06/04/23
Managing open inspections is a crucial part of a real estate agent's day as it can significantly impact securing tenants, buyers, and generating income for property owners and the real estate company. The agent must schedule appointments, drive back and forth to the inspection, prepare the property for inspection, conduct the inspection, and follow up with interested parties.
In addition to organizing inspections, real estate agents spend a considerable amount of time in their day driving around to open inspections, which can vary based on their location, the number of properties they manage, and the frequency and duration of the inspections. For instance, an agent managing a large number of properties across a wide geographical area could spend several hours each day driving between properties, while one managing a smaller number of properties in a more concentrated area might only spend a few hours each week driving to inspections.
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As of September 2021, the National Association of Realtors reported that the inventory of homes for sale in the United States was 1.28 million homes. Also in September 2021, the United States Census Bureau reported that there were approximately 44.1 million rental housing units in the country with a vacancy rate of 5.5% meaning approximately 2.4 million properties are vacant.
Real estate agents also have a crucial responsibility to manage the keys for all their rental properties and houses for sale securely and efficiently. Common key management practices include the use of key lockboxes (around the size of your phone) that attach to the front doors of properties, outsourcing to professional key management services, and implementing internal key management systems involving large cabinets with rows of hooks to hold metal keys, and paper log systems to track key checkouts. Any loss or mishandling of keys, or duplication without permission, can lead to security breaches or property damage, so it is crucial for real estate agents to prioritize the safekeeping and management of keys for all their properties.
Real Estate agents are looking for more efficient key management and open inspection management practices to save them time and money. Or in other words, Real Estate agents do not want to physically be onsite for open inspections, and they are looking for a 'self-inspection system'.
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Challenge
Smartlocks, which allow digital keys to replace traditional metal keys and be shared online to prospective tenants/buyers, are not a practical solution for Real Estate agencies trying to set up 'self inspection systems'. This is due to several reasons. Firstly, Real Estate agencies only manage properties for a short period of time, and the responsibility for any improvements to the property such as paying for smartlocks and changing the properties existing metal key locks, lies with the homeowner. Additionally, most smartlocks require Wi-Fi and power to operate, which is often not available in empty properties that are up for sale or rent. Furthermore, in the case of apartment buildings, changing common door locks to smartlocks can also be difficult as approval and payments from a body corporate may be necessary. And not all people who need access to common doors may be comfortable with using digital keys and smartlocks.
Most current lockboxes used by Real Estate agents (which store metal keys to the property) only have one permanent code to unlock the mechanical combination lock on the box. This means that only the Real Estate Agent can unlock the box as this one and only code cannot be shared with prospective tenants or buyers for the self inspection for security reasons - anyone with the code can come back at anytime and unlock the box, get the metal key and let themselves into the property.
To address these issues, Digital Keys is working with a number of US Real Estate agencies to build a 5G IoT powered lockbox that can generate one-time PIN codes or time-sensitive digital keys that can be easily shared online with ‘already vetted’ prospective tenants or buyers. The 'self inspection system' must also ensure that the property is vacant and locked up when the prospective tenants or buyers leave without having to change the current locks.
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Specific scenarios and considerations
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Using a lockbox equipped with 5G IoT technology, which connects to the internet through cellular networks, can only provide a partial solution for a self-inspection system. In this system, "vetted tenants/buyers" can generate one-time and/or time-sensitive digital keys to access the lockbox to use the metal key to let themselves into the property. However, to ensure the security of the system, it is essential to securely attach the metal key to a strong wire or chain connected to the lockbox to prevent unauthorized access or duplication of the key. It is also crucial to counteract the possibility of key duplication by unauthorized individuals taking a photo of the metal key and reproducing it at a local hardware store. After the self-inspection process is complete, it is important for the real estate agent to ensure that the property is appropriately vacated and secured.
To meet these requirements, the keybox with 5G IoT technology will need to be supported by an alarm (with a motion sensor) and a door closer. These devices must also be equipped with 5G IoT technology to function without onsite power/equipment (which Wi-Fi needs). These devices must also easily attach to the wall of the property, and be easily removed after the property is filled or sold. An alarm on a timer (for example 15 minutes) will ensure that the property is vacated at the end of the inspection and provides enough time for the prospective tenant/buyer to inspect the property and leave. The devices will need to be able to communicate with each other to ensure the system works correctly.
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A self inspection solution with 5G IoT technology
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The typical user behaviour process for a self inspection system with 5G IoT technology is as follows:
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The Real Estate agent vets the prospective tenants/buyers with their own system, preferably through software/apps integrated into the Digital Keys IoT platform with API's.
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Once vetted, the prospective tenants/buyers apply for a digital key to the lockbox, which they can do themselves in the real estate app/software as a one-off unique PIN or mobile app unlock. If the real estate agent does not want to automate this part of the process, they can remotely unlock the lockbox in our asset management software after the prospective tenant/buyer calls the agent when on site.
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Prospective tenants/buyers arrive on-site and unlock the lockbox with their digital key. This action also communicates with the nearby alarm/motion sensor, turns it off, and starts the 15 minute timer. Users then unlock the property with the metal key on the chain in the lockbox, inspect the property, and then lock up the lockbox again.
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After inspecting the property for up to 15 minutes, the prospective tenant/buyer leaves the property via the front door, closing it, and the system confirms that the door is locked with a door sensor on the inside of the door/frame. A sensor could also be added to the back/side door to ensure all doors are closed.
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The alarm automatically reactivates.
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As an added security feature, the prospective tenant/buyer can take a 5-second video in the real estate agent's app of them jiggling the front door lock handle to prove the front door is locked.
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The prospective tenant then leaves the property. If they wish to rent/buy the property, they can access the online application forms in the same RE app, fill them out, and hit a send button to email the forms to the real estate agent for approval.
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Business value
An automated self-inspection system can provide significant cost savings for Real Estate Agencies and agents, by eliminating the need to physically drive to properties for open inspections. By leveraging this technology, real estate professionals can potentially save hundreds of thousands of dollars per year in travel expenses and time.
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Moreover, this system has the potential to expedite the process of filling vacant rental properties and houses much quicker than the current practices. This is particularly relevant in today's market, where rental vacancy rates and availability of houses for sale are at all-time lows. The self inspection system can prove to be especially valuable in remote locations or areas of low demand, and for properties that have been on the market for a long time, where open inspections may not be given priority by Real Estate Agencies.
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Overall, the implementation of an automated self-inspection system can offer significant benefits to prospective tenants and homebuyers, and the Real Estate industry as a whole, enabling real estate professionals to streamline their operations, save time and costs, and more effectively fill vacancies.
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