchain, it is easier to keep a transparent and detailed view of the ownership.

Multifamily Real Estate Gearing Up For The Digital World

Housing is an essential need for everyone, and multifamily properties have to embrace the latest technologies to remain competitive. Once the multifamily real estate has adopted technology on a full scale, there will be no turning back. 

Automation and AI will completely change the way of conducting business for investors. Trends like smart apartments and virtual tours have now become a must-have. 

Thus the above-mentioned key trends are necessary for the digital transformation of multifamily properties and their survival in the future.