AI Helps Cut Costs, Aids in Fraud Detection in the Multifamily Space
From tenant retention to the streamlining of property management, one expert speaks about how AI is revolutionizing how owners and managers approach multifamily space.
Artificial Intelligence (AI) is the latest buzzword in the business world. Although controversial, technology mimicking human problem-solving and decision-making capabilities can offer many benefits to multifamily owners and managers.
Thanks to its advanced pattern recognition and machine learning, this branch of computer science can help improve decision-making and cut HR costs. According to Daniel Berlind, CEO of Snappt, a data-driven fraud detection software company, it’s particularly impactful for application authentication, property operations and tenant retention.
Fraud Detection
Applicant fraud is a significant issue for multifamily managers and owners, Berlind says. Unfortunately, with the advancement of photo editing technologies, forgery has become more prevalent. “Five or 10 years ago, making a perfect-looking fake document required serious photo editing chops,” he says. “But now, the average person can do it in a couple of minutes.” This past year, Snappt found that nearly 8% of the applicants assessed had submitted fake materials.
Forgery is a particular hazard when it comes to collecting self-reported data, like pay stubs and bank financial statements. This type of information is critical, since it helps leasing managers predict applicants’ future behavior (like whether they’ll pay their rent on time).
As Berlind explains, applicants can commit fraud in two main ways:
- They can use a PDF editor to download and alter an existing document.
- They can use pixel perfect templates to create new documents.
Fraudsters can commit fraud themselves (with help from online communities) or hire companies to do the dirty work for them.
Unfortunately, when leasing managers piece together and evaluate all this data, they’re “using the human eye or their own forensic accounting skills,” laments Berlind.
That’s why tech products like Snappt are so helpful. With its fraud detection algorithm, Snappt can assess applicants more quickly and accurately. “Using machine learning, it’s pulling together hundreds of thousands of different data points to detect anomalies,” he explains.
“Document forgery is so impossible to detect with the human eye. It’s only in partnership with AI that teams and owners can fight fire with fire and stop these bad actors,” he adds. Because fraudsters continue to improve their methods, Snappt’s in-house fraud forensic team frequently scours the Internet and dark Web to keep up with the latest advances. As with the development of anti-virus software, it’s a “constant cat and mouse game,” says Berlind.
Property Operations
AI helps property owners and managers save on HR costs and leverage employees more strategically. Thanks to technology, they can outsource lower-level tasks to AI. Think: managing maintenance service requests and accounting processes, answering questions from prospective tenants, and scheduling showings with potential tenants. After all, residents and prospects won’t expect to interact with humans when it comes to these more basic functions. Plus, systems can best keep track of service tickets and queries.
Tenant Retention
As a result, staff can focus on resident-facing activities, like planning and hosting events, offering tours to prospective tenants, and providing concierge services. “When we’re talking about the day-to-day, AI can remove friction and help managers focus on the human connection,” Berlind says. By assigning employees to these higher-level needs, property managers and owners can boost tenant engagement and retention.
Decision-Making
Thanks to its pattern-matching capabilities, AI can also help property owners and managers evaluate data more accurately. For instance, the technology can project the future profitability of buildings, analyze thermostat patterns, and uncover the geographical sources of tenants. This can lead to smarter decisions, like whether to purchase a specific property, how to reduce energy costs, and where to allocate advertising dollars.
