Hello, everybody. My name is Jace Swank, and I'm the host of "The Capital Stack" by Yardi. We like to take a practical view on how software can and is helping investment managers, owners, and investors grow their portfolio. On today's episode, I had the privilege of sitting down with my friend and colleague, Paul Yont, as we talked about how AI is impacting the multifamily sector. Specifically, we focus on how AI is resulting in an ROI on the portfolio for investment managers and owners of multifamily properties. I hope you enjoy today's episode. Well, I'm excited to have our guest here today in person, Paul Yont, who's my colleague here at Yardi, and probably the most energetic person I know, not just at Yardi, but in life in general. So Paul- I'm going to try to stay in my seat, Jace. All right. I'm going to try to not stand up and jump around. We'll buckle you down maybe, yeah. Yeah, so appreciate you coming in today. For those who don't know you, maybe just a quick introduction of yourself and kind of what your role is here at Yardi. Yeah. Well, excited to be here, Jace. Thanks for the invite. And, a guy with a cool name like Jace Swank- ... also comes up with a cool podcast title like "The Capital Stack." I just thought that was kind of neat. How do you turn down an invite to come on "The Capital Stack"? That's right. Good to know. Well, I'll have to use that in my invites to other guests in the future. Yeah. So, yeah, Paul Yont, been here a little over 13 years at Yardi. I hail from the Raleigh office, which we affectionately call East Coast headquarters. And I have the good fortune of leading the team that gets to show prospects and clients how our tools work, how and why they meet their needs, and hopefully find alignment with what they're trying to solve and how our tools do that. But really like it here and really like what I do. It's fun to play with new toys and see what the dev teams have built and get to play it out in the software and show clients how what we're building and have built solves for their pain points and their needs. Nice. Yeah, no, definitely no shortage of new toys at Yardi. No. It never gets old, man. It never gets boring because there's always some cool new feature, or a whole new product that's really addressing a need. Yeah. That's great. So today I want to talk a little about AI. No way. I know, right? The topic that we can never avoid anymore. And maybe just a lens for today's conversation for our viewers is when I think about investment management companies, there's sort of two broad buckets they fall under. One is they own and operate the properties. Mm-hmm. The other is they own and outsource operations, and they kind of have different flavors as well. And when I think about the operations or the property management, the day-to-day management of leasing and the properties themselves, with an investment manager, especially if they outsource, they're kind of saying, "Okay, things that are making the property managers more efficient are great, but what does that mean for me?" Right? I'm the investment manager. I've got to worry about capital sources and distribution to investors, and so what is the bottom line at the end of the day? So just want to have that as our lens for conversation today. Sure. And what we're really focusing on, right, is how are some of these operational tools that Yardi's developing or have helping with that bottom line. So why don't we start there, start with AI, one of the products, I know Chat IQ that we've embarked- Yeah ... on for a while now. So why don't we start with what is Chat IQ, first of all, and then where are our clients seeing the ROI from that? Yeah, so Chat IQ is our omni-channel AI agent, so think of it as a virtual agent that can read and respond to inbound emails, phone calls, chats, of course- Mm-hmm ... and text messages. Mm-hmm. So Chat IQ is designed to sort of be that layer, that communication layer, that handles all these apartments.com, RentCafe.com leads, property website leads, all these phone calls. Mm-hmm. Very rarely do properties have a lead quantity problem. Mm-hmm. They have a lead quality and qualifying problem. Mm-hmm. So you really need that virtual agent to help with those dozens of leads coming in every day that are asking about pet policy and application fee. Mm-hmm. Those are factual questions with factual answers that you don't need a human to hopefully be behind the keyboard, be at the phone, to answer those. Mm-hmm. And if we're being honest, they're not really rewarding tasks either. Nobody answers a pet qualification question- ... for the third