Conventional industries like property and finance appear to be going through an interesting shift, brought about by the power of digital transformation.
Buzzwords like “Fintech” and “PropTech” (along with their related terms) may have given rise to confusion (particularly among the general population).
You could probably figure out that PropTech has something to do with property and technology, but what exactly is it?
Let’s help clear things up. Here are 3 examples of some PropTech terms that people might get wrong.
What is PropTech?
PropTech is empowered by digital transformation and made up of innovative solutions within commercial real estate that are driven by technology. PropTech includes new software and hardware, as well as materials and manufacturing processes.
It’s rooted in the digital landscape and paves the way for more efficient systems that relate to new consumption patterns.
It’s a way to optimize the way people engage with real estate and deals with things like researching, renting, buying, selling and managing a property.
Some of PropTech’s ‘techie’ terms and concepts might sound like jargon. However, with a basic understanding of core real estate ideas and new tech tools, a clearer understanding of PropTech can be achieved.
Real estate is the largest asset class in the US, and as a result, new trends have emerged. From coworking to coliving, innovation shapes and fulfils new norms and market demands.
The Shared Workplace
Shared spaces have become quite commonplace and can offer a popular, more cost-effective alternative to renting a full commercial or residential unit.
The Shared Office Layout consists of two or more workers sharing private offices. However, the shared workplace you might probably hear about these days consists of business owners and their employees working under the same roof as other business owners and other employees.
It’s anticipated that by 2020 shared workplaces may overtake traditional serviced offices.
Entrepreneurs, start-ups, freelancers and even entire corporations are beginning to share privileges and utilities through coworking spaces – leading to a more immersive working experience that includes flexible lease options and location benefits. It seems that the future of real estate and the growth of the Sharing Economy are connected.
Online Property Listing and Digital Trading
You can think of online property listings as digital marketplaces (somewhat like an evolution of the Yellow Pages). They started off as platforms for listing residential, retail and commercial properties.
Now, they’ve moved front and centre when it comes to dealing with real estate. Some even argue that property listings have significantly reduced the roles of traditional real estate agents and brokers, who offer their services at relatively high charges. These platforms often require nominal fees and bring an added dose of convenience.
There’s also something called a Multiple Listing Service, which is used by groups of real estate brokers that band together and create their own digital databases.
They get to see one another’s listings of properties for sale, so both the listing and selling broker can benefit by consolidating and sharing information as well as by sharing commissions.
These days, buyers can search through online resources for real estate options. However, an MLS is still used quite frequently (mainly due to convenience).
The term ‘smart home’ essentially describes a house/residential property that’s fitted with an advanced communication network. A variety of appliances and systems are integrated.
These machines can be remotely controlled, accessed and monitored by a homeowner for many purposes, ranging from surveillance and security to convenience and entertainment.
Smart devices often use smartphone apps and the internet to accomplish different tasks. You can watch your pets with smart security cameras, control smart lights, monitor temperatures with smart thermostats or get warned through an app if your door is opened.
The smart home trend is part and parcel of the emergence of IoT. The smart home security market could grow to 22 billion U.S. dollars worldwide in size by 2021.
Home-buyers can complete property purchases virtually, costs can be reduced and the aspect of convenience can be optimized through PropTech. We may very well be living through a huge shift in the way the entire real estate sector functions. Forward-thinking entrepreneurs who look to build brand awareness through organic digital content could stand to benefit.
With so much happening, a clear grasp of core ideas driving this shift can be achieved by understanding and demystifying its vocabulary.
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