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What is PropTech and how it is revolutionizing the Real Estate Industry

Last Updated on July 22, 2021 by Admin

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.

If you study or work in real estate, property management, or facilities management, you might have already encountered some PropTech during your career.

In fact, around 58% of real estate and property companies use at least one or two PropTech tools. Kindly read this article to learn about propTech and how it is revolutionizing the real estate industry.

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 completed property management from a commercial point of view – be that sales, operations, maintenance, or contract management.

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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,’ which has been in use since the 1990s. However, the number of PropTech companies and their customer base have 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 were invested in such firms worldwide. In 2020, that had risen to some $10 billion!

As of 2021, there are 824 Real Estate Tech startups in India. Check this list of the 10 most exciting PropTech startups in India.

PropTech is also related to, but distinct from, ConTech (construction technology), which is more focused on the actual build stage of an asset. PropTech, meanwhile, primarily focuses on sales, search, and management of completed buildings.

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What is the PropTech industry like today?

Before going further with 2021 predictions, let’s check how the PropTech market is now globally and locally in the USA.

Speaking geographically, PropTech companies in the USA have the lion’s share, with European PropTech hubs following the leader.

Analyzing the global tech real estate market, Deloitte highlights the growing potential for technology disruption in such countries as Israel, with more than 100 proptech startups operating as of 2020.

That’s great news for real estate businesses, meaning that PropTech is going places and really worth investing in 2021 and further on.


Top Proptech Trends for 2021 and Beyond

As reported by explodingtopics, the following are the top 7 Proptech trends For 2021-2025.

#1. Increased Demand For Virtual Home Tours

Growing demand for virtual home tours is one of the most important trends happening in the proptech space.

#2. eSigning Becomes The Norm

Fueled by the pandemic, eSigning real estate agreements became a mainstream solution.

#3. The Real Estate Industry Taps Into Proprietary Advertising Solutions

New digital advertising platforms are emerging to disrupt the real estate space.

#4. Rental Property Management & Automation Takes Off

Automation is becoming a disruptor in real estate management. Thanks to expanding platforms, multi-family property management can adapt to property owners’ needs in real-time. The platforms provide the tools and support needed to fill the technology gaps and reinforce efficiency and profits.

#5. More Interest In Fractional Real Estate Investments

Due to the significant amount of capital required to get started buying properties, proptech companies have started to focus on fractional and crowdfunding property investment opportunities.

#6. Smart Homes Becomes The Norm

Transforming real estate properties into smart homes is a new way to increase property values and attract new home buyers.

#7. Growing Numbers Of “IBuyers”

iBuyers rely heavily on data and will often buy homes unseen. The growing popularity of iBuyers has quickly caught the attention of homeowners.



Types of PropTech

Evidently, there is a wide variety of PropTech solutions which aim to solve different sorts of problems. You can roughly categorize these into three groups:

Proptech in Search

These firms provide property search solutions. They connect potential tenants with estate agents and owners and make finding appropriate tenants and signing contracts easier. Services include:

Data brokerage:

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, neighborhoods, typical rental yields, and many other factors.

Marketplace solutions:

Various marketplace solutions connect supply and demand – plumbers for homeowners, sub-contractors to contractors, or tenants to landlords.

Virtual viewing:

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%!

Proptech in Management

These PropTech businesses focus on the management of properties for both real estate agents and facilities managers. They help with things like:

Communications:

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 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 supports 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:

BIM’s primary use is in the design of buildings, but it can also be beneficial when operating them. 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 the damage.

Building warranty:

Tools in this field help owners find the right insurance plan for their assets.



Proptech in Sales

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 maybe 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.

Contract management:

These solutions help you to simplify the process of making contracts, bidding, and making deals. They ensure you have all legal paperwork processed correctly and store information in a single, secure place. They also help with the collection of digital signatures from all parties.

Financing solutions:

Certain PropTech tools help with financial assessments of customers. They can perform credit checks, automated loan approvals, or identify the best mortgage for each customer.

Final words

Property technology quickly disrupts the traditional real estate journey, including searching, buying, selling, renting, and more. In 2021 and beyond, real estate specialists and key industry stakeholders are staking big on propTech as a major enabler and future growth driver for the realty sector. At the local, national, or international levels, proptech can create a positive and sustainable impact.



PropTech FAQ

What is the meaning of 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 completed property management from a commercial point of view – be that sales, operations, maintenance, or contract management.

What is a PropTech startup?

PropTech Startup is, where Smart Tech and Real Estate come together. It has curated a digital platform which provides its users access to best grade Residential and Commercial Real Estate, along with portfolio management and property search, thereby reducing time of investors.

How big is the PropTech industry?

Investment in PropTech firms has also increased dramatically over the past twenty years. In the year 2000, just a few million dollars were invested in such firms worldwide. In 2020, that had risen to some $10 billion!

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