How Today’s PropTech is Modernizing Real Estate Markets

The modernization of real estate practices has been long overdue. Real estate has traditionally lagged behind in its use of technology, even as one of the largest asset classes in the world. Over the last two years, the COVID-19 pandemic has shifted and accelerated our societal uptake of technology, and the real estate sector has been no exception.

The adoption of new property technology (PropTech) solutions has allowed the industry to continue to boom throughout the pandemic with little disruption, while establishing  new systems that will far outlast the threat of the virus. ‘Seamless and convenient online experiences are becoming the staple of a modern digital real estate world,’ says Zain Jaffer, CEO of Zain Ventures and host of PropTech VC, a leading podcast that interviews mavericks and innovators in the property technology space. ‘PropTech companies provide businesses with needed solutions that drastically speed up all aspects of the real estate process while also reducing costs.’

The digitization of office practices allows professionals in the industry to be more time-efficient and accurate. Customer satisfaction is significantly increased by seamless and convenient technology, and those businesses that do not adopt these new digital solutions will quickly fall behind their competitors. With the benefits of using new technologies vastly already giving early adopters a visible market advantage, we can see how the real estate sector has been long overdue for change.

PropTech and Shared Economy Real Estate

‘Today’s consumers have become accustomed to effortless online experiences and expect this service to be readily accessible by all businesses,’ says Jaffer. ‘That’s where PropTech comes in.’ PropTech companies offering short-term rental solutions such as Airbnb have dramatically altered the travel economy by offering convenient lodging solutions across the globe without the need to acquire physical real estate. Airbnb competes aggressively with the lodging industry offering more affordable solutions. This shared economy real estate has created opportunities for PropTech rental services to take over the short-term rental game.

Similarly, office space sharing companies such as WeWork offer businesses co-working spaces, including physical and virtual shared rooms, as alternatives for companies needing to cater to hybrid and remote work environments. The rental market is experiencing high demand as the recent property boom, and low mortgage rates have displaced buyer interest in the rental market, causing more demand for rental units. In 2020 the global real estate market was valued at $1787.8 billion with a CAGR of 1.6% during the 2020-2024 period.

This rapid market expansion has provided a lucrative opportunity for PropTech software to be built as demand for more convenient platforms and innovative digital rental management solutions arise. Companies such as SmartRent offer customer device packages designed by gathering information during on-premise inspections of community properties. Through their services, landlords can facilitate lease management, move-in/move-outs and work orders through a one-app system. Another example is PropTech company, Sugar which uses a one platform solution to connect members of residential communities, where they can virtually organize rent payments, unlock doors, share keys, interact with neighbors and more. Similarly, ServiceTitan uses a cloud-based software platform that helps home services companies streamline operations and assist with commercial and residential HVAC, plumbing, electrical, and other field service businesses.

Data Tools Pave the Way for Proper Strategy

 Informed and strategic decision-making is critical in all business ventures, and data collection is the best advantage an investor can have in the still-shifting real estate sector. Proptech provides a range of data tools for improved decision making across all market niches. Buyers and sellers of residential and commercial real estate can make more accurate strategic decisions through data collection technologies that give them the information edge. In particular, the property management sector is seeing huge benefits in PropTech creating more efficient business models as better analytics allow for more concrete projections of risk and reward.

At the same time, property evaluations have become more precise, with PropTech start-ups being able to forecast the rise or fall of property prices at an accuracy of over 90%. AI-powered commerce real estate database Reonomy comprises 49 million listings and is continuously expanding. This data allows for better marketing and improved sales insights for real estate agents and consumers alike. ‘It is no longer enough to provide letter drops and other forms of in-person prospecting to create leads for sales in the modern world,’ says Jaffer. ‘Real estate agents can use data to improve the quality of marketing for sales and target audiences, allowing them to produce better offers for clients.’

Property development also benefits from applying big data to residential development with granular data analysis, helping develop and understand the best positioning and desired amenities for potential residents and cutting down potential risks. Data collection still has a vast amount of untapped potential that will continue to develop with the future of the industry and the advancement of data analysis PropTech companies. These fast and continued changes will equate to better data mining, more concrete insights, and faster, smoother, safer transactions in the future PropTech. Convenient processes are being continuously created to benefit every aspect of the real estate sector with cost-effective and time-efficient alternatives paving the way for the industry’s bright future.