What is “PropTech” and why companies are developing it
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“PropTech” is a recent buzzword in commercial real estate. Similar to “FinTech” (‘finance + technology”), PropTech is a movement in the real estate market toward efficient systems rooted in exploring the digital landscape and tending to new consumption patterns.Here’s everything you need to know, from what it is to why developers, investors, and property management companies are interested in developing it.
What is PropTech?
Proptech is an innovative approach to real estate in which technology optimizes the way people research, rent, buy, sell, and manage a property. The cross-industry technology benefits all parties involved – developers, investors, and property management companies – making it a recent buzzword in commercial real estate.PropTech real estate startups are all those that are attempting to make the real estate industry (especially in highly dense cities) better, more efficient, and easier to navigate for all parties involved. It’s no wonder that New York is a leader in this up-and-coming industry with so many real estate concerns, such as the lack of affordability and of housing units.The rise of this industry considers the need for a technological and mental change required of the real estate sector to address the inconveniences of its consumers.
The PropTech industry
Real estate is the largest asset class in the US, and as a result, new trends are constantly emerging across the industry. From coworking to coliving, the real estate market innovates and shapes its endeavors to fill the demand.Since 2014, the PropTech sector has been noticeably experiencing strong growth. Venture Capital investments started at 186 million USD globally in 2011 and grew to 2.67 billion USD by 2016 and 12 billion USD in 2017, according to a report from RE:Tech. Most recently, the Mid-Year 2018 Global Proptech Confidence Index from MetaProp found that “Ninety-six percent of investors plan to make the same or more PropTech investments over the next 12 months; this is up 76 percent from the year before.” Interestingly, a growing percentage of these investments is going towards companies in their growth stage.
Why develop PropTech?
Technological innovation has revolutionized several other industries. Look at Uber, Airbnb, Opendoor, Seamless…I could go on. The same benefits — streamlined efficiency, better consumer experience, simpler processes — can and should be apparent in the real estate industry.The traditional real estate suffers from several pain points:
- Unaffordability (supply-constrained)
- Manual, tedious leasing and payment processes
- Lack of flexibility
- Lack of community
With PropTech, companies are trying to address these pain points and introduce an innovative edge into each step of the process and revitalize existing systems.
How Common is changing real estate tech
Common is one of those companies using and creating new, proprietary PropTech.Though Common is not considered a PropTech startup, we are unique in that we use PropTech in our processes while also — through our in-house Dev team — innovate cutting-edge technology. These technologies allow us to improve efficiency in the real estate market, make the leasing experience better for our members, and equip our teams to be better property owners.Examples of PropTech we use:
- HelloRented or Obligo (for lease guarantee + no security deposit)
- Online ticketing system for any property issues
- Connect by Common app (event RSVP, directory, live chat, perks)
- Virtual touring (Matterport)
- Docusign to sign leases
For Common to serve 700+ members across the country, we have to constantly innovate, scale, and grow. PropTech allows us to do just that. Try coliving today.
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