Innovative technologies are overtaking different industries, and property is no different. This trend will only continue to grow with time, meaning property investors and landlords need to pay attention.
In recent years, you might have noticed a new term that’s started making the rounds. Proptech. Even though it’s picked up a fair bit of steam, there is still quite a lot of mystery surrounding the term. Since proptech can be very significant to those in the real estate industry, it’s important to be clear on what it actually is.
Obviously, the term itself is an acronym. It’s short for “property technology”. As such, you can use the term to refer to any technology related to the property and real estate sector that makes it more efficient.
You’ll immediately notice that this is a rather broad explanation. But, it needs to be that way because proptech can cover many different things such as:
- Software (Zoopla, a UK property portal, is an example)
- Hardware (for instance, a sensor located in a building)
- Materials (there are efforts to develop bricks which can power solar panels, introducing technology into the mix)
- Manufacturing (an example would be 3D printing)
There is another example which might help you wrap your head around the concept. Airbnb is also proptech. The platform is now a global phenomenon, showing how impactful proptech can be.
The point is, proptech is here to stay. Not only that, but it has the potential to disrupt the industry. Airbnb already did it with short-term renting, and other examples of proptech may do the same for their respective fields. That’s why people in the industry need to pay heed to it.
As a side note, people will sometimes use this term to signify start-up companies in this field. However, in this text, proptech will refer to the technologies.
What Can Proptech Bring to a Landlord?
On the global scale, proptech is no longer a niche subject. The massive and constantly growing investments prove this. While the US and the UK lead the way, Australia is holding its own. In other words, the Australian proptech sector is gaining momentum at a steady pace.
There are currently more than 200 proptech companies doing business in Australia. There are also accelerator programs which guarantee this number will only continue to grow. This means there will be no shortage of innovative solutions which will impact the different areas of the property market.
All of this means that people in this line of work cannot afford to ignore this trend. For landlords (and investors), proptech may turn out to be one of the defining aspects of their business. This is because it can bring many benefits. Those benefits can include the following.
1. Better Occupancy
As you will see, many applications of proptech are still in the early stages. This means the full benefits are a number of years away. However, there is one aspect of proptech which is already in full swing. This is the effect it can have on occupancy.
For proof, go back to the previously mentioned example – Airbnb. It launched in 2008 and had a rough start. This was unsurprising as it represented a big change. But it caught on after people realised just how many new opportunities the platform opened up. And as countless landlords around the world would come to learn, things would never be the same again.
Landlords who embraced the platform benefited a great deal from it. They were able to attract tenants of a completely new kind. Those who did not, on the other hand, were sitting on vacant units. Simply, Airbnb changed the landscape of short-term renting. And, it did that by providing a new way to boost occupancy.
Of course, Airbnb is only the most famous example and not the only one. Yabonza aims to do something similar with long-term rentals. And there are many other proptech solutions to help landlords and tenants find each other more easily.
The point is, platforms of this nature are already a huge factor. This isn’t an issue to consider at some point in the future. This application of proptech is something that can benefit a landlord right now. In fact, it can be the difference between a unit that’s generating rent and a vacant one.
2. Better Communication
Look at some property investment tips and it won’t take long to find an entry warning you to be careful about investing in a different city or state. This is a complex subject, but there is no doubt that managing such properties comes with unique challenges. But, many of those challenges stem from improper communication. This is another area where proptech can help.
There are many solutions out there which aim to make the communication between tenants and landlords more effective. Real estate platforms can make it much easier for the two parties to get in touch or exchange relevant information. This benefits the landlord in two ways.
For one, good communication makes the tenant happier. And, a happy tenant makes for a happy landlord. Secondly, better communication makes it easier for the landlord to manage a greater number of properties. This can help them expand their business.
Landlords and property managers don’t just collect rent and deal with burst pipes. The job also involves administrative duties. In turn, this can involve extensive paperwork. But, certain proptech solutions can automate these tasks, freeing up valuable time.
The right software can also remind the landlord about matters such as rent due dates or viewings. It can also help with legal matters like notices. Automation can help the landlord stay on top of things and avoid issues with compliance.
There is more to this. Smart homes are another application of proptech. They combine the software and hardware aspects of it. As such, smart homes can automate many aspects of property management. This can give the landlord greater control. Of course, this technology is still in the early stages, but the potential is there.
One of the most important tasks of a landlord is to market the property. Without a tenant, all other efforts are in vain. This is another area where technology can be a huge help.
As already mentioned, online platforms can do wonders in this regard. Thanks to them, marketing has become much more effective. Landlords can reach a significantly larger pool of potential tenants, and they can show off the property in its best light. This can also lower marketing costs, which is another plus.
5. More Data
Data is crucial in today’s world, and new technologies can make it easier to access. There are many tools out there that will allow landlords and investors to get the information they need to make better decisions.
Technology also boosts the transparency of the property market. Today, it is possible to track property transactions with a few clicks. This reduces risks and benefits for all parties.
6. Greater Value
Combining the different aspects of proptech leads to one thing – increased real estate value. Smart homes can be an interesting example of this. People will associate homes that make use of the latest technology with quality. This makes them more appealing.
Naturally, this will result in better rental returns. The landlord can charge more and will have an edge when it comes to marketing.
7. Revenue Maximisation
In a way, revenue maximisation is the sum of all the previous benefits. In the end, everything comes down to how much a property can earn. This is where proptech can play a huge role in several ways.
For example, there is tenant retention. This article has focused on the landlords, but the tenants benefit from proptech just as much. Perhaps even more. Proptech gives them a smoother and more enjoyable renting experience, meaning they’ll be less likely to leave.
There are also numerous savings landlords can achieve thanks to proptech. First and foremost, they can save time thanks to automation. This allows them to scale up and take on more tenants. The right technology might even make the hiring of property managers unnecessary. The same benefit applies to investors who’ll be able to handle more properties thanks to software.
Decreased vacancy means landlords will lose less money on that front. Proptech can also help reduce energy bills (smart homes), marketing costs, and more. All of this plays into the bottom line. In the end, proptech makes real estate more lucrative.
Proptech is the way of the future
As you can see, proptech is a complex topic. It’s technology that improves efficiency, but it can cover anything from online platforms to smart buildings.
Some of its applications, such as matchmaking platforms, are already major factors. In other cases, proptech is yet to reach its peak. But looking ahead, the potential is endless.
For instance, consider the technology behind smart homes and virtual assistants. It’s very exciting to think about what real estate will look like once it develops even more. When that happens, both landlords and tenants will have many exciting opportunities to explore. In the end, proptech will empower everyone involved.
Even right now, many benefits of proptech are evident. Going forward, they’ll only grow bigger. Before long, ignoring such technology might come at a price that’s too steep for a landlord to handle.
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