As a real estate developer, you’re considering the purchase of a large, vacant steel mill to develop into a new residential complex. You see the building is in disrepair, but to what extent? No one seems to know.
Imagine if you could charter a flight up and around the building, across the roof and down the back side – which is flanked by a large body of water where no human can walk. Of course, you’d want to do this quickly and be able to examine the results closely before making your decision. Oh, and it shouldn’t be too costly since you haven’t committed to the property yet.
Enter: Drones, otherwise known as unmanned aerial vehicles (UAVs).
No longer exclusive to military defense and police surveillance, drones are increasing efficiencies in industries like real estate. In addition to providing due diligence on an acquisition, as in the above example, drones are also helping developers in mitigating their risk on existing buildings, insurance companies in post-damage catastrophe assessments and brokers in making a stronger case for premium reduction at renewal time.
Regulated by Transport Canada, drones must be registered before flight, can only fly at or below 122 metres (400 feet) and are subject to a number of local and Canadian Aviation Regulations. Despite these limitations, the number of real estate firms, insurance companies and brokers chartering drone flights has skyrocketed (pun intended). In fact, the number of drones has increased so quickly that new restrictions on drones in Canada went into effect in June 2019.
Drones can help your real estate business with:
Proactive due diligence on an acquisition. While real estate firms and insurance inspectors and brokers may have once upon a time climbed onto a roof to assess damage and repair needs, using cameras to document areas of water intrusion and ponding, drones are doing this more efficiently and proficiently. Furthermore, issues not recognizable to the naked eye, or those located in hard-to-reach areas can be captured by drones with thermographic cameras. Skilled drone pilots are trained to revisit, or zoom in on areas of potential concern that surface during flight. Issues including roof uplift, water intrusion and complications with HVAC and other mechanical equipment that would have otherwise gone undetected can be uncovered by drones.
Risk mitigation. Properties looking to improve site safety, reduce accidents and identify existing hazards can use drones to access and document areas of their facility they don’t get to. Using drones for risk mitigation is like having eyes in the sky, allowing real estate owners and operators to leverage technology to solve existing risk.
Property policy renewal strategy. When an insurance broker can prove a property manager is doing all they can to mitigate risk and get ahead of potential liabilities, the case for premium reduction is that much more viable. Documented findings from a drone flight can be accompanied by a concrete action plan for improvement, and can serve as an acceptable underwriter property assessment tool.
CAT claim, post-damage assessment. Carriers and brokers alike are investing internal resources and partnering with drone companies to alleviate the demand of assessors during CAT events like hurricanes and wildfires. Drone documentation of damaged areas provides claims adjusters with everything they need to adjust a claim from their desk, hours away from the CAT site.
Increase efficiencies and champion safety. For real estate owners, operators and insurance underwriters and brokers, drones are increasing efficiencies, increasing safety and serving as a second set of eyes. And it’s only the beginning. As drone costs continue to come down and their technological capabilities continue to rise, they will be employed more often across the real estate market.
Contact your HUB Real Estate Specialist to find out how your firm can leverage drones for proactive due diligence on a potential or existing property.