Proptech is a relatively new term for most people, including those who’ve been in the real estate industry for a while. However, the concept behind it is not exactly new, given that the use of technology in real estate can be traced back to several decades ago.
Proptech, which is a portmanteau for property + technology, has been around since the 1980s when the first computer was created and made available to the public. At the time, early adopters of computing used tools like Excel and Lotus to manage their property portfolios and other investments. Since then, a lot has changed, and now we have hundreds of companies like Blueground and Airbnb that rely heavily on modern tech to serve customers looking for houses to rent or lease, or a few nights in a vacation rental.
While proptech is still relatively young compared to it's not-so-distant cousins like fintech and HRtech, it is gradually but consistently making significant inroads into the real estate industry. Today, investors, property owners, and real estate professionals are all actively looking for ways to cut costs and add efficiency to their work using technology.
In this section, we describe three practical examples of how proptech is being applied today.
Over the past decade or so, there have been several significant shifts in the real estate sector, with the emergence of models like Airbnb and WeWork showing just how much the industry has transformed. In particular, these two technology-based platforms have changed how users find and rent living and working spaces, respectively. To begin with, Airbnb provides a platform for hosts looking to accommodate guests, usually for a few days. On the other hand, WeWork leases real estate spaces, transforms them into offices, and rents them out as offices or workspaces.
Many other brands are also coming up with unique solutions to cater to the changing tastes of customers, most of whom are now moving away from asset ownership to the on-demand economy. A good example is Blueground which is a real estate tech company that leases, furnishes, and equips apartments before renting them out to business travelers and individual renters for at least a month.
While the trend is yet to gain as much traction as it has in the automobile and heavy equipment industries, it’s evident that there’s quite a bright future to look forward to in this industry as well. Housing and other living spaces will continue to be converted from products into services, while more tech companies will join the real estate industry aiming to improve how users buy, sell, rent, and manage properties.
One of the most disruptive innovations in the real estate industry right now is the smart building technology. Property owners are now applying highly advanced services like Building Management Systems (BMS) to monitor and automate processes like heating, lighting, security, and ventilation, to name just a few. These systems also help with data collection, especially in workplaces where the productivity and general wellbeing of employees are vital to the success of a company.
In the property lifecycle, construction is probably the most time-consuming and costliest of all phases, and the reason it’s so tricky to implement proptech here. However, this has not deterred innovators from creating services geared at helping property owners and contractors automate tasks such as modeling, project management, and cost estimation, among others.
Proptech is here to stay, and as long as you have some interests in the property sector, it’s highly likely that you will need it at one point or another. For example, if you’re searching for a house to rent or buy today, the best places to turn to are the online property listings or marketplaces in your area. The same applies to owners and investors looking to promote their properties online in search of buyers or people to rent or lease out to.
On the other hand, if you’re involved in the construction of properties, you can count on some form of proptech to speed up your work and help you achieve higher results. For example, if you are a construction engineer or architecture looking for a more efficient way to plan, design, and construct a building, you may consider using a platform like Kreo to generate Building Information Modeling (BIM) designs in minutes.
Finally, if you are a service provider in the property management industry, proptech can make your work easier by helping you collect valuable data that you can use to improve services. For example, you can now implement an IoT Building Intelligence system like Gooee to improve control, communication, and data collection and analytics in a building. If done right, this will come with significant operational and economic benefits like energy savings and optimal use of space, among others.
While it can be difficult to predict how long it will take for property technology to mature and become mainstream, one thing is certain: that the future of real estate lies in tech. To survive in this industry, whether as an investor, property owner, or professional, you must keep up with the emerging proptech trends and implement the latest possible tech. Brace yourself for even more exciting times and innovations ahead!