Last modified on October 10th, 2023
By Megan Eales Monroe
The property management industry is about to undergo a new wave of digital transformation thanks to the rapid advancement in generative AI ushered in by large language models, also known as “LLMs.” Open AI’s ChatGPT is an example of an LLM, but it’s not the only one. So what does an LLM do?
“It can understand and generate human language, and that capability makes it perfect for less technical users to interact with technical systems,” answers SVP of Engineering at AppFolio, Matthew Baird. He goes on: “It can summarize, it can translate, it can generate content, and it can answer questions, making it useful for diverse users and diverse use cases. And from a business perspective, it can facilitate the automation of repetitive tasks, allowing folks who work on computers to supercharge their productivity, leaving more time to strategize, build relationships, learn new skills… essentially, find more meaning in their day-to-day.”
For property management teams, what this means is that you have an opportunity to transform the way work is done in your business, for the better. By further reducing the time and energy spent on property management busywork, this type of AI can reasonably lead to less burnout from repetitive tasks, heightened skill sets, and a faster path to productivity for new team members.
Author and futurist Arthur C. Clark has a famous third law which states that “Any sufficiently advanced technology is indistinguishable from magic.” It’s easy to see how generative AI fits this description. Though some of us may not understand the inner workings of generative AI models, what they can produce now feels startlingly magical. Whether it’s an original song generated to match the parameters you specify or a customized meal plan based on your dietary needs, generative AI tools can summon up — and iterate on — original content instantaneously.
LLMs make AI readily accessible to us. This quality has acted as an accelerator, driving rapid adoption, unlike any platform before it. Businesses are experimenting with this technology as well, due to the immediate, tangible benefits people experience, even in their first interactions with this nascent technology.
Research from Stanford University has demonstrated how generative AI led to a 14% increase in productivity for customer service agents at a Fortune 500 company. One of the researchers’ key findings was that the system “took people with just two months of experience and had them performing at the level of people with six months of experience… So it got them up the learning curve a lot faster.”
It’s not hard to see the promise this holds for property management companies. In a recent AppFolio survey of more than 2,000 property managers, we saw that employees at property management companies are spending more than a third of their time on tasks they consider “busywork” — this is time that could be better spent on delivering a better resident experience. Yet 63% of property managers are staying on the sideline for now, with only 37% saying they believe this technology can make their role more efficient.
Any disruptive technology inevitably also comes with challenges, and AI is no different. With such a powerful new technology, it’s important that innovators don’t allow the exciting benefits of AI to distract from the need to build AI technology responsibly.
Recognizing this, our team of AI experts developed a set of principles that guide the development of all of AppFolio’s AI-powered products. “This framework, and the team behind it, help us to make sure that we’re building AI products responsibly, and that our tools have a positive impact,” says Cat Allday, VP, AI Initiative and Product Operations at AppFolio. “Our framework requires the AppFolio team to first think about our responsible AI values, including transparency, accountability, and security — we consider these criteria before we even write one line of code. Though it holds great promise, AI can never take the place of the real human connections that are at the heart of real estate management. We aim to build AI technology that creates more space for those interactions that really matter.”
Practical Applications in Property Management
Let’s explore some examples of how this transformational new breed of AI might create a new way of working in property management in the near future.
It could lessen the lift of data analysis, giving you more headspace to discover and act on insights.
Property management businesses generate and house large quantities of data, on everything from lead demand metrics, work order completion time, property income and expenses, and more. AI can instantly make sense of this data for us.
Let’s say you’re prepping for a business review with a top investor. Historically, you’d spend hours running and reviewing reports, and summarizing your takeaways. With LLMs working for you, you would be able to simply ask for the information you want. “How much time on average did it take to complete work orders closed in the last 90 days at Property X? What is the average days vacant by floorplan at Property Y? How does this compare to last year?”
Generative AI may soon be able to tell a coherent, actionable data story based on a prompt written in plain language. Businesses that position themselves to harness that power will see significant benefits.
It could become your most impactful employee onboarding resource.
It’s no secret — figuring out how to reduce training time for new hires without completely overwhelming them can feel impossible. But what if your system trained your team how to use it, rather than you training your team on how to use software? That dream may become a reality with AI.
Picture this: you’re welcoming a long-awaited property manager to the team. They’re willing. They’re eager. They’re competent. They just don’t know your business — yet. You take them on the office tour, you present the annual business strategy, and you give them their login to your property management software. “Let me know if you have any questions!” you say, and then, you go back to your desk to work through your action items before lunch.
Your new hire signs in, clicks around a bit to get oriented, and types in a question: “Where is my rent roll for Property Z?” “How do I move out a resident?” “How can I see unassigned work orders?” Very soon, AI systems will be able to clearly and accurately answer these basic questions, freeing you to focus on coaching your new hire at a more strategic level.
It could become the doer of to-do lists, allowing your teams to accomplish more every day.
One of the most breathtaking capabilities of generative AI systems is the ability to respond to nuanced questions with answers that are often indistinguishable from a human response. This potential can be harnessed to draft and send communication effortlessly, and to initiate actions or processes on your behalf.
Think of a maintenance technician: their productivity in the field directly impacts the bottom line, and the last thing you want is for them to be bogged down by paperwork. Inputting work order details is necessary, but it’s not what you hired them for.
Imagine enabling your tech to open their work order on their phone onsite, verbally dictate their update, and close out the work order. No typing, no lag time — the AI understands their input, applies it to the work order, and boom! They’re on to the next project. This is the future of maintenance.
It could soon map your business processes and execute them automatically, on your behalf.
There’s no shortage of processes in real estate management, but too few businesses have implemented sufficient documentation and oversight to keep things standardized and running seamlessly. With AI-powered automation, what started as process manuals and onboarding binders could soon be delegated to software.
When users can interact with a large language model through a chat dialog, new possibilities for process optimization arise. The AI may soon be able to infer the rules behind how your business operates, suggest new ones, and best of all — actually carry out the work governed by those processes.
For example, the system could look at all of the unit turn interactions that happen commonly in your business, and detect patterns. Maybe it notices that every time a move-out is coming up, your team dispatches the same vendor to re-paint the unit. Or perhaps a trusted local handyperson is your top choice when available, but they work a limited schedule. In the not too distant future, the system could identify these correlations, ask if you would like to create rules, and would from then on know who to contact, collect quotes from, and assign projects to, without you needing to initiate anything.
Delegating these core business processes to AI can keep things humming along seamlessly in the background while your team focuses on the bigger picture.
How to get your business ready for this next phase of AI
So how do you get your team ready to embrace this next phase of AI?
For one, you can begin by implementing the AI-powered property management tools already available today. Within AppFolio Property Manager, that includes our AI Leasing Assistant Lisa, Smart Bill Entry, Bank Feed, Smart Maintenance, FolioGuard Smart Ensure, and many more. Embracing these tools today will not only increase team productivity by automating repetitive tasks but also help your teams get familiar and comfortable with this type of technology.
Start experimenting with generative AI tools like ChatGPT, Google’s Bard, or the new Bing Chat integrated into Microsoft’s Edge browser. While these generalist applications aren’t able to leverage your business data directly, they do give your team shortcuts, such as drafting simple communications or coming up with ideas for resident engagement activities. You can even start using generative AI directly in AppFolio Property Manager today — as part of AppFolio Labs, our customers can now enable the ability to automatically generate marketing descriptions that leverage the unit and property information stored in their database and turn them into compelling copy for listings.
Download our free guide below to learn more about AI and how it can benefit your property management business.