The Future of PropTech
All aspects of our lives are undergoing a digital transformation. From software and automation to VR and machine learning — the future is now. That includes the real estate and property management industries through its own wave of disruption through what has been termed as PropTech.
Commercial PropTech vs Residential PropTech
There are two main segments of PropTech — commercial PropTech and residential PropTech.
- Residential PropTech re-imagines the processes between individuals and real estate or property management companies, similar to B2C companies but instead of business-to-consumer, it’s business-to-resident. Examples include looking for a new home or apartment, financing new residential purchases, paying rent online, residential amenities, and more.
- Commercial PropTech disrupts the business models between businesses, like that of B2B companies. Examples include lease and sales compensation, property marketing, building operations, building ownership information, property investments, construction projects, and more.
While the majority of PropTech startups fall into one of these categories, it doesn’t have to be mutually exclusive. Some PropTech companies are a hybrid of residential and commercial. An example of this is mailroom management software startups that are helping commercial buildings create a more automated and streamlined mailroom system while also providing residents with a better process to pick up new packages on their own time.
5 PropTech Trends to Watch for in 2020
- COVID-19’s Continued Impact
- Big Data Applications & Its Ethics
- Virtual & Augmented Reality (VR/AR) in Real Estate
- Predictive Maintenance & Smart Improvements
- Multifamily Innovation
1. COVID-19’s Continued Impact
There is uncertainty across all industries because of COVID-19’s destabilization and disruption. However if anything, this will only further PropTech’s reach and speed up its adoption.
Expect to see new, innovative startups rise up from the ashes of COVID-19 to help residential and commercial property management and real estate companies re-imagine their core processes with safety and health at the forefront of these innovations.
2. Big Data & Its Ethics
Big data takes the emotion out of decision making, making outcomes more predictable and data-driven. This is already impacting housing markets and value through real-estate online marketplaces such as Zillow. Look for big data to weave its way into aspects of property management.
While big data itself is not inherently good or evil, it does provide the toolset for companies and individuals to use it unethically.
An example of this is using big data in the tenant screening process. Soon property managers and landlords will be able to use predictive analytics and big data to pre-screen potential tenant applications and predict if that tenant is likely to miss a future rent payment or damage the property. This will present an ethical problem for the industry, as it creates a sense of self-fulfilling prophecy for these prospects — judging them based upon actions they have yet to take.
3. Virtual & Augmented Reality (VR/AR) in Real Estate
VR and AR have been slowly inching its way into PropTech for the past few years, and COVID-19 has increased adoption rates of virtual tools.
With AR/VR, leasing agents and sellers can record 360 virtual tours of properties and upload them online for prospects to view as an alternative to visiting the physical property.
Additionally, AR/VR has real estate applications for virtual renderings and prototypes of new construction projects to help secure financing and sell properties before they are completed, as well as the tools to offer virtual communities for resident and community engagement.
4. Predictive Maintenance & Smart Improvements
Smart devices collect data via smart sensors from applications in a home or building and send that data to the cloud which sends data back to those applications from the Internet of Things (IoT.)
Look for smart devices to help property managers identify problems in their buildings through predictive analytics to spot maintenance problems before they happen — as well as help homebuyers uncover potential problems or faults in properties to help them make more informed and better buy decisions.
IoT and smart devices will also help both commercial businesses and at-home consumers save money through more energy-efficient processes.
5. Multifamily Innovation
The first PropTech innovations came to the commercial side of real estate. The second wave came in landlord-tenant relationship management, with solutions such as online rent collection, virtual lease signing, landlord-resident communication with systems such as property management software.
The next wave of innovation is in multi-unit buildings, and updating the processes these residential buildings use to manage communities. Nothing in a multifamily residential building will be left untouched.
Examples of multifamily trends and innovations already underway:
- Automated visitor management
- Mailroom management apps
- Mobile key-card access systems
- Free, building wide managed WiFi
- Pet-tracking & management systems
- Resident engagement & communication portals
- Self-service package lockers
- Dining service amenities
In general, digital transformation will continue to impact every society. As it innovates and brings certain segments of the population and different business processes into the future, it will move on to new industries and problems that have yet to be disrupted. Its impact through PropTech will be no different.
I’ll continue observing how the real estate landscape is changing and keep you informed. Want to share your opinion, drop me a message of Facebook or Linked in!
Dmitry Tsyplakov, CEO/Product manager of Fincase