Property technology, or proptech, has helped residential property managers make their operations more efficient, expand their business and meet tenants’ demands, Will Moxley, SVP, Product at AppFolio Inc. recently wrote for Forbes. The Internet of Things (IoT), consumer financial technology (fintech) and remote work were all key factors in proptech creating such positive outcomes.
These same factors can have the same impact for commercial real estate owners as they also often rely on in-building connectivity to power the proptech necessary to meet their tenants’ growing demands.
Keep reading for a closer look at how proptech innovation is helping CRE owners navigate an industry that’s increasingly becoming more technology driven.
IoT makes CRE buildings “smarter” and more efficient
With IoT, building owners can automate a number of tasks that previously had to be done manually as well as make their properties more energy efficient. For example, smart lighting systems and sensors can determine when a particular room’s lights need to be turned on at any given moment. Rather than leaving them on throughout the entire workday, lights turn on automatically when employees enter the room and shut off just as easily when it’s empty again.
The same principle applies to heating and cooling systems; more highly populated areas of the building can get the bulk of the air conditioning or heat depending on the time of year. Managing heat and AC this way helps CRE owners save energy and money.
Additionally, smart lock systems can help make buildings more secure and make it easier for employees to enter and exit with their mobile device vs. always needing to know where their ID badge is. Connected, keyless entry also helps property manager monitor how many people are in the building at a given time.
Fintech simplifies the rent payment process
As more people pay their bills and make bank transactions on their phone, it only makes sense that they can do the same for their rent. Proptech allows tenants to make rent payments as easily as they would at a restaurant or the grocery store, Forbes reports. Rather than go through the write and mail a check process, tenants can pay their rent each month through an online portal or app. Meanwhile, building owners can securely connect their bank account to one of these platforms and create automated transactions.
Proptech is also providing new security deposit alternatives, such as digital payments, which helps decrease tenants’ financial burden while moving, but also protects property managers. Plus, managing financials online means property managers don’t have to spend so much time keeping track of security deposits or returning them.
Proptech makes it easier to keep up with the remote work trend
Approximately 92 million people have the option to work remotely for at least part of the week, according to McKinsey. The trend has forced residential property owners to do things such as building larger apartments for tenants wanting more space for their home office as well as adding co-working spaces and high-quality office areas.
Meanwhile, the remote work trend has pushed CRE owners to reconsider their ways of doing business, too. Proptech has not only helped building owners adjust, but it also become necessary as a number of businesses and employees now feel it has to be “worth it” to return to the office. Enhanced, in-building wireless connectivity was a given — workers need it especially as video conferencing has become more prominent.
Tech has also proved valuable as more tenants want flexible lease terms because their businesses operate on a hybrid work model. A lot of property managers are adding short-term rentals to accommodate this request, according to Forbes. Property management platforms have added functionality to make it easier to manage short-term rentals on mobile devices.
“These trends will continue to drive consumer habits and expectations into 2023 and beyond across various industries,” Moxley wrote about what the proptech innovation surge means for other industries. “To succeed, businesses should not merely keep pace but rather focus on how they can strategically benefit from these new offerings.
“Advanced tech platforms provide major potential upsides for business owners — including everything from increased efficiency and the automation of mundane tasks to reducing user friction and speeding payment processes.”