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The Property Management Show is based in Silicon Valley, and the beauty of our location is that we get to meet entrepreneurs driving property management innovation. Today, our guest is Daniel Shaked, the founder of Home365. This is a company that sells maintenance end-to-end through technology, specifically using artificial intelligence (A.I.) and their own network of service providers for one flat fee.
Home365 and Property Maintenance
Traditional industries can be more efficient by leveraging cutting-edge technology, and that’s where Home365 comes in. They want to connect homeowners and property managers with service professionals, and they want to do it in a way that’s more reliable and more cost-effective.
There can be pain and friction between homeowners and maintenance service providers. There’s a low level of trust, and Home365 believes they can remove that pain and provide a better experience when you need maintenance on your property. They believe maintenance is one of the biggest components of property management, and it should be handled by professionals in a predictable and transparent way.
There’s a shortage of qualified contractors, vendors, and tradespeople all over the world. It’s a global pain.
But, the question you may be asking is – how does Home365 help property managers? It may sound like the business platform actually competes with them. After all, property managers are in business to solve maintenance issues for homeowners.
The way Daniel sees it, a property management company’s main job should be to manage more doors and to do less manual work. Instead of focusing on logistics, a growing property management company needs to focus on winning more business. Remember, only 35 percent of rental properties in the U.S. are professionally managed. There’s a lot more business to go after. Do you want to spend your time going after that business or chasing down maintenance service professionals?
Daniel believes Home365 offers a real value proposition for property managers.
Leveraging Data and Evaluating Quality in Maintenance Professionals
Daniel says that Home365 can predict what will be spent on each property by leveraging the data they collect. Using A.I. and looking at a house and its address, the company can predict what the home will need in maintenance over the next five years. That allows them to build an insurance product where property owners pay a monthly premium, and then after that – they have no expenses when repairs are needed. It creates freedom and removes obstacles.
There’s also an element of service assessment. Home365 also uses data to assess the quality of the work and the customer service that’s provided by vendors and contractors. The good companies are rewarded with additional work. It’s tech-based and works like a credit score. You don’t necessarily do anything to impact your credit score – you pay your bills and you create a financial footprint. This technology does the same thing. Service providers do their work, answer their calls, and make their repairs. Home365 aggregates how those tradespeople are dealing with incidents. They track how they communicate and what tenants think about the work. It allows them to quickly figure out who the best vendors are.
For example, a person who is always late for meetings will never finish the tenant’s turnover on time. A person with a habit of rescheduling when he gets a better job somewhere else will not always be reliable.
If technology can be used to sort out the reliable vendors, the fair prices, and the good workmanship, property managers can win, and so can their owners and tenants.
Algorithms are used to match the service workers to the problem. The right people are going to the right projects and there’s more time and cost efficiency. The Home365 platform can find people who did similar jobs at similar properties for similar tenants.
Tenants and homeowners are guided in the description of the maintenance that’s needed. They get something that’s like a teleprompter on top of their screen, and they can explain the problem, record video, and share pictures. This structures the best solution. The full project description is sent to the vendor who seems to be the best match. The vendor gets to see the same description of the problem. Then, all parties get access to a messaging platform. They can video conference or chat, and that often reduces the need to travel and diagnose a problem.
This all happens in real-time communication with real-time technology.
How Can Property Managers Make this Service a Revenue Center?
This can be an interesting way for property managers to offer a new product to their customers.
Every property comes with a flat-rate price for maintenance. If your owners pay this flat rate every month instead of paying for maintenance issues as they happen, you no longer have to wait for their approval before fixing something.
With a modest markup, this can provide some additional recurring revenue. Instead of marking up every maintenance invoice 10 percent, you’ll have this regular income on a monthly basis.
Many property management companies lay out a three tier pricing plan. There’s a starter plan, a traditional plan, and the third plan or the premium plan might offer this all-inclusive maintenance model.
Artificial Intelligence and the Future of Property Management
A.I. can identify patterns in data. It’s clearly different than how we used to build software and systems. Especially in property management, we’ve always had to say IF this happens, THEN that will solve it.
With A.I. the data organizes itself, and the system learns and understands things that we humans simply cannot see. Pricing and maintenance events become predictable for a property. It’s possible to know how many garage doors won’t open next year in Palo Alto or how many toilets will be clogged in Las Vegas. If you can do that, you can reduce costs and increase efficiencies. That’s how the industry is changing around technology.
We often think that maintenance issues just happen.
Things break unexpectedly.
But, statistics are everywhere, and if we’re paying attention, nothing just happens.
Building something like this is hard. There are a lot of A.I. companies where the technology doesn’t work right. If you make a wrong decision with a car, that’s life or death. Netflix can make a mistake and there’s really no downside. If Home365 prices a maintenance event in the wrong way, they are taking the cost on that. They take on the risk, and that risk is built into their pricing model. With time, they expect to reduce that risk. The technology gets smarter with time, so a more precise and predictable model will emerge.
Future Predictions: What Can Property Managers do with this?
If you’re an average property management company with 300-500 doors, what should your next move be?
According to Daniel, you should be working on winning more homes, and with less people. Leverage the technology that’s available and be smart about the data. If you measure everything and you’re data-inclined, you can make smart decisions. It might mean firing a customer.
Aggregate and leverage technology. It’s the overarching concept for winning in next few years.
What is the future of the connected home?
The younger generation is driving innovation, and even older generations are using Facetime and smart phones. We have Alexa delivering food to our doors and turning on our lights. These are meaningful services that people need and appreciate. They’re powered by technology and by sensors.
In the future, every separate element will talk to all the other elements. Your fridge, locks, security system, vacuum cleaner and music will all talk to each other. That’s a connected home, and Daniel sees Home365 fitting in. The plumber can be delivered similar to the way Whole Foods delivers your grocery order.
This is the smart home investment. Most homeowners spend $5,000 or $6,000 a year to maintain their home. A leak detector under the water heater will tell you there’s trouble before it explodes. A small vibration detector on your air conditioning unit will tell you something isn’t working right. Your maintenance people can get there before the whole system fails. Microphones can track termites. You can listen to the noises of pests and not only will you know there’s a termite problem; you’ll know exactly what kind of termites they are. That allows you to address the problem the right way.
Distribution is required, so new properties need to be built to accommodate these things. The technology is available, and companies like Home365 are working to integrate the signal and the response.
If you’re interested in learning more about technology like this, visit Home365.co.
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