RPA in real estate: an opportunity to explore

RPA in real estate: an opportunity to explore

May 31, 2021

Blog

RPA in real estate: an opportunity to explore

RPA Business Analyst

Nowadays, the typical archetype of a smiling real estate agent with extraordinary interpersonal skills, able to get rid of unsaleable properties, has become pretty common across the media. However, the success of this industry, the global market value of which in 2020 was estimated by Research and Markets at $2.7 trillion and looks set to reach $3,7 trillion by 2025, also lies in the work of administrators, marketers, and accountants.

Their efforts don't always have much to do with public relations, but rather with piles of paperwork higher than a five-floor manor. At least virtually, as most of these procedures are digitized and performed on a computer.

Anyway, the manual processing of documents and data is massive, depriving these professionals of precious time that would be more useful and motivating to devote to tasks with a greater strategic, social and creative component.

How to streamline and speed up these clerical operations while improving accuracy and saving money? A possible answer to this dilemma has come in recent years from various automation technologies, which aim to replace or support human operators with bots and virtual assistants in carrying out particularly tedious and time-consuming tasks. One of the foundations of this innovative and rapidly spreading approach is robotic process automation (RPA).

Real estate & hi-tech: a love-hate relation

Let's start our analysis with a significant sore point. Real estate has traditionally shown a limited propensity for change, especially compared to other sectors. A good bunch of real estate companies still use spreadsheets when collecting and analyzing data for property evaluation, invoices, lease administration, and so on.
 

"The real estate industry is still in the infancy stages of technology innovation"

Chao Cheng-Shorland

Co-founder and CEO of ShelterZoom Corp

This could be due to the fact that interpersonal relationships between agents and customers are still perceived as a crucial point. For example, according to estimates by the National Association of Realtors, 41% of sellers who turned to real estate agents found theirs through the recommendation of friends and family. Therefore, many professionals may be skeptical of delegating part of their duties to software.

However, this sector is no stranger to new solutions. These advances, which may be grouped into so-called “real estate technology”, encompass many different business aspects and processes, including the appraisal, leasing, marketing, and management of residential, commercial, and industrial facilities.

The first major innovation in this sense was the shift of residential listings from print to digital media. A further step forward involved innovative tools to make properties more accessible, such as Airbnb. What we are seeing now is the latest wave of this evolutionary process, related to the growing adoption of automation solutions, such as RPA.

Bots may be realtors’ new best friends

RPA entails the deployment of software robots which are programmed to mimic typical human actions and fulfill a wide range of repetitive and high-volume duties. The business operations best suited to be automated with RPA in real estate are those involving huge amounts of data entry and processing operations. Among them, we can mention:
 

  • Vendor and customer account setup
  • Tenant credit processing
  • AML/KYC compliance
  • Bank reconciliation
  • Invoicing
  • Report generation
  • Supplier management
  • Maintenance scheduling
  • Contract entry
  • AR/AP
     

The results achievable by investing in robotic process automation consulting and leveraging RPA robots for the aforementioned processes might be truly remarkable in terms of money savings. According to Deloitte, 45% of the companies surveyed expected cost savings of 10 to 20%, while 27% of these agencies were even aiming for savings of 20 to 40%.

Expected cost savings through RPA implementation

RPA in real estate also looks very promising with regards to potential time savings. According to our partner and business automation leader UiPath, one of the top Malaysian real estate companies, Sunway Group, reduced processing times by 30% across 35 high-value business operations with an RPA solution empowered by AI.

Many pros and some (solvable) cons

While physical operators can easily get distracted or frustrated after repeating yet another operation and, as a result, make mistakes, RPA robots are fast, tireless, and almost foolproof workers when carrying out straightforward tasks.

This technology is also highly scalable by increasing the deployment of bots in various business processes, and is relatively simple and inexpensive to implement. That's because RPA robots, unlike other more intrusive tools, can easily operate with legacy IT systems on the front-end, without the need to replace previous configurations.