time of the day and goes, "Man, I nailed that. That felt good." It's not super valuable or rewarding. Yeah. So that's what Chat IQ does, is it sits between the property and the prospects, and also the residents. Mm-hmm. And I think that's really where I want to get into is not necessarily the leasing part, but some of the resident parts. Mm-hmm. But when it comes to leasing, Chat IQ, the numbers are very, very strong. We're approaching two million units live using Chat IQ. Wow. And we've seen big bumps in lead-to-appointment conversion. Mm-hmm. So for every 10 leads that come in, how many of those turn into an appointment? That's gone up 20-plus percent. Wow. But it's not just the conversion, it's the time to conversion. Mm-hmm. So more appointments getting booked and more appointments getting booked faster, and also move-ins happening faster. Mm-hmm. And that, of course, points to the bottom line and the NOI. Mm-hmm. Property income primarily comes from rent, so- Right ... if an apartment sits vacant less days, more rent's collected, less vacancy loss is realized. Yeah. That's great. And so not only if you're an owner/manager, you're doing the management yourself, but again, if you're outsourcing, this is where it really matters, right? Selecting your property manager and helping dictate the tools they use. Yep. Right? So it's not only their efficiency, but again, you're saying we're seeing that reduction in days vacant, right? Faster unit turn. Yeah, and I think early on there was a thought that, oh, these AI agents, we can lower head count. Mm-hmm. We can operate... There's this 1 to 100 rule that's sort of been in place for a long time. For every 100 units, I need one person in the office, and I need one person in maintenance. Mm-hmm. But the data shows, and it's not just us, our competitors as well, that with leasing alone, you can't shave eight hours a day. Mm-hmm. You're not saving eight hours, therefore it's not a full FTE. Mm-hmm. So I think really only if you have some sort of centralization, specialization initiative can you really lower your overhead when it comes to payroll- Mm-hmm ... because you can't go down by one. Mm-hmm. If you're saving four or five hours a day, that doesn't equate to one full-time person. Right. Yeah. So I think that... thought or theory of, "Oh, we can operate with fewer people at the property," sort of hasn't been realized. I see, I see. But I'm assuming that quality over quantity, like you were saying, right? Getting the quality leads in there, which I'm sure also turns to better NOI at the end of the day. Yeah, so more appointments, more appointments faster, and that lead to lease. That time between- Mm-hmm ... "Hi, my name's Paul, I might want to live here," to showing up on move-in day- Mm-hmm ... is reduced by 8%. So over time, 8% across multiple properties, hundreds of units, thousands of units, it adds up to real dollars. Yeah, sure. And so it sounds like that's more of new prospective tenants, right? What about renewals and existing tenants? Yeah. So even rent payments, right? So we now have outbound proactive outreach, so the AI can go, "Hey, Jace, remember rent was due on the 1st, late on the 2nd, and if you don't pay by today, late fees are accrued tomorrow." So the AI knows who's paid, who hasn't paid- Mm-hmm ... and when you want them to reach out, and how you want them to reach out to try to get that money in sooner. Mm-hmm. So some stats on that, what I tell clients is, "Hey, the AI won't make Paul's rent appear in his pocket." Mm-hmm. It's not going to deliver him some cash, and he can then go pay you. Mm-hmm. But it can be persistent, remind him, and get that money in quicker. Mm-hmm. So this is a newer feature for us, but we have clients seeing... The way we're tracking it is okay, how much comes in before the grace period ends? How much comes in in that early late window, and how much comes in that late late window? Mm-hmm. Because the reality is late fees are an income line. You have a line item of other income- Sure ... late fees, and a lot of times that can total a bunch of money. If it's 50, 75 bucks a shot and whatever, 8, 10, 15% of the residents pay late- Mm-hmm ... that's a decent line item. Mm-hmm. So what we've found is some of these clients we were looking at, the early window, the 4th call it, through the 15th, they went from 50% of the late rent coming in that window to now 48%. Mm. No, sorry, 42%. Mm-hmm. So an 8% decrease- Mm-hmm ... or increase rather, of what's coming in in the early window. Mm-hmm. So the bot reaching out and going, "Hey Jace, you said you'd pay by Friday. We