PropTech for Landlords in Brief
PropTech, or Property technology, has been revolutionizing the real estate business in recent years, and as a landlord, you can hardly avoid it. In short, PropTech stands for property technology, the way FinTech stands for financial technology, or InsurTech stands for insurance. Lending and investment, conveyancing, property management, letting agencies and their relationships with renters and with landlords are being disrupted by what’s emerging from the PropTech sector.
Investments in PropTech show a growing trend
Technological innovation changes lifestyles and offers the opportunity to widen the scope of choice in all areas of life. The real estate market is not an exclusion. The investments in PropTech show a growing positive trend. The Global PropTech Confidence Index for mid-2018 suggests that overall investor confidence on a scale of 1-10 is at an all-time high of 8.7, up from 8.0 at the end of 2017. This coincides with a report that $12.6bn in funding was poured into PropTech startups in 2017, up from $4.2bn in 2016.
A slow, but inevitable revolution
Now, we are entering a new phase in the evolution of real estate technology. This phase will likely include companies that leverage sensors and virtual reality to create smarter spaces, and platforms to manage transaction service more efficiently. Most likely, we’ll be seeing a rise of artificial intelligence in the real estate industry, with virtual asset and property managers. Virtual reality could change the way we carry out property viewings making them more convenient using special viewing scheduling tools. Moreover, in the near future, with VR headsets, prospective tenants may not even need to visit the property in order to view it.
Will PropTech impact landlords?
The answer to this question is YES. It may take some time as the property sector, by its nature, is less open to disruption than many other sectors, such as retail and financial services. In 2017, UK-based KPMG conducted a survey of more than 330 real estate decision makers from 36 countries. They were asked a question “What do you see as being most disrupted by digital/ technological innovation over the next three years?” Here are the answers: 30% of the respondents think that real-time performance data will be imposed on technological innovation most of all, while 16% consider letting activity as such. 92% of residential and commercial property owners in the UK view PropTech as an opportunity for disruption in their industry (according to The Royal Institution of Charted Surveyors and Trident Building Consultancy). Alongside, one of the biggest changes landlords may see is among letting agents. Research shows that traditional property companies are now losing their market positions. While this might seem alarming if you’re a landlord who uses such companies, this is a space where PropTech is popping up to fill the gap.