How The Real Estate Industry Is Getting Smarter

It’s common knowledge that homes are getting smarter all the time. Increasing numbers of devices now have some form of network connectivity to improve their performance. Collectively, these devices are known as the Internet of Things.

It's revolutionizing everyday life and everyday work. To explain further, Mark Burns, Director of Pure Investor shares ways in which IOT is benefitting the real estate industry.

The IoT is making buildings more valuable

The astute use of smart devices can improve buildings in all kinds of ways. This makes them more attractive to buyers and hence more valuable. At present, this is probably most obvious in the commercial sector.

For example, last year an Amazon warehouse in Dunfermline, Scotland sold for around £66.8 million. This set a new record for a single-asset industrial investment deal in Scotland. It was, however, clearly part of a trend. In 2019, Amazon warehouses in Bristol, Paris and Barcelona were sold together for a reported £388 million.

In all cases, the fact that the units were still tenanted by Amazon was probably a factor in the price. After all, nobody could reasonably doubt their ability to pay their rent in full and on time. The main reason for the price, however, was exactly the reason Amazon wanted (and needed) these warehouses in the first place. It was the extensive use of IoT technology.

Amazon is all about efficiency in everything it does. A large part of the way it achieves this efficiency is by automating everything it can automate. Amazon’s warehouses are masterclasses in how to use the IoT to maximize efficiency and minimize the use of expensive resources such as humans.

The IoT helps optimize efficiency

The IoT is all about collecting data in the real world to be processed in the digital one. Smart devices use their sensors to collect data. This is then sent online to be processed by more powerful devices.

The results of this processing are then made available to humans in an appropriate format. This is often via an app. Smart device may sometimes be able to make recommendations as to the best course of action. It is, however, entirely up to the human whether or not they accept these recommendations.

In a typical IoT implementation, humans will set automated rules for common scenarios. For example, a homeowner might set minimum and maximum temperatures for their home. If, however, an unusual situation emerges, the human can give the smart device specific instructions. They can also override the general rules they have already set.

As a result, the more homes leverage the IoT, the more efficient they become. This results in cost-savings for the owners. It also results in a reduced environmental footprint as resources are used only when really necessary.

The IoT helps to save energy

It probably shouldn’t come as a surprise that the IoT has become hugely popular as a way of managing climate control and lighting. As any homeowner will know, these can both generate huge bills. This means that the initial outlay for smart devices can often be recouped fairly quickly.

What’s more, using the IoT for heating and lighting is simply vastly more convenient than using traditional systems like timers. With timers, you’re always having to take your best guess. If you guess wrong, then there’s often nothing you can do about it. With the IoT by contrast, your systems will be working on the basis of actual, hard data.

The IoT massively improves building management systems

Like most other sectors, building management has long since moved to a digital-first approach. The IoT has made it possible to take this to a whole new level. Right now, the main focus is generally on running maintenance efficiently.

With the IoT, it is becoming increasingly feasible to pick up on maintenance issues before they cause a problem. Even when this is not possible, the IoT generally picks up on problems very quickly. This means that even reactive maintenance can be undertaken in the shortest possible time.

Going forward, the same approach may be applied to many other areas, such as cleaning. The IoT’s predictive capabilities may not be of great use here. It could, however, be very helpful to have cleaning-related issues reported promptly. For example, if liquid spills, then you want it cleaned up as quickly as possible to avoid a slipping hazard and/or damage to the building.

The IoT has helped to improve building security

Thanks to the IoT, SMBs and domestic homes can now implement a much higher level of security. What’s more, it’s often possible to do this without compromising on convenience. Possibly the most visible example of this is the increasing use of smart doorbells.

These do much more than just let you interact with someone without having to open your door. They effectively allow you to monitor your property remotely and to receive status updates on relevant activities.

The IoT can be used to manage access to buildings

The IoT offers a potential solution to a very 21st-century conundrum. Homeowners need to keep their homes safe. They may, however, want to let people into them even when they are not there. Right now, for the most part, that involves either giving them a key or leaving a door unlocked. Neither of these options promotes security.

With the IoT, by contrast, it is possible to open doors remotely. This basically means that you can answer your front door from wherever you are. You can also set up rules to allow the person to exit when they wish. This ensures that they can quickly remove themselves from any unexpected dangers such as a fire.

At present, this technology is only in very limited use domestically. It is, however, easy to see why it is likely to go mainstream in future. From a homeowner’s perspective, it enables them to schedule services without having to worry about whether or not they will be at home.

From a business perspective, it makes it much easier to deploy resources efficiently. For example, a homebuyer could go to a property and be let in remotely. They could then have their tour guided by an estate agent located in their own place of work.