don't have that yet. When can you get it in?" Mm-hmm. And those are things that aren't no value tasks for human agents- Mm-hmm ... but they are low-value tasks. Sure. And they're uncomfortable. Yeah. I worked on site for five or six years in my early 20s, and you know what 22-year-old Paul wasn't good at? Mm-hmm. Collections. I was not a good debt collector. I'm calling people- You seem like a nice guy, Paul. You probably get a little forgiveness, right? I mean, it's awkward, it's uncomfortable. Yeah. And a lot of times I'm calling somebody older than me- Mm-hmm ... and I'm saying, "Hey, pay or else." Yeah. So to have the AI do it for you, kind of eliminates that human element and people saying they made the calls or they did the outreach and maybe really didn't. Yeah. Or even a tenant yelling back at you, right? Yeah. It becomes more transactional. It can still be personable. It can still- Sure ... be personal, but you don't have to have your humans hopefully doing it right and in the right tone. And the reality is, again, it's not a no value task, but it's a lower value task. Yeah. You want the property teams in those moments that matter. When somebody comes up for their tour to show up, when a resident walks in the door, not sending out emails and text messages and phone calls- Mm-hmm ... chasing down the rent. If the technology can do that for them, then they can go do more high value, more rewarding tasks- Yeah ... and not dreading chasing the rent down. Sure. So that's rent collections. What about renewals? So I'm a tenant, my 12 months are up, or my lease term is, what's ChaiIQ doing with that? Yeah. So, around the renewal, there's actually more triggers. So, has Jace been made a renewal offer? Have we approved and sent him, "Here's a 12 month, here's a nine month, here's a six month." Mm-hmm. So the technology knows that's been sent, and maybe two or three days later it goes, "Hey, we haven't heard back from you yet. Did you get those offers? Do you have any questions on those offers?" So we can fire off of the approval of the renewal offers. We can also fire off of the expiration date. So sometimes, the lease may end February 28th, but the renewal offer may end January 31st. Mm. And a lot of clients will incentivize the early renewal. Mm-hmm. "Hey, renew by this date. Even though your lease isn't up until in the future- Yeah ... renew early," and maybe it's a $10 decrease or maybe there's some resident reward points. There's an incentive to renew early. Mm-hmm. We want to lock you in, and we want to know that that future projected occupancy is in place. Right. So seeing less days vacant in the unit overall, right? Because obviously they renew and you get the tenant. Just the exposure, right? When I worked on site, we would get nervous when we got to the 60-day mark. Because at 60 days- Mm-hmm ... you're either giving notice or we should be in some sort of dialogue about the renewal. Yeah. So the AI can fire off of approved renewal offers being sent, when those offers expire, has Jace selected an offer in the portal but not signed the lease yet? Mm-hmm. Meaning, said he wants the nine-month but hasn't actually signed the lease. There's all kinds of triggers to sort of go, "Hey, you're at this step in the renewal process, but need to act." Mm-hmm. Again, it's not a no value task to have human agents do it, but it's a lower value task, and it's something that technology can do better and do repetitively better. Sure. Yeah, a quick anecdotal note, I was talking with Jeff Adler, who's our chief economist here, and he was saying in certain markets, and we were kind of highlighting Phoenix, renewals are actually going up faster than new leases. Just because the demographic, and the types of tenants there, and they don't want to move out, and so they actually will even pay a premium. Whereas rents are kind of flattening or decreasing in that market. So I don't know if there's a question there for you. It may be more of a statement, just sharing that renewals, I think, have this added importance too, right? Not just moving new tenants. So more people are likely to renew or wanting to renew, so there's more of a focus on closing that back door and keeping those folks in? Renew and the increase in rent. They're willing to pay the 3% increase- Ah ... because they don't want to move. Maybe the market's tighter- It's older ... or they don't want to move all their stuff. Yeah. Whereas new tenants coming in are saying, "Well, hey, there's a big supply here right now in Phoenix," and so they're seeing rents come down on new leasing. So just a kind of anecdote