This ease of integration and flexibility makes RPA solutions ideal when it comes to connecting multiple IT systems that would normally struggle to communicate with each other. Think of an email client and an ERP system used by a real estate company. To move data from one software to another, employees should manually extract the required information from incoming emails and upload it to the ERP. This activity can be automated by adopting a bot that will take care of bridging gaps between the two systems.

Does this mean that RPA robots are flawless? Obviously not. Especially in their "basic" version, these assistants are limited to dealing effectively with standardized, rule-based tasks and recurring scenarios because they follow pre-established instructions without asking too many questions.

To make bots smart, i.e. able to learn from experience, understand the context in which they operate, and face any exceptions to the rules, they need a little boost. Indeed, the most recent trend is to enhance RPA solutions with AI, machine learning, and cognitive technologies. The result of this teamwork is known as intelligent process automation (IPA), and while not necessarily implemented in all situations, it's becoming a standard choice for many companies.

3 good candidates for automation

The list of RPA use cases in real estate is quite long. We can aggregate some of the most common and significant ones in terms of potential ROI into three main categories.

1. Property management

Let's start our roundup of RPA use cases from the most distinctive aspect of the real estate sector, namely property and facility management. This highly process-centric aspect of the industry involves a wide range of repetitive and rule-based activities that can be improved in efficiency and accuracy by implementing RPA:
 

  • Lease contract processing: The manual procedures for drafting and processing lease or rental agreements are undoubtedly subject to errors and inaccuracies. In fact, they normally require sales and marketing departments to manage a lot of information gathered from different sources.
    A bot can take charge of these operations, for example by entering data in standardized pre-filled forms and creating the tenant account in the property management software once it has received the lessee's and landlord's digital signatures.

     
  • Resident communication: Another fundamental aspect of property management concerns the relationship with customers and tenants. RPA bots can be used to interface more effectively with occupants. For example, it's possible to improve communication with residents by automatically sending messages about rent increases, key returns, contract renewals, rent payments, and so on. 
    Following the rule-based approach described above, the autonomous sending of these reminders may also be triggered under certain conditions. Bots can check incoming payments, mark insolvent tenant accounts in the corporate system, and contact them via email.
     
  • Tenant onboarding: If it's true that the first blow is half the battle, real estate agents should pay close attention to tenant onboarding. This process includes many tasks, such as creating new tenants' applications, checking their criminal records, referrals, incomes, and proceeding to the final approval. Collecting all this information and filling the proper documentation with bots is faster and more accurate.
     
  • Maintenance and cost management: Maintenance costs and all the related bureaucracy are difficult to manage, especially in the case of large companies with numerous properties. RPA can be implemented to automate heating, water, and electricity reporting, consumption-based invoicing, and maintenance requests.

2. Accounting and financial operations

While not exclusive to this sector but common across all industries, the natural protagonists of RPA in real estate are probably the financial, tax and accounting processes. The key role that bots can play in back-office activities is determined by at least three factors.

First, the typical activities performed in these departments are generally repetitive, high volume, and well-structured. Therefore, easily manageable by RPA bots. Just think of the time and effort required of accountants to manually monitor the huge amount of invoices, payments, renewals, and lease contract changes.

Second, delegating these activities to bots with a zero-error rate significantly reduces one of the main business risks, namely the likelihood of fraud and human error.

Third, as a direct consequence of the previous point, the greater accuracy achieved by bots in managing administrative practices is an important catalyst for regulatory compliance, both in terms of personal data management and tax legislation.

Some of the accounting and financial activities worth automating are:

 

  • Bank and account reconciliation: RPA bots proved very helpful in the reconciliation process. Indeed, they can be instructed to extract bank account statements and verify the correspondence between them and the company’s general ledger.
    This cross-check is useful for identifying any discrepancies in the cash flow, which may be due to delays in recording payments or simple compilation errors. Once the analysis is complete, bots can trigger validation requests or send a report to administrators.

