The continued advancement of artificial intelligence has been one of the major headlines of the last few years, with new AI technology entering the marketplace on a near daily basis. Companies have been rushing to build software on the backs of large language models (LLMs) like OpenAI’s GPT 4 and Anthropic’s Claude 3.5 to solve the specific pain points faced by organizations in complicated industries like healthcare, financial services, and real estate with varying degrees of success. Unfortunately, not all of the AI solutions built for the multifamily industry have been created equal. That’s why it’s key to understand exactly which common pain points faced by multifamily operators are good cases for AI in multifamily, and which aren’t.
AI in Multifamily Use Case #1: Improved Tenant Screening & Background Checks
In the wake of COVID-19 related eviction moratoriums being lifted there’s been a massive uptick in eviction notices being filed across the United States, with certain jurisdictions facing hundreds of thousands of backlogged cases. This huge volume of cases has put strain on housing courts, housing attorneys, and sheriffs offices in many of the major rental markets across the country, making it a difficult and lengthy process for multifamily operators to remove problematic tenants. That makes it more important than ever for multifamily operators to be careful when screening potential renters.
Fortunately, LLMs are built to be able to analyze data quickly and deliver valuable insights, making AI well suited to tenant screening and background checks. Whether it’s using proprietary models to calculate the chance a renter defaults on their lease, or drawing patterns from submitted financial data, AI has the potential to completely change the way property managers and owners screen their tenants. However, it is important to note that certain states have different rules and regulations around tenant screening by AI solutions. Given that certain jurisdictions are particularly restrictive when it comes to the deployment of AI for tenant background checks it’s important that you take these local rules into account.
AI in Multifamily Use Case #2: Tenant Retention & Experience Enhancement
Conversational AI platforms have immense potential for improving tenant experiences and delivering services quickly and efficiently. Rather than rely exclusively on on-site teams to manage tenant communications, AI solutions are capable of managing as high as 80% of all resident inquiries across phone calls, text, email, and webchat, even outside working hours.
EliseAI’s ResidentAI solution is a perfect example of an AI in multifamily product designed to solve the pain points faced by property management companies. ResidentAI drastically reduces the amount of menial tasks your on-site teams have to handle, seamlessly logging work orders, tracking payments, sending rent reminders, and handling follow-up with your residents. ResidentAI also makes a huge impact on renewal velocity, with automated lease renewal notifications and proactive outbound messaging about rent changes and deadlines. Property management companies using the ResidentAI product see their renewal notices accelerated by 15 days on average, boosting property performance and reducing vacancies.
AI in Multifamily Use Case #3: Predictive Maintenance
Handling maintenance requests is a time consuming process for multifamily operators, and nothing ruins the tenant experience like a lingering problem that goes unfixed for an extended period of time. Fortunately, AI can keep property management companies ahead of the curve when it comes to maintenance. By using IoT data and historical performance records, AI can help property managers anticipate equipment maintenance needs, minimizing emergency repairs and prolonging equipment life. In addition, automated design and IoT integrations allow AI to better match amenities to tenant preferences.
The usage of AI in multifamily can also enhance energy efficiency, both driving down costs and creating a more sustainable living environment. This is particularly crucial in cities like New York that have enacted strict energy consumption regulations like Local Law 97, which will eventually add additional taxes to buildings based on carbon emissions. With that in mind, using AI to improve energy efficiency through predictive maintenance can ultimately lead to significant savings for property owners.
AI for Multifamily Use Case #4: Automated Leasing & Virtual Leasing Assistants
We regularly hear from leading property management companies that their leasing teams struggle to keep up with incredibly high lead volume, with some communities receiving thousands of inbound messages on a daily basis. High inbound call velocity can result in missed leads, wasted time qualifying the wrong prospects, leaks in the leasing pipeline, and lower than desired lead-to-lease and occupancy rates. This issue is even more pronounced in the affordable housing segment where it can prove incredibly difficult to even get prospects registered for waitlists, let alone scheduled to tour and rent an apartment or home. The problem is further compounded by the fact many property management teams are not particularly technically savvy, and can struggle to manage multiple software solutions on a property basis. Fortunately, AI can simplify the lead management process and reduce the need for expensive and cumbersome single-point solutions.
Virtual leasing assistants and AI leasing tools can manage inbound communications across webchat, phone calls, text messages, and email, and push these conversations directly into a single platform to enable your leasing teams to work more effectively. For example, EliseAI’s LeasingAI product handles prospect inquiries 24/7, providing helpful answers, scheduling tours, and helping boost lead-to-lease rates by 30% on average. LeasingAI automates 90% of the leasing workflow, allowing your teams to intervene only when specific human expertise is required. Instead of spending their days managing guest cards and dealing with unqualified applications, leasing agents can focus on delivering fantastic tour experiences while LeasingAI handles the menial work they would otherwise be bogged down with. All communications are pushed into EliseCRM, making it easy for your team to quickly check what conversations the AI has passed to them and how leads are progressing through the funnel.
AI in Multifamily Use Case #5: Smart Building Management
As touched on in the earlier, energy efficiency is a major focus for property management organizations, and AI is transforming how buildings are managed to reduce consumption. AI-enabled systems monitor occupancy patterns and automatically adjust heating, cooling, and lighting based on real-time data. This optimization reduces energy waste and leads to significant savings on utility costs for both property managers and residents. By integrating AI into building management, multifamily properties can minimize their environmental impact while maintaining tenant comfort.
In addition to energy efficiency, bringing on AI in multifamily properties can help enhance security through advanced access control systems. AI-powered facial recognition and biometric access streamline the entry process, providing tenants with a seamless and secure way to access their homes. These systems reduce the need for traditional keys or access cards, lowering the risk of unauthorized entry. Ultimately, AI-driven access control improves tenant quality of life, protects your properties from risk, and reduces administrative lift on your on-site teams.
AI in Multifamily Use Case #6: Delinquency Reduction
Managing rent collection and delinquency is one of the worst parts of a property manager’s job. It can lead to uncomfortable and emotionally charged situations, and there’s a reason that it’s traditionally relegated to the more junior staff members. But at the end of the day the rent has to be collected, and sometimes that requires property management teams to be a little pushy. Luckily, AI can help make this undesirable task much easier, all the while having an outsized impact on property NOI.
Property management companies use EliseAI’s ResidentAI solution to reduce bad debt, resulting in an average of 52% reduction in delinquencies per quarter. ResidentAI does this by sending both former and current residents customized rent reminders and collections follow-ups across email, call, and text, with community-specific payment instructions and enhanced visibility into outstanding payments. It’s also particularly easy to make a strong business case for the adoption of an AI delinquency tool, as we’ve seen organizations quickly reduce bad debt and improve property cash flow within weeks of the tool going live. The impact of an AI-powered delinquency tool on the bottom line can be immediate, as opposed to some AI solutions that may take additional time to prove ROI.
Looking to Add AI in Your Multifamily Portfolio?
These use cases for AI in multifamily covers a wide spectrum of potential areas where new tools can make an impact. AI is already helping property management companies run their buildings more efficiently, weed out potentially risky tenants, and improve energy consumption, with the potential to expand to other areas in the future. For today however, if improving leasing velocity without increasing headcount, or reducing bad debt are key business objectives for your team, bringing on EliseAI’s conversational AI products can make an immediate impact and allow you to quickly recognize ROI on tech spend.