The Rise of PropTech: What Property Managers Need to Know

Property technology, or PropTech in short, is a concept that combines advanced digital solutions designed for the commercial and residential real estate market. Typically, such solutions offer their users an innovative approach to all processes and transactions that accompany the life cycle of a property, including how it is designed, built, evaluated, financed, managed, used, rented, bought, and sold.

According to statistics, the global PropTech industry market is expected to grow from USD 20.19 billion in 2022 to USD 75.39 billion by 2032, at a Compound Annual Growth Rate of 15.7% during the forecast period (2023-2032). Such rapid growth of the market directly indicates that PropTech solutions will only gain popularity, solving such problems as the optimization of property management, improving customer service, and increasing occupancy. If you want to get benefits from PropTech right now, this article will explain to you how it is actually achievable.

Which PropTech Solutions Will Be Most in Demand in the Coming Years? 

Let's take a look at some of the specific PropTech real estate solutions that interested real estate investors and business owners can lead today.

The first example is a versatile, customizable property management software that can be presented as a Software as а service (SaaS) and then distributed to other real estate companies for a fixed monthly fee. Nowadays there are various software solutions that are available for real estate.

The second example is software for checking the integrity of tenants. This is especially relevant due to the fact that the demand for rental property management market is growing faster than for real estate buying and selling services. This means that the number of agencies acting as intermediaries between tenants and landlords will also grow.

Finally, you may consider developing software to plan and track maintenance requests. Such solutions are aimed at increasing the loyalty of customers (tenants), which in the current realities is an essential need for any business.

Why Does PropTech Have A Great Potential?

Now let’s answer the question of how PropTech is changing real estate. Above, we have already cited relevant statistics that predict a 15.7% compound annual growth rate (CAGR) in the next decade. And this can be explained by the following: the real estate market is growing, and the restrictions that companies have previously faced (coverage of target audience, growth opportunities without the need to physically expand the staff, as well as the prospects for profit increase), today, thanks to innovations, are being erased. Now PropTech real estate companies do not need to have dozens of physical offices to access new locations – innovations make it achievable at a distance and in real time.

Now let’s answer the question of how PropTech is changing real estate. Above, we have already cited relevant statistics that predict a 15.7% compound annual growth rate (CAGR) in the next decade. And this can be explained by the following: the real estate market is growing, and the restrictions that companies have previously faced (coverage of target audience, growth opportunities without the need to physically expand the staff, as well as the prospects for profit increase), today, thanks to innovations, are being erased. Now PropTech real estate companies do not need to have dozens of physical offices to access new locations – innovations make it achievable at a distance and in real time.

Problems You May Face

With all the benefits that PropTech can bring to the real estate industry, you, as the owner of a real estate PropTech solution, may face some barriers. However, with the cooperation of an experienced development team, all of them are fixable, so you just need to discuss all these bottlenecks with your team before starting the project to avoid a negative outcome.

In particular, the first problem is that your PropTech software may be ahead of its time. The introduction of advanced technologies, at first glance, may seem like an advantage in terms of product positioning in the market. However, people who are used to working with tools that appeared more than a decade ago may find it too complicated. To prevent this from happening when presenting your solution, you will have to explain why exactly you used innovations in your product, as well as clearly demonstrate how to use them. As for the process of working on a custom product itself, you will need to discuss with your team how to keep the entry threshold as low as possible (thus, they may decide to resort to skeuomorphism so that end users do not feel when interacting with your product as if they are managing an intergalactic ship).

As for the second challenge of this technology in property management, it lies in the potentially high cost of development, especially when it comes to the implementation of artificial intelligence. The fact is that your team may not be able to find a suitable AI model among the public ones (it all depends on what kind of tasks the artificial intelligence should solve), and thus, your team may need to develop a self-learning model from scratch. This, in turn, is usually a very expensive and time-consuming process. Therefore, if AI is not a key feature of your PropTech commercial real estate project, it will make sense for you to start with the development of an MVP to allocate a budget for the project in stages.

Final Thoughts

Now you know the answer to the question: “What is PropTech in real estate?” Therefore, summarizing the above, we can conclude that the potential of PropTech will grow over time, influenced by both internal factors of the real estate industry, such as the growth of consumer opportunities and population as well, and external ones related to the emergence of new and development of existing digital technologies. Especially promising from this point of view is artificial intelligence, which every year becomes more and more perfect and accurate.

Together, these factors create favorable conditions for the development and launch of custom PropTech solutions aimed at transforming the real estate industry. In particular, if you are interested in creating a PropTech real estate product for your business, you can resort to our services. We have successfully launched over a dozen projects for this business niche and are now ready to apply our best practices to bring your business idea to life. Feel free to contact us to learn more about PropTech and discuss your project in detail.