Technology continues to improve and even disrupt every business sector imaginable. The property sector is no exception, with various tools and solutions coming onto the market under the umbrella of ‘proptech’.
Proptech refers to the intersection between the property sector and technology. It’s a blanket term encompassing all relevant technological solutions, from websites to property management apps. The term also includes drones, artificial intelligence products, and more. These can help improve efficiency and cut costs for managing, buying, selling, and renting property and land.
This guide will be your quick introduction to proptech and how it works. You’ll discover the term's meaning and even learn a few real-life examples in the industry today.
Proptech 101: What It Is And How It Works
Proptech is a term that's been thrown around quite a lot lately. On the one hand, that's great for creating awareness of the subject and all the value it brings.
But on the other, it also creates a lot of noise around the term's true meaning.
Let's start by getting on the same page about the term's meaning.
Proptech, as you might've guessed from the word, is an intersection between property and technology. More specifically, the term encompasses the use of technology in the real estate industry to increase efficiency in all its areas.
As you'll soon discover through this article, several technologies are already being applied. The proptech industry has grown enough that professional associations, like the Malaysia Proptech Association, have been founded around it.
The Internet is the first and most apparent example of technology in the property industry.
However, many industry players also leverage cutting-edge tech like artificial intelligence (AI), virtual and augmented reality (VR/AR), drone technology, and more.
As for where they're applying those technologies, that's equally diverse. You can already find plenty of proptech solutions for property management by building owners.
Meanwhile, tenants and homeowners are also spoilt for choice regarding proptech solutions to secure and automate their homes.
Of course, proptech solutions are also increasing the efficiency in buying, selling, and renting land and property.
As exciting as this might sound, it's always wise to consider both sides of the coin. Proptech, like anything else, brings its fair share of pros and cons to the real estate industry.
Proptech Advantages And Drawbacks
The overall tech world has a strong ability to generate a lot of hype, and that's certainly true within the proptech field as well.
That hype is well-earned. Still, stakeholders would be wise to consider both the benefits and the drawbacks before making any decisions.
Here’s what you need to know before dipping your toes into proptech:
Pros Of Proptech Adoption:
Some of the top benefits of adopting proptech include:
Efficiency: Leveraging technology helps increase efficiency in managing, buying, selling, and renting land or property.
Savings: Increased efficiency also leads to other secondary benefits like higher cost savings.
Better decisions: Proptech adoption also supplies decision-makers with more data to inform their decision-making processes.
Improved customer service: Proptech also includes solutions to improve customer service and provide a much more positive experience overall.
Cons Of Proptech Adoption:
Meanwhile, here are some drawbacks often highlighted by proptech critics:
Upfront costs: Proptech software or hardware solutions often require an upfront investment. That can be a turnoff for some who might need help understanding the potential benefits of that investment.
Dependency: Critics also posit that using proptech solutions will eventually lead to an overdependence on such tools for success in the property sector.
Security concerns: With technology and connectivity comes additional security risks. Cybersecurity concerns add to the challenges a business could face when integrating proptech tools.
Learning curve: Like with many other things, there’s a learning curve involved with proptech adoption. Some tools might be intuitive enough to learn on the go, but more complex tools will require resources for training.
Proptech In Action: Real-Life Examples
The concept of leveraging technology in the property sector isn’t new. However, ‘proptech’ as a term began to gain significance somewhere in the mid-2010s.
Here are a few real-life examples of proptech in action:
Airbnb
One of the most widely recognised brands related to proptech is Airbnb. Founded in 2008, this now-global platform specialises in facilitating short-term rentals between hosts and people who need a place to stay.
Some proptech examples are more straightforward than others. A recent example is TanahSewa.com, a Malaysian website connecting landowners with renters.
Anyone can browse land options to rent for agriculture, events, construction, mining, and many other uses.
Buildium
The proptech sector has also seen the creation of many helpful software solutions like Buildium. This cloud-based all-in-one solution enables those in real estate to manage their property portfolios.
Users can manage crucial processes, including leasing, operations, accounting, and much more, all from their mobile devices.
WeWork
Most people would recognise the name WeWork as being a startup in the coworking space rental business. While that’s true, it’s also a perfect example of proptech in action, particularly behind the scenes.
WeWork is also a pioneer in integrating various proptech solutions to improve the customer experience for renters. For example, they implemented app-based access for them, using online booking systems and community-building efforts.
On top of that, WeWork also leveraged data analytics solutions to optimise its space based on the needs of its renters.
Nest x Yale Lock
So far, you’ve seen examples of proptech used at the platform and company levels. However, similar solutions also exist at the retail level.
A perfect example of that is the collaboration between Google Nest and Yale. With Google Nest’s expertise in home automation products and Yale’s expertise in locks, the two have created the Nest x Yale Lock, a keyless smart deadbolt system.
This is an example of a proptech solution that gives homeowners increased security, tracking, and remote control abilities they wouldn’t have had before.
Future Trends In Proptech
The tech industry evolves at breakneck speeds, and proptech is no exception. Some of the future trends that we can all expect from proptech, in particular, include:
User-friendliness: In the interest of driving adoption, it’s safe to assume that proptech software and tools will gradually get more straightforward to use as time goes on.
Artificial intelligence (AI): AI has made leaps and bounds recently and is being applied to more sectors than ever. Proptech will undoubtedly see an increased use of AI, especially in customer service roles with tools like chatbots and more.
Virtual/Augmented Reality (VR/AR): The hype around VR and AR isn’t as strong as it used to be, but its adoption continues to grow. It’s instrumental in the property sector, like with remote viewing and virtual property tours) and that usefulness will likely continue to grow.
Of course, these are just some future trends that stand out. With more time and innovation, there will surely be some surprises.
Final Thoughts
Proptech and all the solutions under its umbrella offer plenty of value to the property sector. Still, it’s crucial not to get lost in the hype and only focus on the potential upside.
Instead, consider both the benefits and drawbacks before adopting a proptech solution. In the meantime, stay tuned to the blog at Tanahsewa.com to keep up-to-date with what’s happening in the land rental and overall property sector.
Ray Hasbollah
Content Strategist
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