We have a new word to add to our glossary! But this time, it’s not something strictly related to the process of buying and selling homes. However, it’s a word you might have heard, and that has a massive impact on a real estate investor’s daily work once adopted. We’re talking about proptech! Again, it might be a bit odd to pronounce, but we encourage you to discover what it means and why it has the power to change the way you do business.
Proptech – or property technology, real estate technology, PropTech, or even prop-tech – is applying information technology to real estate markets. It’s a mashup between two words (like EdTech, FinTech, HealthTech), and it highlights the connection between both knowledge areas. Though it started with the objective to improve transactions, nowadays, it can also include property management software, smart home technology, listing services, automation, 3D modeling, and so on.
Why is proptech important?
In the beginning, proptech made it possible to have digital listings, like the MLS, and move on from paper and print media. In fact, that’s how Real Estate IQ started eight years ago! First, we saw the need to improve real estate agents’ daily work and created a friendly search engine to browse through the MLS listings. But once that was done, we – and every company that works in this field – saw that technology opened an opportunity to revolutionize the real estate industry.
New additions and features appeared in time, based on computer automation, artificial intelligence, big data, and machine learning. For example, at Real Estate IQ, we expanded our software to create two algorithms that can run comps in just seconds – compared to the 20 to 30 minutes it takes a person to do it –. We also implemented machine learning to analyze deals in an automated way, created a search engine to browse through the tax records, and developed an ecosystem for leads, marketing, and project management.
But innovations also provided chatbots, virtual reality for customer acquisition, IoT and drones, and even sustainable technology for construction. So yes, this week’s concept includes a broad spectrum of possibilities because software and technology can be implemented almost everywhere. Actually, back in 2018, a report from KPMG listed the biggest pain points in the real estate industry where technology could produce efficiency gains. You can check the results on the chart below.
As you can see, used adequately, proptech has the potential to automate tasks, organize projects, refine rehabs, and basically make you an efficient and intelligent investor. Having the right technology on your side lets you focus on the parts of your business you’re most needed and valuable. Meanwhile, it takes care of repetitive tasks (such as running comps or doing rehab budgets), feeding new leads, and analyzing deals.
How proptech changed real estate
It’s hard to list all the advantages proptech enables. We already mentioned automation, organization, planning, and analysis, but there’s so much more! For once, technology changed the way real estate investors receive leads: they don’t have to drive around or wait for a deal to ring the bell anymore; with digital listings (both MLS and off market), they have a pipeline of deals coming daily. It also changed how they work and network with each other (thanks not only to social media, webinars, and message apps but also to CRMs and Kanban dashboards).
We could spend all day counting its perks, but to keep it short, we’d like to point out two fundamental impacts. One is on time management, and the other is on the decision-making process. Proptech is fantastic to optimize your day since it speeds things up and takes care of a portion of your tasks. Furthermore, it provides access to big data combined with a way to search, filter, and analyze it has an immense impact on how investors make informed decisions.
Before Covid-19, another KPMG survey stated that 58% of respondents have already embraced some digital innovations. This is a trend that the pandemic could only deepen. If it had already affected how real estate investors purchase, sell, rent, analyze and manage projects, 2020 made it clear that proptech is not something that can’t be dismissed so easily. People can only grow so much by themselves. Still, to reach the fullest potential of their businesses and make a profit, it’s essential to expand: meet people, find new places to work, accept challenges and get tech assistance.
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Disclaimer: The blog articles are intended for educational and informational purposes only. Nothing in the content is designed to be legal or financial advice.