You are going to invest in a property where you require to look for over 500 pages. Those all documents are prepared and stored in different offices or places. Just imagine this scenario. We are sure it is difficult for you to verify and make an informed decision in that case. Here comes the role of Automated Lease Abstraction. In this blog, we will discuss every aspect of ALA.
What is Automated Lease Abstraction?
The real estate sector involves many documents that you require to read and understand for making the right decision. Locating information is a time-consuming process in this fast-paced life. Lease abstraction is a process that makes all the financial, business, and legal data available in one place.
Firstly, information is collected from all the relevant sources, and then it is compiled into a report for further saving to the central database. That way, It makes a property portfolio for the benefits of the entire stakeholder like the seller, buyer, lender, etc.
When the process of lease abstraction is done by involving the technology, it is called automated lease abstraction. It involves optical character recognition (OCR), Machine Learning (ML), Internet of things (IoT), Natural language processing (NLP), and others.
It involves different elements like property address, Guarantor details, Lease dates, landlord’s address, Property description, Tenant’s address, Rent, Lease renewal options, Hidden termination clause, Security deposit, and Exclusive use clause.
Benefits of ALA?
Saves time, Effort, and Cost for every stakeholder
In this digital world, we all are going towards the digitalization of every service. Companies adopt whole lots of software for different purposes to make working easier, safe and to save time. Businesses use technology to create databases and software applications. In turn, it saves time, cost, and effort.
The whole process of accessing property-related documents becomes easy. ALA also allows real-time data updates, notification alerts, tax calculation, etc.
Leverages use of technology for data Analytics
Data has become vital in current days. If the data is available in one place then any experts can extract the information from the data. It is a data-first approach for remaining relevant. As a business, you get a competitive edge by combining ALA with data analytics.
Experts will do the data mining that will bring very detailed information about a particular property portfolio. Later, that information may be used for making decisions like divestments, diversification, acquisition, sell, and more.
Averts and Mitigates Risk for Everyone
Informed decisions are helpful for every player in the segment. ALA covers the rights and obligations of every player. Thus it helps in making the compliance process easy. It involves less human intervention, so the probability of error also becomes less. Tapping the opportunity with less risk helps in making perfect decisions.
Reduces repetitive tasks and helps in performance monitoring
In the real estate business, time is a costly asset. You cannot indulge your staff in day-to-day repetitive work in case of using them productively. Paper documents or fragmented data leads to work repetition. Once you have ALA, you create business value and use your human resource in a better way.
It has become very relevant for businesses to tap the use of technology through Automated Lease Abstraction. As a business, you do the investment rather than expenditure into this process.