Change for Good

By on Jun 16, 2020 in Global

Editor’s note: the following article featuring Yardi’s Richard Gerritsen was originally published in the Dutch real estate publication Vastgoedmarkt. Reprinted here with permission.

The coronavirus outbreak is a powerful reason to take the digitisation of many work processes to a new level. “There is both a need and a desire for online residential leasing in a socially distanced world,” states Richard Gerritsen, regional director of European sales at Yardi. The technical tools to do so are already available.

According to Gerritsen, the property world rarely views technological transformation in strategic terms. “Clients want operational solutions. Vendors respond by making apps available for very specific purposes. The use of tools like these undoubtedly has added value, but it doesn’t change the way we work. Whether you are a property manager, asset manager or fund manager: I firmly believe the use of technology should form part of your business strategy. A more fundamental consideration of the potential of proptech is often lacking, but today we have an urgent incentive to change that.”

Old habits die hard

Gerritsen is referring to ways of doing business that have been in place for decades. They may be comfortable and familiar, but they’re not best practices. “Technology is changing the way we live in big ways. The coronavirus has resulted in us getting used to different ways of communicating with one another. But in the property world, things still go on much as they always have. We need to make strategic decisions now to be prepared for the future.”

Yet, Gerritsen believes the technology to revolutionise the management of residential and other types of property is already available. He points to the United States, where it’s possible to arrange a property viewing at any time of the day without an estate agent being present. Alexa is instead used to facilitate the viewing. “Right now we need to keep one-and-a-half metres apart from those outside our own household. Technology like this could be a huge help in the socially distanced world we are living in.”

Working smarter with technology

Gerritsen outlines how a viewing might take place: the potential tenant makes an appointment online and then visits the property, using the smart lock code to gain access. The potential tenant is welcomed by Alexa who can provide all relevant information about the property and responds to questions. “The existing technology can be used to enable viewings in a completely different way,” explains Gerritsen.

There is also potential for the leasing process, involving the exchange of documents and other processes, to be managed differently. “We are perfectly at home booking a hotel room using an app. The tenant could arrange the lease agreement in a similar way using a full self-service system and including a digital signing process. The handover of keys could also consist of providing the code for the smart lock. Similarly, inspections could very easily be done using an app or on a smartphone or tablet as self-service, without the need for an agent or property manager to be present. This has become common practice in the United States. There, the agent is a virtual presence offering support, but the tenant does not have personal contact with them.”

Technology could also be very useful when it comes to day-to-day management. Questions about payments, reporting breakdowns or complaints could be handled digitally in a convenient, streamlined process. This would do away with the need to process large numbers of forms, freeing up staff and estate agents to focus on the service itself.

According to Gerritsen, this would also make for easier recordkeeping. “All information about a tenant and the rental property can be held in the same place.” The logical next step would be to utilize the data on hand to provide insights into the performance of a housing complex.

“If a complex has smart thermostats, data from these would give insights into energy consumption. On this basis, the landlord could advise on ways to reduce costs. Or analyse how efficiently a complex is functioning.”

Willingness to change

Gerritsen brings up the example of new ways of doing viewings and lettings because of the huge volumes involved. “There are millions of residential properties across Europe. This equates to a massive number of transactions, with huge effort involved on the part of housing associations and estate agents. So, there is a great deal to be gained by modernising the service. These are tried and tested functionalities that are already available.”

So, why isn’t this already happening on a wider scale? The difference in expectations between generations is relevant here. “The younger generation is much more used to using apps for everything. In fact, they are more likely to be surprised by being expected to fill out paper forms. All this form-filling does not bring any added value.” Gerritsen thinks another stumbling block comes in the form of a general anxiety about change.

“Small-scale changes to improve something will usually be accepted. But the fear of change is sometimes greater than the willingness to change. Any talk of a complete rethink of the processes for housing allocation and leasing will soon meet with resistance. There will be those who say tenants will not be able to cope with such far-reaching changes. No doubt that is a completely human response. But then, there is always a reason not to do something.”