What is PropTech and what can it do for you?
If you work in real estate, property, or facilities management, you might have already used some kind of PropTech during your career. Whether it’s an app for contacting customers, a tool for reporting on issues in a building, or the use of BIM to operate an asset, PropTech is an increasingly more common feature of the industry today. In fact, around 58% of real estate and property companies use at least one or two PropTech tools.
Learning about the different kinds of PropTech available can also help you choose the right solutions for your organisation.
What is PropTech?
PropTech refers to a variety of digital technologies used by the real estate and property management industry. Its purpose is to support all aspects of the management of completed property from a commercial point of view – be that sales, operations, maintenance or contract management. PropTech can take the form of desktop software or mobile apps, and it may also incorporate certain types of hardware (such as sensors, cameras or VR headsets).
The name is a portmanteau of ‘property’ and ‘technology’ and it has been in use since the 1990s. However, the number of PropTech companies and the size of their customers base has grown significantly in the past decade. Today, there are over 8,000 PropTech firms listed on Unissu, a real estate trends website.
Investment in PropTech firms has also increased dramatically over the past twenty years. In the year 2000, just a few million dollars was invested in such firms worldwide. In 2020, that had risen to some $10 billion!
PropTech is also related to, but distinct from, ConTech (construction technology) which is more focused on the actual build stage of an asset (read more about technology in the construction industry in our blog). PropTech, meanwhile, primarily focuses on sales, search and management of completed buildings.
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Common types of PropTech
Evidently, there is a wide variety of PropTech solutions which aim to solve different sorts of problems. You can roughly categorise these into three groups:
These firms provide property search solutions. They connect potential tenants with estate agents and owners and also make the process of finding appropriate tenants and signing contracts easier. Services include:
This kind of tool can list the sales and purchases conducted by buyers or property businesses. You pay a fee for this information.
Data and analytics:
Real estate managers use these tools to gather more information about their customers, neighbourhoods, typical rental yields, and many other factors.
There are various marketplace solutions that connect supply and demand – be that plumbers for homeowners, sub-contractors to contractors, or tenants to landlords.
These PropTech solutions provide hardware and software that let people ‘view’ properties remotely. They’ve been especially popular during the pandemic when social distancing prevented in-person viewings. For example, the number of virtual tours during the UK’s first coronavirus lockdown surged by 317%!
These PropTech businesses focus on the management of properties for both real estate agents and facilities managers. They help with things like:
These tools facilitate conversations between landlords and tenants, buyers and sellers, or customers and estate agents. Rather than relying on emails or phone calls, these apps mean that users can store all conversations, queries or issues in one place.
Smart building solutions:
This kind of technology uses the Internet of Things to monitor space, energy, occupancy or security. Facilities managers can use these tools to make their estates or portfolios more efficient. Alternatively, homeowners can also use them to manage their homes more effectively.
Portfolio management apps:
These tools predominantly support estate agents or asset managers. They let you view all the properties on your books in one place, add notes or information, check pricing or other useful information that support the sales and tenancy management process.
Task management tools:
These apps help facilities and property managers dish out jobs to sub-contractors. Whether it’s telling an electrician exactly where on the building plan they can find a fault or giving tasks to your estate agency’s handyman, these tools provide useful digital checklists.
BIM’s primary use is in the design of buildings, but it can also be very helpful when it comes to operating them too. BIM models can also be accessed by facilities managers to view the final ‘as built’ model. As a result, they can see exactly where all pipes, wiring, HVAC systems, windows or anything else is. That can be particularly helpful for maintenance, upgrades or fixing damage.
Tools in this field help owners find the right insurance plan for their assets.
These tools provide checklists that help building owners and facilities managers safely manage sites and ensure government guidelines around social distancing are being enforced.
Finally, this kind of PropTech solution focuses on supporting the sales and marketing of properties. It helps with things like:
Managing listings on property websites:
Estate agents and landlords may be managing a large portfolio of properties that they must advertise on multiple websites. Obviously, taking all these ads down manually, or updating information can be very time-consuming. Syndication tools help you to manage all your properties in one go.
These solutions help you to simplify the process of making contracts, bidding and making deals. They also help with the collection of digital signatures from all parties. They ensure you have all legal paperwork processed correctly and store information in a single, secure place.
Certain PropTech tools help with financial assessments of customers. They can perform things like credit checks, automated loan approvals or identify the best mortgage for each customer.
Which PropTech solutions could you benefit from?
The growth in PropTech mirrors the more general expansion of the use of technology in the construction industry. This is a real positive, helping firms across the sector to be more efficient and productive, while also saving money. The next step is to narrow down the features your company would benefit from and create a shortlist of PropTech solutions that are right for you.