In an age of digital transformation where technology is being applied to every area in every industry across the globe, it’s no surprise that the commercial real estate (CRE) and multifamily housing property management sectors are jumping onboard.
In a recent study by real estate services specialist JLL, the number of property technology (PropTech) startups increased by more than 300 percent over the past decade. Furthermore, the Center for Real Estate Technology & Innovation reported that the total investment in real estate PropTech in 2020 hit a record high of $23.75 billion.
PropTech is disruptive and changing CRE in positive ways, for all parties—investors, property owners and operators, vendors and residents alike.
Let’s dive in and see what PropTech applications and solutions are key—specifically as PropTech relates to the $148 billion U.S. multifamily housing sector.
What is PropTech?
PropTech is the use of emerging technology and software, including artificial intelligence (AI), information technology (IT), internet of things (IoT) and others, to improve the way real estate professionals, including property management owners, operators, vendors and managers, do business, and engage and serve their residents and other constituents.
Investment in PropTech is on the rise. In fact, over 58 percent of real estate and property companies currently use at least one or two PropTech tools.
There is a wide and diverse range of property technologies that enable the industry to operate with increased efficiency, ease, and flexibility to improve operations, including client engagement and relations.
Technology now touches every aspect of the real estate supply chain including investing, developing, managing, appraising, selling, renovating and living.
For multifamily real estate, the ultimate goal in PropTech is to drive superior operations and deliver world-class experiences for residents, employees and partners.
Here is where PropTech investment dollars matter in commercial multifamily real estate.
Must-haves of multifamily PropTech
According to U.S. Census Housing Data, more U.S. households are renting than at any point in the last 50 years. FY2021 renter statistics show that apartment demand has increased significantly with more and more individuals allocating a large percentage of their salary to paying rent.
The drive to attract new renters has never been more competitive. PropTech helps owners remain relevant, and acquire, secure, and convert leads to signed leases to increase overall market share. These innovations offer value by helping to increase revenue, decrease overhead expense, increase operational efficiencies and improve the safety and overall renter experience.
Here’s a view of some of the top PropTech solutions supporting the multifamily sector:
- Virtual tours are a form of semi-immersive, virtual reality technology that allows potential renters, vendors and other business partners to remotely view, explore and experience properties, amenities and units. Virtual tours are an excellent way to represent properties and their assets so visitors can explore as if they were actually on-site and present.
For property owners and operators, virtual tour tech can drive significant operational efficiencies (saving time, money and resources) while increasing visitor safety and convenience.
- Contactless visitor management Cloud-based visitor management systems help property owners and operators manage visitor, employee, vendor and resident check-ins and outs. These tools also assist with security and compliance by assisting with visitor pre-registration and screening, maintaining property capacity limits, contact tracing, temperature scanning, and visitor data centralization and tracking.
- Online application and leasing solutions serve owners, operators and tenants alike, helping to simplify and streamline the leasing process. Property managers can improve the tenant screening process with these solutions, ensuring they acquire legitimate, responsible and credible tenants.
Specific features within this category of PropTech also help to verify critical resident information; provide fraud detection; assist with processing online payments; and more. Online applications and leasing tech also allow tenants to view promotional materials like layouts and floor plans, select desired units, complete rental applications with ease and safely pay any fees associated with the application.
- Online maintenance systems ensure a property’s critical assets remain available and are optimized to meet the demands and needs of its residents. Through this tech, residents can schedule, and owners are able to facilitate the management of unexpected and planned maintenance and repairs activities, resources and requirements.
- Digital security systems are a required feature of all multifamily property businesses. Every area and unit require secured entry for safety and risk management. Digital security systems provide owners, operators and residents with keyless, electronic access to units, shared spaces and other areas. This boosts security, reduces costs and provides a valued level of convenience.
- Smart home tech from keyless locks and voice-activated lights to app-controlled thermostats and appliances, smart home tech adds tremendous value for residents, property owners, operators and managers. It helps to drive incremental revenue while significantly increasing renter satisfaction.
It may seem that smart home tech aligns solely with luxury properties In reality, it is increasingly essential for all multifamily properties, performing critical functions like leak detection, temperature and access control, property protection and renter safety.
Multifamily PropTech represents an exciting way to better connect people, improve operations and succeed in the future. The many benefits are undisputed—from reduced operational costs to delivering a more interactive and incredible living experience for residents.
PropTech in the multifamily sector cannot and should not be ignored. It is driving a new world of opportunity and revenue for owners, operators and managers, and convenience for residents.
Author Daniel Berlind, CEO of Snappt