     
  • Accounts payable and receivable: Processing inbound and outbound invoices can be a nightmare for even the most experienced accountants, including those who work for real estate agencies. Especially if drawn up in numerous different formats, these documents are easily subject to errors both during their compilation and when collecting information from them.
    In this regard, bots can lend a hand by extracting salient data from incoming invoices and entering it into corporate systems, or by drafting standardized forms addressed to customers. These extraction capabilities can be further enhanced with AI-powered tools.

     
  • Tax reporting: Real estate agencies can manage numerous properties, each being subject to taxation, not to mention corporate taxes such as the CIT. This makes the manual management of these bureaucratic procedures particularly burdensome.
    That’s why another process worth automating with RPA solutions is tax reporting, including the preparation of all due fiscal documentation and its subsequent filing to competent authorities. Again, bots can extract information from different sources and compile related reports faster and more accurately than humans.

     
  • NAV calculations: Faithfully respecting the famous Latin motto "Pecunia non olet" and turning to the purest financial aspect of this industry, we cannot fail to mention the Net Asset Value (NAV). This is a fundamental yardstick for measuring the future returns of a real estate investment fund. The calculation of such parameter, which takes into account different types of market data, can be improved by adopting RPA tools for the extraction and processing of such information.

3. Marketing

Management and accounting would be useless if real estate properties were not sold or rented. Marketing represents an important boost in this regard, and many of its processes can be automated with RPA, too:
 

  • Corporate blog posts: To the great satisfaction of commercial writers, right now bots can't help that much in creating promotional texts. However, they can be implemented and trained to publish and distribute these texts regularly throughout the month.
     
  • Email marketing: Bots can work alongside marketers in this specific branch both to speed up the compilation of mailing lists and to automate the sending of emails. In this way, it is possible to keep the customer base updated on the latest real estate news.
     
  • Chatbots: These are valuable virtual assistants that allow customers to interface with an agency 24/7, improving the customer experience. Chat messages can trigger bots to perform relatively simple tasks, such as showing real estate for sale in a certain area. But with the integration of RPA and other technologies, specifically AI, their performance can be further improved.
     
  • Social media marketing: With the growing importance of social networks, the marketing part related to them is also receiving more and more attention. Various RPA solutions allow realtors to automate the publication of content and, if enhanced with predictive data analytics in marketing, to target potential customers based on their preferences and interests.

How to succeed

RPA in real estate is a technology with an immense potential. However, like all great innovations, it also entails controversial implications and needs to be implemented wisely. Three factors should be taken into account by any company that is planning to deploy bots in its business workflows:
 

  • Automation is also a matter of people: When it comes to delegating an increasing number of tasks to robots, a widespread fear among professionals of massive job displacement is more than understandable. According to data from the US Bureau of Labor Statistics, also reported by the World Economic Forum in 2018, the percentage of automatable jobs in the real estate sector could reach 40% of the total.
    To avoid this negative effect, employees would greatly benefit from proper retraining and the enhancement of all those typically human and non-replaceable skills, such as strategic planning, data-driven decision making, creativity, and public relations.
Percentage of automatable jobs
  • Cherry-picking the right tasks: To ensure a fast and consistent ROI, it is essential to select the most suitable RPA use cases. For example, it may be worth automating high-volume business processes that will greatly benefit from bots' exceptional scalability.
     
  • Turning fast robots into smart robots: RPA solutions are like canvas. They can be customized by empowering bots with a combination of AI and cognitive technologies based on the specific needs of a business.
     

Forward-thinking companies should pay attention to these variables and consider the relative backwardness of the real estate sector as a potential asset. Because if it is true that this industry as a whole is a couple of steps behind the others in terms of automation, it also means that the innovation leaders will benefit more from the implementation compared to their competitors.