The property sector is traditionally regarded as a stable and safe investment. However, rapid digital innovation changes and new business models are forcing the market stakeholders to take a fresh look at the value and risk in this sector. So, real property market participants should understand the barriers to and opportunities for improving the productivity of the sector through the PropTech toolkit.
What is PropTech and How it Goes
What does PropTech mean for real property stakeholders? What solutions can be offered? What are the benefits and challenges of such innovations? We are going to look at some outlines of how these changes are playing out and ways that service providers can respond to them.
First and foremost, let us сonsider the meaning of the concept. Property technology, in short, called PropTech, is positioned as a generic term used defining the global adoption of technology innovations or new business models for the real property marketplace. Moreover, it is a force with a far larger sphere of influence and transformation algorithms.
Here is a definition by James Dearsley, a keynote speaker, who already became a paradigmatic author about the real property industry outlook:
Proptech is one small part of a wider digital transformation in the property industry considering both the technological and mentality change of the real estate industry
PropTech is not only about digital transformation. It is a comprehensive reorganization of service culture pillars going on right now. Co-working is relegating the traditional office space, home exchanging is gaining momentum for seasonal rentals, and co-living becomes a new alternative to classic residential real estate. This process of change is neither simple nor quick. It could go on for years constantly replenished by new trends and features. So the major task is to keep ears open and dig deep for being aware of technological advances and choosing the best solutions.
The Benefits & Challenges of PropTech
As in the case with technological innovations in other areas, the main goal of Property Tech is streamlining work processes, reducing paperwork, maximizing efficiency, improving communications systems, and open access to the industry for a wider user range.
Industry practices plagued by inefficient processes and unnecessary transactional costs defended by self-interested professionals and institutions.
Professor of practice, Property funds Researcher
The purposes of PropTech also include personalizing management and minimizing transaction resources. The distributed ledger technologies are expected to play an important role in creating a secure infrastructure. Marketplace competition and price pressure are powerful catalysts for implementing tech innovations discussed below.
Real estate isn't the least digitized economic sector, but it is clear that many opportunities remain.
British Property Federation,
trade association for UK residential and commercial real estate companies
PropTech includes trends towards a more digital-optimized approach to the industry. Technological convergence is going on and here is a brief description of some of such technologies that are able to advance property leasing service.
1. Virtual Reality & Augmented Reality (VR & AR) and 3D Tours
Virtual reality as technology has already existed in the 1960s. Today we see high-speed development of integration VR & AR technologies, including increasingly leveraging by the real estate industry. According to Goldman Sachs, VR & AR in the real estate industry will become a $2.6 billion by 2025. A lot of companies have already integrated these technologies and many niches still have the ability to be converted through these tools. Generally, this high-end simulated experience intends real-world experience. We are using headsets and glasses for visual immersion, while wearables and handhelds are intended for tactile sensations.
The major reasons for high-speed implementation of VR and AR technologies by leading brands is 'Try Before You Buy' concept. For example, virtual pre-opportunity to find yourself in the dream house or the cozy hotel room is a cool highlight for your real estate startup. Also, VR and AR advances give us the ability to prototype and test cheaper and faster, for example, Realar, an AR startup, proposes to "see a property before it's built in life-size".
And now let's see, how IrisVR allows users to take floor plans and turn them into VR experiences.
RoOomy creates a cool app for virtual staging and interior design via AR tool that allows customers to build virtual homes using massive libraries of digital furniture.
Other companies create 3D tours that allow viewing 360-degree pics and tours of properties. It is not VR or AR technology but still a good ability for 'Try Before You Buy' concept. It's advances experience for a customer and makes his decision faster and more confidant, and also accelerates the sales process for a broker. The growing priority of such interactive VR & AR apps and virtual walkthroughs with smooth, moving 4K 360° videos is driven by the desire of engagement and immersive experience.
2. Artificial Intelligence (AI)
Have you ever asked Google Assistant or Siri to play your favourite song? If so, then you have already involved in the world of AI.
Artificial Intelligence simply creates more time for humans to do what they do best.
