PropTech is a relative newcomer to the “Tech” suffix world; you may be more familiar with the more recognizable MarTech and FinTech terms. While this terminology may be trendy and buzz-worthy, what does it really mean to put it to work in your real estate investment business? Keeping your competitive edge, and creating efficiencies across your growing portfolio, requires deft use of technology. Implementing the wrong solution or technology that doesn’t deliver value can be a costly mistake. Understanding which technology can have the greatest impact on your bottom line is essential.
What is PropTech?
It’s a good idea to understand what PropTech means before you consider implementing it in your own business. PropTech (property technology) is a category of technology dedicated to the real estate industry. Specifically, PropTech helps real estate investors, landlords, property managers, agents, leasing agents, investors, contractors, and other persons or businesses research, build and develop, buy or sell, rent, and manage real estate.
FinTech (such as online rent/payment collection and accounting solutions) and MarTech (such as property marketing syndication functions and tools to create outbound communications) functions are often embedded in PropTech solutions. PropTech-specific tools can include online tenant screening, virtual inspections for rental properties, renters’ insurance solutions, and real estate communication tools, such as landlord-tenant text messaging services.
An Example of PropTech in Action
To bring it down to basics, let’s examine a real-life example of PropTech. Traditionally, tenants have paid rent to their landlords via check, generally by mail. This process requires several manual steps:
- Writing the check.
- Placing it in an envelope.
- Attaching postage.
- Getting it into the post office box.
Then the landlord waits a few days for it to arrive. There are so many inefficiencies here that it’s…