again of sort of a weight or an importance on renewals, too. And if rents are going down, you don't want those existing residents to leave because- Right ... you're going to have vacancy loss, you're going to have turn costs, and your lease rent is going to be less than if you could've had Paul stay. Yeah. So then just a good example of these renewals and using ChaiIQ as a feature to make sure that that bottom line flows through into your NOI as the asset. Yep. Yeah.So you and I were chatting recently about another topic, which is verification, right? And again, a very operational thing as a property manager, but I would assume, if you put the wrong tenant in and it becomes a big debate later and there's potentially legal action needs to take place, that's loss in revenue, right? So you want to talk a little about what we're doing around tenant verification? Yeah. And unfortunately, COVID really magnified this. Not that leasing sight unseen didn't happen before, but in precedented times, it does happen, but it's a low single digit. Mm-hmm. Very rarely does somebody end up moving all the way in, showing up on move-in day and never having been there before. Mm-hmm. But during COVID, there was a lot more, not just online applications, but people sort of not moving in until day of. And the fraudsters sort of saw this as a window of, oh, well, we can probably get away with more and figure out ways to fake IDs, fake pay stubs. Mm-hmm. And once somebody moves in, it's not like tomorrow you can kick them out. Mm-hmm. You find out Jace isn't Jace, you found out the pay stub he gave you was fraudulent. Legally, it's like months to get them out. Mm-hmm. And typically, when you move somebody in you shouldn't have, there's a reason they shouldn't have been moved in, because they don't make enough money to pay, or they aren't who they say they are. They're going to Airbnb the unit. They're going to sublease it on Craigslist and milk you for four months worth of rent, and they're going to make a bunch of money subleasing it. Mm-hmm. So that's all revenue down the tube, and there's legal costs to get somebody evicted. So yeah, you do not want to move somebody in who isn't who they say they are. Mm-hmm. So having good verification tools, ID verification, income verification- Mm-hmm ... to validate Paul is Paul, and to validate Paul makes the money he says he makes. Yeah. And so much like Chat IQ, this is a feature that's available today. Oh, that's right. Yeah. And in mass adoption, two and a half, 3 million units on each, I think- Wow ... our ID verification and our income verification. And the good news is, consumers, we're all familiar with it now. Mm-hmm. You can't rent a truck from U-Haul without doing front and back- Yeah ... of your ID and a selfie. Right. If you go to Home Depot and you want to rent the truck for your mulch or your whatever backyard project, you have to do the front and the back and the selfie. Yeah. At the airport now, they scan our eyeballs. Yeah. When you do TSA and sometimes even at the gate. And then the verification of income stuff, we have a way to tap the automated payroll records. Mm. But even if their employer doesn't participate in that, we're all used to adding bank accounts to our Venmos and our PayPals- Mm-hmm ... and Plaid. So it's a very simple process. You pick your bank, and if your phone number's connected to your bank account, you get that six-digit OTP, that one-time pass code that you enter. Mm-hmm. Even if you don't have that set up, you pick your bank, you put in your username and password, and then we look at the rhythmic deposits into that bank account. Oh, okay. Does Paul make three times the rent? Yeah. Three and a half times the rent. So we really don't even rely on stated income at all anymore. Stated really doesn't matter because we now have verified. Yeah. Whether it's directly from the employer or it's the rhythmic deposits into that bank account. Yeah. And even things like gig economy stuff, Lyft, Uber, those are all... You cannot drive for Lyft or Uber without connecting a bank account. Right. So sometimes there's this idea of, oh, my residents don't have bank accounts, or, and I think that's false. I think that's a narrative that we've sort of bought into by people telling us that. Mm-hmm. But again, you cannot drive for Lyft or Uber if you do not have a bank account. That's how they deposit the money to you. Right. Yeah. Interesting. Huh. It is fascinating. On one hand, it's really cool tech, but on the other hand, I go, "Man, who raised these people?" Like, who are their mamas? Like, who is out here developing