M. E. Monroe
Content Marketing Manager at AppFolio
Let's talk about your idea?
Nowadays technologies powered by AI can be found everywhere, including the property leasing sector. Here are some purposes for integrating AI systems for property leasing business:
Improving Customer Experience
AI tools are software solutions that can free up your time to provide a higher level of personal customer service. AI removes repetitive, manual tasks, for example, it is able to extract information from chats and input data directly into your management software. So it saves hours of tedious work and, as a result, provides more freedom for your team to focus on deeper personal connections with clients.
Optimizing Leasing & Conversion
A quick response is a crucial task for every service. Integrating advanced conversational AI technology for automating leasing communications will be the best solution to provide timely responses. AI can make booking easier and faster and reduce manual input for transactions.
3. Internet of Things (IoT) and Smart Home
Smart meters, smart light bulbs, thermostats, digital locks, security surveillance systems… A lot of new property developments are designed around IoT solutions. According to KPMG researching conducted among the opinions global leaders, 17% of respondents believe that IoT will drive in the great business transformation.
In the property sector, IoT is mostly present as a complex of digital platforms for managing, monitoring specific property assets in smart homes. One of the key advantages of IoT technology is knowing when things will break down, instead of being informed after the fact of breakdown. IoT-enable the entire development via installing sensors on critical components, such as AC, heat, plumbing, different appliances will be advance for rented properties.
Let's see some examples.
That is how Schweiger presents smart solutions for home automation in very creative way.
And here is Works with Nest video explaining how various devices connect and work with one another with all the attendant benefits to users and consumers.
4. Web optimization: advanced on-line solutions
Even if your company is already the stuff of legend on and everybody knows its name it doesn't mean that you should be to much conservative and old school on the marketplace scene. The Property Tech Industry is a very competitive space and companies spend a lot of resources for web optimization to raise their awareness and to advance relevant site features.
Adopted For High Conversion
Search Engine Friendly (SEO)
Interactive Map Search
Easy-to-save Multiple Search
Easily Save Favorite Properties
...and much more
Nowadays, property web solutions offer varied optimized options to manage all properties and contacts in a simple, fast and efficient way.
Here we are going to share our experience of developing "No White Walls" as the example of property tech in UK to describe its purposes and causes.
"No White Walls" is the online service that allows offering and searching for the long-term HMO (house of multiple occupation) rental. This project was created as an alternative to the high cost of housing in the United Kingdom (that's a prime example of price pressure as a powerful catalyst for innovations discussed earlier).
The main purpose was to simplify the process of renting and popularize co-living idea. The platform was initially built on WordPress. But after a while, it stopped addressing owners' requirements and it was not flexible enough for advanced functions. Today it is a professionally optimized high-standard HMO marketing and management platform with a wider feature set. Benefits we've introduced:
Fast and comfortable posting ads
Simplified organizational rental process for agents and users
Payment systems integration
Improving indexing and sharing in social network
Moreover, advanced user-facing website or application plays a vital role in brand fine-tuning. Integrated with the digital tools described above it could become a modern part of brand building as unique interactive digital platform that will differentiate a company and increase ROI.
What PropTech solutions are the best to apply?
Due to technologies described in the previous section real property service providers have an excellent chance to distinguish themselves. Highlighting your technical prowess is a crucial process in order to maintain market share.
As a real property professional with a client portfolio, you know their needs better than anyone. The key is to anticipate really sought-after technologies. Innovations won't succeed if they don't fulfill customers' needs.
New actors are flooding the market, offering tools and solutions for real estate professionals, or harboring the ambition to become the Uber of real estate.
Author on Medium
Professional modern approaches to real property system, based on technical advances, may transform a startup in one more giant on the marketplace. Using relevant analytics leads to smarter decisions about investments. Let's see how prosperous are cities in Europe on the estate market.
There are a thousand ways to implement PropTech innovations for startups. Most PropTech solutions we described solve business issues that will reduce costs, streamline business process and improve the customer experience.
Freshcode provides varied digital solutions to keep up with this growing technological demand in the real property space. Don't hesitate to contact us if you have any questions or need for consultation!