In recent years, Proptech solutions have been amazingly effective in the real estate market. By using an innovative approach to the acquisition, operation and management of real estate, both clients and employees of this industry benefit from fundamentally different conditions for interaction.
This contributes to the scaling of the business: all operations are realized even faster thanks to automation, coverage of objects becomes wider, and associated costs become lower. Below we will discuss in more detail how all these prospects can be realized from the practical point of view.
Proptech Development: Development Vectors
Most Proptech startups can be divided into two categories:
- solutions that use tools to help real estate professionals improve their services or increase productivity;
- solutions that seek to completely replace real estate professionals.
As for the profitability of Proptech projects, it is beginning to gradually increase. The volume of venture investments in PropTech in 2017 alone amounted to $13 billion, which was almost twice as much as in the previous 2016 year.
The size of startup budgets is also increasing. The first PropTech startup, valued at $1 billion, was founded in 2016. In the same year, three new companies followed suit. In recent years, these figures, according to Crunchbase, have been growing even more rapidly.
Which Technologies Can Help Real Estate Companies Scale?
So, let’s determine what technologies in the field of Proptech can help you scale your business:
- Internet of Things. The Internet of Things is already actively being introduced into the real estate market, mainly in the field of the implementation of engineering solutions for buildings. Companies are planning to focus on the development of sensor systems that are also known as smart home solutions. So far, these operate within strictly limited areas. In the future, it will be possible to create a unique microclimate for each individual room, fully controlled by smart devices. This is already achievable, but the cost of such projects is still unreasonably high;
- Blockchain. The second most promising technology is the blockchain, which has long managed to go beyond the cryptocurrency market. In particular, blockchain-based solutions may soon appear on the real estate market. For example, smart leases that allow you to rent and sell real estate in the most convenient and transparent way, without the participation of the owner;
- Geopositioning technologies. These technologies (GPS, 3G/5G, etc.) are the most relevant in the development of APIs and complete software solutions (websites, web applications, mobile software) for real estate agencies. For example, the legendary Zillow API, which is based on the technology of geolocation, allows you to determine how trustworthy a particular property is (what else is located in the neighborhood, what are the prices of other objects in the area, etc.);
- Virtual reality. Companies can implement full-fledged VR-based video tours of objects planned for construction, so that the potential customers could use virtual reality glasses to fully appreciate the appearance and functionality of the interior and exterior;
- 3D printing. Apparently, about 25% of all buildings in Dubai will be 3D-printed by 2030. Sounds like science fiction? But it’s not. This approach to the construction of new real estate will eliminate the human factor, increase the speed of the projects’ implementation, as well as optimize the design phase.
If we are talking about real examples of real estate management software development, most companies aim to combine several technological solutions in order to offer their customers the best of the best. For example, the Opendoor startup first buys real estate from homeowners on the Internet at a price set by an algorithm based on Big Data, then restores it and brings it back to the market. The purchase process becomes extremely convenient: due to the introduction of electronic locks, the code for which can be found through the application, the startup’s clients get the opportunity to inspect their premises at any convenient time without prior appointment.
What Is the Forecast for Conservative Real Estate Market Players?
Finally, a few words about forecasts for those companies that do not want to radically change their format of activity and plan to limit themselves mainly to software for optimizing work processes. As the Proptech industry develops, real estate agencies will cease to be monopolists, opening up opportunities for the development of small and medium-sized businesses. All this will become real thanks to automation applications, as well as applications based on MLS.