ways to fraudulently- Yeah ... to do this kind of stuff? Like... So maybe we got to build in an ethical response to these people into our AI solutions. Yeah. It's unfortunate that we have to build solutions that do this because of what people are doing to- Yeah ... not earn an honest living, you know? Sure. Yeah, definitely. So, I want to shift gears. Before I do, though, is anything else that has come to adoption, being used in terms of AI or recent technology investments? I mean, another thing that's sort of a big buzz at the industry conferences and LinkedIn and whatnot is kind of resident rewards. What can we do- Mm ... to incentivize the residents to stay, build a sense of community? Mm. What can we give back to them in the way of points or offers, just like credit card points and whatnot. Yeah. Sure. We have a big focus there with RentCafe Rewards, trying to leverage our size and our scale and our network to give residents some points, some value on whether it's their rent or their renter's insurance payment or their power payment- Mm-hmm ... or setting up their cable and Wi-Fi, or using the security deposit alternative. A lot of these are goods and services they're going to have to get and pay for anyway or things they're going to have to do. So why not make that easier for them, and at the same time, leverage that to then give them back some points- Yeah ... and some value because of those goods and services that they did through us. Yeah. Well, if there's anything like my flight points, I think people will be obsessed with that because I certainly am obsessed with my flight points and my hotel points. That's right. Yeah. I'm a points junkie too. Do all the NerdWallet points guy. Yeah. I'm always trying to figure out how can I maximize, like you said, my Delta, my American, my Hilton, my Marriott. Mm-hmm. Yeah. Lyft, I get extra points with Lyft rides because of my Chase Sapphire card. Mm-hmm. So yeah, a lot of us are kind of into the points game and trying to figure out how to maximize those points, so- Yeah ... how do we apply- It's a rabbit hole. The more you get sucked in- Uh-huh ... the more you keep going, right? So how do we apply that to residents and paying their rent in the resident portal and creating that stickiness of- Mm-hmm ... them getting points and rewards and goods and services for what they're doing with the property. Yeah. And that's something that's in production today as well- That's right. Yep ... our clients are using? Yeah. Yep. Check out RentCafe Rewards. We have a mascot, his name is Cosmo. He's a capybara. Okay. Not like Cosmo Kramer from Seinfeld? Nope. No, he doesn't have the tall, weird hair. No, Cosmo's a cute little-Capybara. Nice. That's awesome. So I keep emphasizing this question of, is it out in production today, right? Because obviously with AI there's a lot of buzz, there has been for all of 2025, and as we're now going into 2026, the question is, okay, what are we putting to use, right? It's really great to see some of these things that our clients are seeing real value from, right, and seeing that bottom line. Yeah. ChatIQ is, I would say, massively adopted, approaching two million units. I just was talking to some folks in the services organization. A client of ours out of Salt Lake City just went live with 98 properties using the collection and renewal piece that we talked about. The technology going, "Hey, Jace, you haven't paid yet," or, "Hey, your rent was late as of four days ago. We need to get that money." Or, "Eventually, if we don't get it, an eviction will be filed." Mm-hmm. So yeah, that's all in wide adoption and going pretty well. Nice. When we look at some of these examples, if we do a Yazz session or something with some clients, we'll of course anonymize them, but we'll show some of these text messages, and we'll show some of these email back and forths, and a lot of times the residents kind of appreciate it, especially if it's a reminder before a late fee is added. Right. And you could easily make the case that a human agent wouldn't have the time to reach out to every single resident the day before rent's late to remind them that today's the last day to pay. Yeah. So it's almost a nice customer service thing. "Hey, friendly reminder," a little ribbon around the finger. Yeah. "Today's the last day. If you wait till tomorrow, there'll be another $75 late fee or 3% late fee added," whatever that policy is around late payments. Mm-hmm. Nice. That's great. So the last question is kind of shifting gears. That's what we've already done today. What's on the horizon, whether it's something