With the cooling of the once red-hot housing market, brokers, buyers and bankers are keeping a close eye on property valuations. While real estate is one of the world’s most valuable asset classes, the traditional process of valuing a property is ripe for disruption. Today, property valuation and rents are based largely on size, neighborhood, and demand; insurance claims are also based on property size and value. But because many properties are not accurately measured, the valuation can be incorrect—which subsequently affects listing prices, surrounding properties, taxes, leases, and insurance. Advances in light detection and ranging–based (lidar-based) reality capture can address this issue by increasing the accuracy of the property valuation process. Lidar combines 3D and laser scanning to provide a high-resolution view of its surroundings.
Impact of inaccurate property data
The traditional process of measuring properties has always had a certain margin of error. Though commercial properties and large residential properties are typically measured by a surveyor and an as-built consulting firm—which can then take days or weeks to create models and floor plans—many properties are documented with a tape measure or, more likely today, a free app with questionable accuracy. More often than not, dimensions were rounded up for greater appeal. As a property changed hands over the years, the erroneous information was re-recorded. Factor in human error, and discrepancies between actual and listing measurements should come as no surprise.
“During our initial market research, we found alarming inaccuracies in existing measurements and floor plans,” says Oliver Breach, founder and chairman of spatial data startup Pupil, which captures and publishes 3D information about real-world interiors. “We produced a comprehensive internal study that highlighted how widespread this problem is. It means that valuations of residential property, particularly in populous cities where space is at a premium, are more often than not based upon unreliable data.”
Inaccuracies of even a few feet can have a big impact. Aside from the valuation issues, imagine using the as-built records to guide a renovation. Without an accurate blueprint of the property, pipes and wires may not exist where they are mapped on the models. This mismatch is typically not discovered until walls are opened, adding delays and costs to a project.
Technology advances and applications
Though free measuring apps are convenient, sophisticated and increasingly accessible reality capture technology has the potential to redirect the property valuation process down a path of millimeter-levels of accuracy. “The introduction of reality capture products has made it easier to accurately measure and capture a space while ensuring the integrity of our team’s reputation,” says Corey Weiner, reality capture expert and owner of C2A Studio in Boca Raton, Fla.
Reality capture devices can help monitor the ongoing progress of a project structure and interior, allowing quick comparison of as-built and as-designed models for quality control and early detection of discrepancies. The data sets created by 3D reality capture also provide rich documentation for easy reference. This is particularly helpful for sites that are difficult to access, reach, or revisit for remeasurement or reassessment. As a result, reality capture technology can also help lower carbon footprints by reducing travel to the site.
Pupil, for example, uses the 3D data from laser scanners to create virtual tours and accurately measure properties to differentiate property listings. Prospective buyers can see multidimensional pictures of the property, including scans and point clouds showing what lies behind walls, take a 3D virtual tour, and review detailed reality capture scans for a more complete understanding of the property. The scans can also produce a digital record for realtors, property owners, and town assessors that can be archived.
Evaluating reality capture products and providers
While the market has no shortage of lidar scanners, a professional grade product offers greater accuracy, clear and easy-to-understand point clouds, and the capability to replicate and turn the physical world into a virtual environment. Prospective customers should consider the features below when selecting a lidar-based reality capture scanner product or when hiring a consultant specializing in lidar technology.
- Lightweight: The scanner should be easy to transport and not require separate or special shipping, which would incur insurance coverage and increase the risk of loss or damage.
- Learning curve: The product should be easy to master within a few hours.
- Speed: Users should be able to quickly capture a space on the first take.
- Visual Inertial System (VIS): A scanner with VIS technology knows where it is located in space and what has already been captured so users can check that they have documented everything necessary before leaving the site.
- Distance: Find out how far away the scanner will be from a space and how that impacts the accuracy of the scan.
- Accuracy: Products come in a range of accuracy levels; a higher degree of accuracy generally comes with a higher price. Customers can determine their accuracy needs based on project scope, use frequency, and budget. Some products can achieve a 4-millimeter accuracy at a distance of 10 meters.
- Output: The scans should be clear and easy for users to understand.
- Collaboration: Wireless capabilities make it easy for users to upload scans in real time to office colleagues who can provide input before the scanner or surveyor leaves.
- Extreme weather: Check if the scanner can be used outside and the degree to which it can withstand heat and cold.
- Additional software/hardware: Check if the scanner comes with software or if it requires additional licenses. Also, check if it needs additional hardware, such as a tablet.
The ability to document project exteriors and interiors accurately and consistently will deliver previously missing data insights and improve the property listing and valuation process. Having an accurate digital record helps avoid potential disputes and bolsters a market on the cusp of significant change.