When you look at the real estate industry, high-tech isn’t exactly the first attribute that comes to mind. After all, we’re talking about an industry where people still have to fax documents, sign with pen and paper, and physically meet at closing tables to finalize a transaction. But if you study the evolution of the Internet of Things (IoT), it looks like this could be the next industry ripe for disruption.
A Few Ways the IoT is Impacting the Real Estate Industry
The real estate industry is notably diverse. Apart from the obvious geographical diversity that exists from location to location, there’s also a litany of specializations and subcategories. There’s commercial, residential, and industrial real estate – just to name a few. But the exciting thing is that the IoT is impacting each and every one of these niches in unique ways.
1. Meet the Modern Smart Home
Don’t look now, but homes are becoming more intelligent. This is partly due to the proliferation of automated technology at economies of scale, but also related to the increase in the number of millennial homebuyers and renters who have high expectations when it comes to technology.
“Smart-home automation basically means that all of your gadgets and devices are linked together on the cloud,” explains Green Residential, a Houston-based property management firm. “You can control temperature, lighting, security, and more from a single device, such as a smartphone, and these devices can detect your habits to create a better living experience.”
Most of today’s smart home technology market involves homeowners installing hardware and software into existing homes. In the coming years, look for these technologies to be integrated into the homebuilding process.
2. Advances in Property Management
For businesses and real estate investors that manage lots of different properties, trying to gain a top-down, real-time view of what’s happening can be challenging. The IoT is changing this, making it possible to stay on top of even the finest details.
SAP Cloud for Real Estate is one example of an advanced cloud platform that allows for real-time analysis and compliance with the latest IFRS leasing standards. It’s currently being used by some of the biggest names in global real estate, including Diakonie Michaelshoven, Frankfurt Airport, and MEAG.
3. More Specialized Buying Process
A decade from now, we’ll look back at today’s home buying process as somewhat archaic. As the IoT scales and more data becomes available, the house hunting experience will be totally different. Already, the Chicago-based Urban Center for Computation and Data, Argonne National Laboratory, and the University of Chicago are partnering together to launch what they call the Array of Things.
“It’s a network of interactive sensors collecting both passive data, such as weather and air quality, and data about how people are using the area, by measuring ambient noise and counting nearby Wi-Fi– and Bluetooth-enabled devices (without identifying users),” Meg White writes for RealtorMag.
The plan is for researchers to make this data available as a free utility to the public – something that would revolutionize the entire buying process. “Tech developers can then use the data to create helpful tools,” White continues. “Imagine an app that combines air quality data with traffic patterns, telling allergy sufferers the best time for a bike ride.”
We’re Just Getting Started
The most exciting thing is that we’re just getting started. The real estate industry is only now being introduced to the IoT, which means we’re likely to see considerable innovation over the next couple of years.
Whether you’re on the real estate side or the technology side, exciting developments await.
As always, leading brands like SAP will be at the forefront of this evolution.