that we are developing now or starting to think about or industry trends that we're seeing? Yeah. It's a lot more around the agentic piece and a lot more on... So today we do leasing really well, the prospect piece. We do the resident piece really well. But there's sort of that middle area of applications. Mm-hmm. So, our technology, we know who's where in the application process. Mm-hmm. So why can't the AI agent reach out and go, "Hey, you haven't done your ID verification yet," or, "Hey, your lease is ready to be signed, but you haven't signed it yet, and that unit's going to have to be re-released if you don't sign this lease by whatever day." Mm-hmm. So tracking down those stalled applications. Yeah. I imagine- Because when somebody's in application status, that unit is off the market. Mm-hmm. That unit's sort of earmarked for this person. Mm. But we either need to get them through or out of that application process. Yeah. Because if they can get approved and get to the finish line, great. But if not, we don't want to be holding that unit when somebody else may have been able to rent that unit today, but it's not available because it's been held for five days by this other person. Yeah. So really helping with that application piece, where are they at, what still needs to be done, and just like the collection thing, it's not a no value task, but it's a lower value task, and the technology can do it on repeat much faster and much more efficiently than human agents can. Yeah. So that's one piece of it. Some other stuff around affordable. So same idea, but affordable is a little more complex. So, helping with that income certification piece and that additional paperwork that's needed for the affordable application process. Some more stuff around residents. Mm-hmm. So forwarding address. A resident gives notice to vacate. A lot of times they don't know where they're moving yet. Mm. But by law, you have to send them something- Right ... to their new address. But if you don't have their new address, you end up actually sending it back to the property where you know the new resident's living, and the old resident- Yeah ... isn't there anymore. Yeah. So reaching out, going, "Hey, you're moving out in five days, but you haven't given us your forwarding address yet. We need that information." Mm-hmm. Reaching out about, Jace is maybe an active prospect, he's interested in a two bedroom. We have a new unit available, or the price just went down. Mm-hmm. So kind of keeping in contact, but relative to availability updates, pricing updates. Yeah. So there's really a lot that these AI agents- It sounds like leveraging the data, right? Mm-hmm. We have that tenant resident data and can follow up with it. That's great. It's exciting stuff. And like we talked about earlier, there's always something new, there's always some new toy, and we're always building to try to help our clients be more efficient, operate better, move that bottom line, that revenue line up and- Mm-hmm ... leverage more automation, be more efficient, and be more in those moments that matter where the technology can't help. Yeah. When that resident walks in the door, when that tour shows up, I need to be ready for that tour. Got the keys ready, know exactly where I'm going to walk. I've walked the unit already. Mm-hmm. I have more time to make sure I nail those in-person moments- Mm-hmm ... those moments that matter, because I don't have to do some more of this mundane, head down, repetitive tasks. Yeah. Makes sense. Cool, man. Well, thanks for the time today. This has been super insightful into- The capital stack, man ... what we've already done and- How about that? ... where things are going. Yeah, definitely. Definitely some good tools that our clients can be utilizing to grow their capital stack, right? That's right. And that's kind of what this series is all about is what are some practical tools that we can put into practice and start using- Yeah, I think- ... to help grow capital ... ChatIQ definitely applies there, and the fraud stuff. The fraud maybe doesn't come off as that sexy at first, but- Sure ... there's clients that are losing a lot of cash because- Yeah ... of these fraudulent applicants that get in and custom. Yeah. Sometimes it's a five-digit number that you end up losing if you let the wrong person in. I'm sure from the headache and just the time suck, right, to have to deal with these legal issues and whatnot. So it's definitely huge for our clients, I think, to avoid that. Yes, sir. Yeah. All right, man. Good talking as always. Happy to be here, Jace. Thanks for having me. Bye.