Just like many other sectors of the economy, technology is taking root in real estate. Using technology has become such a buzzword; it has earned the moniker proptech (property technology).
Although it’s in its infancy, experts envisage that proptech has a bright future. Future Market Insights predicts it will expand from its current value of $18.2 billion in 2022 to $86.5 billion by 2032. Here is why you should consider integrating proptech into your business.
What is Property Tech?
Proptech refers to using technology in real estate. It aims to help customers and businesses optimize how they conduct real estate transactions such as buying, selling, researching, marketing, and managing real estate assets.
Benefits of Proptech to Entrepreneurs
Like other sectors, the real estate market would inevitably undergo a technological revolution. Here is a look at some benefits of prop-tech to entrepreneurs:
1. Increased productivity
Investors handled real estate transactions offline in the pre-digital era, which was inefficient and slow. However, because of advancements in property technology, all of this is accessible online, keeping all parties in the loop with greater ease.
Additionally, using data analytics technologies in proptech can help real estate professionals make better property-related decisions and streamlined portfolio management.
2. Improved communication
In the past, it was challenging for buyers and sellers to communicate during real estate transactions because they handled many deals offline.
Proptech can make all transaction data accessible online, streamlining communication between all parties. Property owners may also improve their communication with clients and give them timely, relevant information with the help of property technology solutions like chatbots.
Traditionally, most real estate deals were closed in person, which made it difficult for buyers and sellers to find up-to-date information on transfers.
There are several ways in which proptech can increase transparency. For instance, it can provide information that enables consumers and corporations to make informed decisions regarding properties. It can also facilitate transparent and effective communication between buyers and sellers.
4. Improved marketing
Previously, you could only find property listings in print or via word of mouth, limiting its ability to reach a broader range of potential homebuyers and tenants. However, online real estate listings are accessible to a much wider audience because of technological advancement.
Moreover, you can use virtual reality, virtual staging, and other proptech tools to provide prospective buyers with a more in-depth look at a property without requiring a site visit.
5. Improved turnover and occupancy rates
Before proptech, property owners had to rely on a small pool of potential customers to sell or rent their units. However, with advancements in property technology, investors can now leverage online resources, such as online listings and social media, to attract potential clients.
Landlords and property sellers can save time and effort by using proptech tools, such as smartphone apps, that make it easier for them to manage their properties and keep tabs on tenants, potential customers, and sale agreements.
How Proptech is Changing Real Estate
Here’s a look at some of the growing trends in Proptech:
1. 3D printing
3D is no longer constrained to printing small things in a studio; some 3D printers can create an entire house. Presently, 3D printing’s primary application in the property industry is in construction, explicitly printing building components like walls, work surfaces, floor tiles, and other functions.
However, it has become necessary in modular building, enabling more economically priced, environmentally friendly, and versatile building materials and prefabricated structures.
2. Online listing
According to NAR, 43% of homebuyers search online for available properties. A real estate business is at a significant disadvantage if it doesn’t list its available properties online. Use pictures and videos to create an immersive experience for web visitors.
3. Internet of Things
According to a poll by Statista, 42% of respondents admitted they are optimistic about Smart Building technology, while 56% said they have already felt the effects of technological advancements.
The Internet of Things (IoT) describes a network of connected devices and systems that exchange data and instructions in real-time. You can even use the IoT to create smart homes with various connected devices you can manage remotely.
Besides automating property controls and taking care of routine maintenance, modern IoT systems may also identify faults and defects and optimize environmental performance by modifying operating systems depending on the actual or expected use. That leads to less energy usage, cheaper maintenance, and better air quality inside your property.
You’ve probably heard of blockchain when a conversation about Bitcoin and cryptocurrencies broke off. It refers to a distributed digital ledger technology that you can use to streamline real estate transactions, including renting and selling.
For instance, you can utilize the blockchain to make a distributed ledger of all your real estate deals, allowing streamlined monitoring of transferring property ownership. You can also use blockchain to create smart contracts. The blockchain can store and automate contracts when parties meet specific conditions.
Budding real estate investors that do not have deep pockets can take advantage of crowdsourcing. These are platforms where many investors can raise money to purchase a property.
Thereafter, professional property managers will take over the management and maintenance of the property, so the investors don’t have to worry about taking care of those responsibilities.
5. Big data and analytics
Big data describes extensive or complicated data sets that are too massive for conventional data software to process. A McKinsey research found that machine-learning models used in real estate applications are 90% accurate at predicting rent rate changes and 60% at predicting changes in other property variables.
That knowledge about market or customer behavior provided by big data can aid in pricing, identifying market trends, and weighing the risks and rewards of an investment. Analytics allow investors to build homes with the features the target occupants want, ensuring steady occupancy levels.
Proptech is still a relatively new byword in real estate, but its benefits are evident in helping develop, sell, and manage properties. It helps to integrate it now to reap its benefits and ready your business for the future when it is more prevalent.
By Gurpreet Singh Padda, MD, MBA, MHP