Convenience is no longer the selling point it once was, it’s a quality customers have come to expect from their products and services. The on-demand economy has shifted the way in which companies operate, and to sustain high levels of consumer satisfaction, they have to provide instant gratification.
Many of the consumers shaping this trend are millennials, who, if projections are accurate, will surpass baby boomers as the largest living adult population in 2019. As the millennial demographic continues to age, their here-and-now mentality will affect trends in the housing market, and the on-demand economy will thrive.
Naturally, technology has to meet the expectations of young families who are searching to purchase or rent properties to accommodate their needs. PropTech and RentTech have shown incredible promise in this regard, and as their role in real estate continues to grow, it’s clear they’ll prove indispensable in the future.
Today’s PropTech and RentTech products have incredible potential for saving time and money, improving workflow and streamlining processes fundamental to the industry. The increasing popularity of these technologies will create an on-demand housing market that aligns with modern priorities. In many ways, it already has.
Real Estate’s Digital Transformation
Venture capital firms invested $12.6 billion in PropTech companies in 2017, and that momentum carried through 2018. The success of PropTech bolstered confidence in the industry, and an impressive 96 percent of these same venture capital firms indicated their intention to make the same number of investments or more.
To understand the popularity of PropTech and categories of the market like RentTech, real estate professionals are already starting to see the benefits of using these technologies. Property owners, managers and residents all enjoy the wide range of benefits of more efficient, automated and enjoyable rentals.
When considering smart apartment tech and AI integration, among other products detailed in the next section, the appeal of PropTech is undeniable. More than that, these products provide a level of adaptability that will prove crucial to sustaining success in 2019, considering the coming market correction.
Expanding on that subject, the real estate market’s ascent over the past five years has greatly increased the likelihood of a market correction in the near future. Rental property owners will have to change old practices and adopt new technology to attract tenants, and PropTech provides a solution to the difficulties they’ll face.
When reviewing the advantages of PropTech and RentTech, the available products within these categories, and the probability of a market correction, it’s clear to see the catalyst behind real estate’s digital transformation. Still, real estate professionals are likely curious to know what form this transformation will take.
Winners are Emerging
Smart apartment tech and AI integrated with CRM systems enable prospective tenants to pursue questions about rental availability, organize a self-tour and lease a unit without having to interact with on-site staff until move-in day. The simplicity of the process will likely lead to higher occupancy rates.
Multifamily property owners can also use this technology to reduce other common stressors, allowing their tenants to schedule apartment cleanings, maintenance appointments and even dog walking services, all through the convenience of their smartphone. RentTech streamlines the rental experience in other ways.
Moving toward the future, owners and managers of multifamily properties will likely underwrite smart thermostats, moisture sensors and load monitoring on an operational/cost-saving basis. These technologies will see widespread adoption on the scale of entire buildings, instead of unit-by-unit deployment around demand.
Rentberry is one of many promising startups, having streamlined the rental process to an incredible degree. The long-term rental platform manages everything from hosting an open house to collecting rent payments, and its transparency in rental applications empowers tenants to save a substantial sum in frozen security deposits.
Among other apps that boost the tenant experience, Bixby has impressive flexibility, working with various property types and portfolio sizes. It improves resident relations, managing maintenance requests and rent collection while serving as an amenity marketplace. With push, text and email notifications, it’s easy to use.
Lane is a cloud-based white label app for building operations. Property managers can schedule maintenance alerts and post handbooks on the platform, accessible to tenants who see every new notice and announcement. The app’s integrated analytics also allow managers to check which of their tenants viewed the information.
The lifestyle amenity provider Amenify has shown PropTech’s capacity to increase satisfaction among residents. To accommodate the growing checklists of millennial renters, they’ve offered on-site experiences that go far beyond dog walking and apartment cleaning, letting tenants enjoy personal training sessions and massages.
Of all these apps and platforms, perhaps the most obvious contribution to the on-demand housing market is something as simple as DocuSign, a type of software which dramatically reduces administration time. It accelerates the letting process by permitting tenants to sign contracts and receive receipts of payments through a link via email.
PropTech’s Future Depends on how it Adapts
Aligning the real estate industry with today’s high standards of convenience is crucial to the success of property owners and managers. Millennials will soon surpass baby boomers as the largest living adult population, and accommodating their preferences will determine a property’s viability.
PropTech has already made strides in simplifying the rental lifestyle for tenants, and the rental process will continue its transition in the coming years toward a more responsive, personalized experience. The products detailed above have already reduced transactional friction while improving management practices.
These technologies will also allow potential tenants/buyers to determine the best course of action between several factors affecting property ownership. The holistic assembly of previously disparate information will provide new clarity for those who are hesitant about rental or ownership.
Looking ahead, it’s safe to speculate that property owners and managers will start to see PropTech increase their top and bottom lines. Investors in residential real estate will seek properties with advanced infrastructure as outdated buildings fall to the side. If the on-demand housing market continues down its current path, this is inevitable.
The likelihood of a market correction in 2019 will spur these changes. The strain will cause property managers and owners to partner with technology companies, both to lower their operating costs and ensure high rates of occupancy and tenant satisfaction. PropTech will prove all but mandatory.
The Necessity of Change
The real estate industry needs to conform to the expectations of homebuyers and tenants. Through PropTech and RentTech, they can—allowing for a level of convenience that would otherwise prove impossible. These technologies are creating an on-demand housing market, and they’ll sustain it.
With this in mind, professionals in real estate should research products and services they can employ to appeal to potential buyers and tenants. These systems will help them improve upon their practices, and over time, outpace their competition.
Adaptability is integral to success moving forward, and it begins with acknowledging the necessity of change.