Proptech can address various aspects of real estate sector ranging from investors indecisiveness to the evolving customer expectations.
FREMONT, CA: Proptech is aimed at disrupting the conventional real estate sector. The emerging technological innovations are constantly evolving the way various tasks and processes are being carried out in the real estate. Proptech incorporations can offer a competitive advantage to the real estate companies. Moreover, technological incorporations can also reduce expenses for the real estate managers, thereby allowing them to optimize their expenses towards better quality products and experiment with new business models. However, the long term impact of proptech will take some time to actualize in the real estate industry, especially as many of the real estate agents are too concerned with cost-cutting when it comes to investing in new technology. The main challenge that haunts even those who are willing to invest in proptech is the quest for the technology that can turn the tables for them. Many fear that a wrong decision could further burden their financial reserves.
However, a constant rise in construction cost and the growth in the competition are leading the asset managers to find an alternative. And technology is the first aspect where real estate companies wish to invest. There are various reasons why real estate firms are increasingly moving towards technological advancements. Here are some of them.
• For Better Investment Decision-Making
One of the most significant concerns for real estate investors is high investment asset prices. The high investment asset also means a significant risk for the investors as it can lead to misguided investments and losses. By adopting data analytics technology and monitoring systems, investors will be able to make better decisions.
• Addressing Construction Costs
Real estate firms are finding it difficult to gain a significant margin, which is compounded by the rising cost of construction as well as the simultaneous shortage of labor force. On top of it, the growth in labor productivity is, on an average, 1 percent in the past two decades, which is significantly low when compared to the 2.8 percent growth rate of the world economy.
Digitization of construction can significantly optimize the real estate assets and also boost the average productivity. A range of technological solutions can be deployed to improve the overall operations as well as individual aspects of construction process. For instance, Build Information Modeling (BIM) softwares can be used to develop construction models before actually investing in the construction phase.
• Changing Customer Expectations
Customer experience is evolving and gaining importance across the industry verticals. Real estate firms have quickly realized the trend and have transformed the way properties are being constructed, designed, and leased. Greater customer involvement in all the phases is being stressed upon. Technology can offer an upper hand to the firms that are looking to engage potential customers. Customers can be provided with digital platforms where they can monitor various aspects of their property, such as the history of the property, ownership cost, information over the neighborhood areas, and current value.
Thus, there is an immense potential for proptech in the real estate sector. Various business stakeholders, such as investors, landlords, and developers, need to consider how they can benefit from technological incorporations. On the contrary, if the prospects of proptech are ignored, real estate firms could find it difficult to match up with the tech-laced competitors in the future.
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