Proptech. It’s currently the latest buzzword in real estate, but you may or may not have taken into account the seriousness behind its meaning. “PropTech” means property technology, and you’ve probably already been using it.
PropTech will disrupt the property industry and change it for good.
What does this mean for everyday property investors and real estate professionals?
First a bit of history. Buying and investing in property in 2018 is much different than it was 15-20 years ago where paper trails dominated deal-flow and data was recorded with pens and not bits. These antiquated ways of the property market have paved the way for PropTech. It is now possible for a property investor to invest a home without ever leaving the couch, you record data on your phone or laptop and dealing with your broker or bank takes place through apps or websites.
Proptech – what’s all the fuss about?
PropTech or property technology is an umbrella term that collects together a whole range of initiatives and sub-topics. Literally speaking, PropTech combines technology into the property sector. At the moment, the definition is broad and stretches from large market data platforms like CoreLogic, homes.co.nz or Housecanary, financial platforms like Morty for mortgages or co-working spaces like WeWork right down to smart light bulbs and door locks.
Let’s look at an example of how PropTech has completely flipped part of the real estate industry in recent years. You’ve probably never heard of George Nelson and Robert Probst and why should you have? They and are credited with the invention of what we call ‘ the cubicle’. The cubicle dominated office work life for the good part of the last century. In less than 10 years WeWork upended the cubicle office and the way we work today. Using the “Space as a Service” business model to provide co-working offices designed to be versatile, open and dynamic fitting the working lifestyle of today’s office workers. Through technology, WeWork allows one to have an office whenever needed and for any amount of time. These new types of offices are now encouraging individuals to embrace openness as a key factor in the way an individual works.
It doesn’t stop there…
On every level of real estate, technology is changing the game. An example close to home is homes.co.nz. Homes.co.nz allows you to dive deeper into the local market, and explore data about individual properties, and they’ve their competition, Trademe has its feet wet in the real estate big data space.
The United States has seen its host of new real estate startups in the past few years. Companies such as Bowery speed up the commercial appraisal process, Flo has a cloud-enabled device for water conservation and monitoring, Morty is an online real-time mortgage marketplace and Avail is a full-service software solution for DIY landlords to manage their rentals. Perhaps one of the largest PropTech companies you’ve surely to have heard of by now is AirBnb, which has shaken up the hospitality and hotel industry in its entirety, allowing anyone to rent their space to tourists and visitors easily.
What about a Kiwi example?
Another Kiwi made Proptech company that is shaking things up is Kitt, a cloud-platform for real estate asset management. Kitt helps residential real estate investors manage their financial position easier, getting rid of the tedious, manual ways investors used to handle tasks like accounting, calculations, comparisons and benchmarking on their portfolio. Every other equity has a simple, tech-enabled way to do these tasks, why not property?
What all these new companies have in common is the goal of simplifying the property market for investors. It’s important to keep up to date with the industry changes and new data and not fall short when it comes to adopting new technologies and tools to make your life easier as an investor.
To sum it all up.
There is no doubt that PropTech can improve property businesses in terms of productivity and also profitability. It has become an unstoppable force that will revolutionize the industry forever. It begins with the realisation that change is real and inevitable and will happen with or without real estate professionals. As John F Kennedy puts it: “Change is the law of life. And those who look only to the past or present are certain to miss the future”.