PropTech's Role in the Evolution of the Real Estate Sector

11/10/2022 11:55:29 AM

Thanks to the accelerated adoption of digital solutions during the pandemic, a new wave of fintech is penetrating a wide range of financial processes.

The pandemic brought about a lot uncertainty in the real estate sector, initially considered a non-essential business, engendering a lot of soul-searching for companies. While real estate technology platforms have been coming into their own for some time, the pandemic marked an urgent turning point. Agents had to figure out how to turn a business that’s typically very hands-on and personal — from home tours to document signing — into a much more resilient, efficient virtual business.

Luckily, fintech is also at a turning point, where the underlying, low-level APIs and services and product suites are available off the shelf to power innovative new platforms, or property technology. Also known as proptech, the term generally refers to the application of information technology and platform economics to real estate markets including how people research, rent, buy, sell, and manage a property.

There are downstream benefits, besides the ability to improve their services for consumers: leveraging respected technology also gives more confidence to the secondary banks that ultimately help fund these loans.

The real estate industry has embraced the PropTech and has fully surrendered under it. PropTech has further divided into sectors that include:

1. Smart Property: It describes the technological platforms that assist the management and operation of real estate assets. These include either the single property units or more. The technological platform can deliver information about buildings performance and also facilitate the building services.

2. Sharing economy: In the sharing economy, there is distributed ownership of property assets. The technology based platforms facilitate the use of assets like hotels and offices. Example-Airbnb

3. FinTech: Digital platforms that facilitate the trading of real estate assets like buildings, shares, funds, debt or equity.

What are the Benefits of PropTech?

Although the advancements in the field have barely scraped the surface, they have still shown tremendous success. PropTech has equipped the developers, agents, landlords, buyers, and sellers with exceptional tools to make their real estate journey smooth and more fruitful. From providing useful data to assisting in sales and advertisement, here is how the technology is transforming the industry:

1. Data-Driven Decisions

PropTech offers a platform for developers, agents, consultancy firms, etc for collecting and analyzing data. This allows various stakeholders to study market trends, understanding buyer requirements, and competitor strategies. Such information helps in making informed decisions with a minimum number of resources.

2. Data Storage

Before cloud computing, real estate agents and companies relied on physical data rooms to make decisions about their portfolios. However, with the advent of PropTech, companies can now store their documents on external servers and access the data over the internet from every corner of the world. This encourages transparent transactions, saves money and allows you to work on the go.

3. Better Advertisement

Digital real estate has opened new avenues for advertising and marketing real estate properties and services. From lead generation to funnel optimization, advertisers have multiple tools at their disposal to generate brand awareness and convert leads to clients.

4. Sales Assistance

Technological advancements are made to provide added assistance to individuals and firms and PropTech is no different. From publishing listings online to offering 3D virtual tours, this technology has made the buying-selling process easy and convenient. 

5. Improved Communication

PropTech has severely helped in improving communication throughout the real estate industry. Companies and agents can stay well connected with their prospective customers through apps and chatbots and keep them updated on the progress of projects.

While tools like chatbots help resolve user queries within minutes, there are other advanced tools which have improved the functioning of the real estate industry. For example, special platforms like Whiteboard have enhanced communication between landlords and tenants. It lets property managers or landlords convey relevant information to the tenants, and owners can also directly respond to tenants’ requests.


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