Proptech is one of the latest and biggest buzzwords in the modern property industry. It is known for being a new innovation driver, and many consider it to be a remedy for estate agents and other professionals in the property industry who are struggling to keep up with disorganised records and big piles of paperwork. In short, property technology or PropTech refers to all the different technological tools that property professionals now use to optimise the way that people buy, sell, research, and market various types of properties. They may also be referred to as Real Estate Tech, Retech or Realtech.
As UpperKey has explained before, there are two different types of PropTech that are shaping the proptech sector. These are residential proptech or homeowner proptech, and commercial real estate technology, also known as CRETech. Proptech for homeowners refers to the digital products that have been developed to make it easier for people to own or rent residential properties. It is often used by property management companies, which may include estate agents, long-term rental companies, and short-term rental platforms.
This part of the proptech industry includes a variety of tools and utilities such as mortgage lender software, property management tools, real estate closing tools, and loan and financing management systems. On the other hand, the CRETech sector involves tools and programs that are designed for companies and commercial real estate professionals to search for, sell, rent out, or manage commercial properties such as warehouses, industrial buildings, restaurants, offices, and other commercial buildings.
Proptech and NFT
Did you know that NFTs are also making their mark in the proptech sector? Maybe you have heard that somebody has actually managed to successfully sell their home as an NFT.
There are currently two types of NFT real estate: virtual and physical. Ownership of physical real estate can be linked to an NFT through tokenization, while on the other hand, virtual real estate is typically a plot of land that can be purchased within a digital world known as the metaverse.
When people talk about NFT real estate, not everybody is going to be talking about the same thing. For example, an NFT apartment might be physical real estate that is being sold in the form of an NFT, while others could refer to the option to buy real estate with NFT as digital real estate within virtual worlds. Physical real estate could involve the option to buy an apartment with NFT or buy real estate with a smart contract, for example. This can be done either by tokenization as an entire asset or via fractional ownership.
To do this, the asset is ’wrapped’ into a legal entity, and ownership of the entity is represented by an NFT or a specific number of tokens. Essentially, real estate NFTs work in the same way as any other NFT. You can purchase them with cryptocurrency, and they are held in a digital wallet.
Benefits of Proptech for Investors
Investors in commercial or residential property can benefit from the more accurate construction planning that has been brought about by PropTech tools. These have helped to reduce, or in some cases completely avoid any major errors in the process or holdups as a result of deadlines in the construction process being missed. This reduces the risk of losing large amounts of money which benefits property developers.
In addition to this, property technology tools have provided property investors and developers with improved access to more thorough market research, which can be utilised for tracking investment, development, selling, buying and rental opportunities in specific areas. Property investors have also begun to use PropTech tools as an easier way to secure contracts without the need for any third party involvement.
How PropTech has Changed Renting
Proptech automation has made several changes to one of the biggest real estate sectors; the rental industry. There are now various tools available that are designed for landlords and tenants that have improved the way that the two interact.
Many proptech tools for the renting industry are designed to make communication between landlords and tenants easier, along with communicating with agents, contractors, and other property professionals to ensure that information is kept current and up to date, and miscommunications are avoided. Various proptech tools are available that have given landlords the opportunity to get better insights into their properties with automatic updates and no need to interact directly with the tenants.
For landlords of long-term and short-term rental properties, the tools available on the market today include networks of smart devices and sensors that are placed throughout the property to provide updates for landlords regarding any issues such as repairs and emergencies that the tenant may not be aware of to report. For example, some of these sensors can detect leaks long before they start coming through into the property, allowing landlords to determine what repairs need to be made before they get worse and start to become more expensive to deal with.
What are the Main Benefits of Proptech?
Proptech is a wave of disruptive solutions that use innovative technologies. There are several ways that they can benefit the real estate industry as a whole. Not only are they useful for investors and developers, but they also have several excellent benefits for buyers, sellers, landlords, tenants, and even short-term let and holiday rental owners. Both companies and users can benefit from and even profit from Proptech tools. So, what are some of the main advantages?
Higher Property Value
Buildings that utilise Proptech are more likely to be associated with high quality and seen as more valuable than buildings that do not have these tools. For example, a landlord who is looking to purchase a new investment property may be willing to pay more for a house that is fitted out with a network of sensors that will provide the landlord with automatic updates on the condition of the property and alert them to problems that need repairing as early as possible.
Many Proptech companies like UpperKey are focused on providing services that improve communication between landlords and tenants. If you have ever rented or owned a rental home, you will know that sometimes it is difficult for these two parties to communicate effectively. Many Proptech platforms for this purpose provide access to forms for claim reporting, relevant documents, and more information about the property that the tenant will need. They also provide landlords with a tool that they can use to quickly and easily respond to any requests.
Better Property Promotion
Today, there are various tools that property professionals can use to better promote a property for sale or rent. From enhanced galleries and floorplans to tours of a property in virtual reality, it is becoming more and more feasible for estate agents to promote existing properties or upcoming developments without having to meet the prospective buyers or tenants in person.
Better Occupancy Rates
Many Proptech tools are designed with the main goal of digitising the administrative processes in the property industry. Today there are different rental apps and platforms where landlords and tenants can easily find one another, reducing vacancies and connecting people to homes. Along with this, Proptech also includes digital access management solutions that makes it easier for property managers to better allocate individual rooms with more flexibility and less time needed.
The use of modern technologies such as blockchains or big data in Proptech have been able to achieve improved transparency. These days, anybody involved in the property industry can now get access to various tools that are designed to help people track property transactions easily. Each party involved will be able to view every transaction, which ultimately translates to more transparency.
Proptech is making waves in the propery industry at a rapid speed. But there is much more to it than the tools that more and more property professionals are beginning to make use of. Big data is becoming more and more commonplace in the property industry, supplying the knowledge and information that is needed to make more informed decisions, ultimately resulting in it becoming more practical to buy and sell more properties. Sensor networks, big data, market research, and data analytics are all enabling more innovation in the real estate market in each sector.
Proptech or property technology is taking the real estate world by storm and shows no signs of slowing down. From communications tools for landlords and tenants to property NFTs and better research for investors, this sector is changing the property industry as we know it. If you’d like to learn more, contact UpperKey today.