iRenting and iBuying are fairly new to the field of property management. The traditional property management systems are heavy on the human factor, which creates bottlenecks – a single estate agent can only take one client at a time to view a property. By partnering with AI (artificial intelligence) and going digital, these newcomers have sought to disrupt the traditional playing ground and forge a new model for selling and renting property. Still in its infancy, a lot of changes have happened in a short space of time and the market is likely to go through a few more major hiccups before settling down to business as usual.
The Development Of iBuying
iBuying came first, being the brainchild of entrepreneur Eric Wu in 2014, who already had an extensive property portfolio.
iBuyer is short for ‘instant buyer’, which captures what the whole new scene is about. The original idea was to buy properties at low prices, fix them up, and resell them at a profit. While there is nothing new about this concept, what distinguishes it from the traditional market is that it makes use of AI, machine learning, and digital handling of big data to streamline the entire process. This reduces the hold-ups caused by human involvement. It does not eliminate humans but uses AI for the processes that can be accomplished more quickly, thus cutting down turnaround times.
2022 is set to become the year that determines the way forward for iBuying and iRenting.
The Development Of iRenting
iRenting began five years ago and has since been developed and improved upon by companies like UpperKey.
By taking over a property from the owner for a long-term period, iRenting companies restore it, fill it with furniture and appliances, and lease it out to high-end tenants. The owner receives a higher monthly rent without having to play landlord. The iRenter provides digital tours that can be viewed by multiple prospective tenants at the same time, ensures their creditworthiness, and forwards a digital key to the lessee, cutting out weeks of work. When the tenant leaves, a housekeeping and maintenance service cleans up and carries out repairs and the property is ready for the next tenant.
iRenting reduces empty time by using the same apartment for monthly, weekly, and daily leasing, thus maximising occupancy rates and profits. Not all iRenters go through the process of preparing a rental for the next tenant. Some seek to cut costs and transfer savings to owners through digital management, AI-calculated pricing, contactless tours, and personalised omnichannel marketing
Positive Trends That Are Being Experienced in 2022
One of the latest trends in iRenting is where homeowners have started using it for a first property. With the guaranteed higher rental monthly and not having to fulfil a landlord’s obligations, renting has never been easier. These owners are now investing in more properties for iRenting.
The time between handing a property over to an iRenting company and having a tenant inside has been gradually reducing. It takes a mere 24 hours or less to have the property listed on multiple channels. In some instances, it takes between three and eight hours from prospective tenants applying to rent a property to them receiving a digital key. Occupancy rates sit at 97%.
The Covid pandemic has sped up the development of iRenting and iBuying technology since 2020, as businesses failed or barely survived the effect of lockdown restrictions. AI and machine learning have entered the property market years, even decades, ahead of what would have happened in normal circumstances. And now that they are here, they will only take a stronger hold on the industry.
As more companies join the bandwagon, the forces of supply and demand will favour the customer more.
Negative Trends Experienced in 2022
Many smaller companies are trying to enter the iBuying and iRenting stream. As a result, market shares fluctuate constantly and some of the starters have been forced to leave the field.
Despite the promise of AI, humans still have to identify the parameters and provide instructions. Mistakes at this stage have cost some companies as they compounded their losses.
With iBuying, a lot of customers rely on the presence of an agent before accepting an offer. While this is good for the agents, it reduces the profits of customers who must pay agent fees and iBuyers who have to pay more for properties. The new trend has not made a huge dent in the property market and traditional agents are still able to continue with current processes. It remains to be seen if and how this changes, post-2022.
It will be interesting to watch the progress of iRenting and iBuying into the future; 2022 has been named the pivotal year where there are still a lot of uncertainties that will gradually resolve.
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