With all the time-consuming work of taking care of your tenants, properties, and vacancies it’s hard to keep up with the latest and greatest technology terms and tools out there.
Proptech is a newer buzz word swirling about that you may have stumbled across. Beyond being a trendy term, what does it mean for your property management business, should it get some of your attention, and what is its future?
This quick read will describe proptech to answer those questions. Don’t worry, no jargon or heavy concepts; this overview will help to ensure you’re up-to-date with the latest property management technology information.
As you know, staying up-to-date can help you decide if you are maximizing the tools you currently have or need to upgrade to more efficient methods.
What Does Proptech Mean?
Simply put, proptech is the combination of two words: Property + Technology
But simple doesn’t tell the whole story. Let’s take a look at a good definition to clarify.
Proptech (property technology) is a category of technology dedicated to the real estate industry. Specifically, proptech helps private landlords, property management companies and property managers, real estate agents, leasing agents, investors, contractors, and other persons or businesses to research, build and develop, buy or sell, rent, and manage real estate.
The simplified term and definition are a good start but specifics will illuminate what it can do (benefits) for those who use it. For that, a little background and understanding of similar technology will shed some light.
Proptech vs. Fintech vs. Martech
Different market segments require different types of technology to service that industry. The technology deployed for those specific tasks for that unique industry is segmented with its own terms.
The larger real estate property segment we call proptech often intersects and includes those segmented industries such as:
Fintech = Finance Technology (or Financial Technology)
What is Fintech?
All the processes of bookkeeping and accounting, managing transactions between financial institutions, and payment processing are the heart of fintech. It covers accounting software such as Quickbooks and Xero, credit card and merchant processors, online banking, and anything that makes financial transactions efficient and secure.
Martech = Marketing Technology
What is Martech?
Martech includes technological tools that make marketing easier from design to campaigns to tracking objectives. This umbrella term also covers advertising (adtech).
Other technologies that have separate technology tools are:
- Construction Technology (Contech)
- Commercial Real Estate Technology (CREtech)
- Real Estate Technology (REtech)
The above three technologies are under the proptech umbrella. Proptech, especially for property managers and landlords includes elements of both fintech and martech described in the Property Management Software section below. If you are tech-savvy, feel free to skip ahead. For those of us technology-shy, we’ll continue with a primer.
Proptech, fintech, martech, etc. are built on what’s called an internet technology (IT) infrastructure. Most are cloud-based. Cloud-based means the data and the program to access and use that data are stored on remote data servers instead of on a local computer and hard drive.
If technology isn’t your ‘thing’, just remember when you hear someone say it’s “in the cloud”, it simply means the information is stored in big data centers that you access using the internet and it’s not downloaded or stored on your phone, computer, or other devices.
Property management software often is designed in this manner to help landlords, tenants, owners, and property managers interface with that software and data in the cloud. That service is referred to as Software as a Service (Saas).
SaaS uses huge data storage platforms such as Amazon web services which keeps data secure. One main benefit to the end-user is that the property management software company can make updates and improvements to the software without interrupting service.
Cloud-based rental software also increases accessibility; allowing landlords and property managers to be on the go and still conduct business while end-users can access their tenant portals and owner portals anywhere.
Property Management Software | Proptech, Fintech, Martech
To recap: there are SaaS companies (Software as a Service) that use internet technology (IT) to create property management software classified as proptech. The software and data are stored on large secure server centers (‘The Cloud’) which is easy to update and access.
Great! But what kinds of tools are included in the proptech that makes up property management software?
Fintech in Property Management
Well designed proptech for landlords will include:
- Options to collect rent online such as ACH transactions and credit card payments and distribution tools to pay owners using online payment processing.
- Connection to a cash payment network to receive tenant cash payments electronically.
- Bookkeeping ledgers for properties, tenants, owners, and bank accounts.
- Financial reports and connections to submit electronic tax documents such as 1099s.
- Bank account synchronization to pull in and compare bookkeeping to bank statements.
- Bank account reconciliation tools.
Martech in Property Management
When considering property management software, check to see if it includes martech options such as:
- Tools to create an online presence and market your properties.
- Options to syndicate vacant properties on a network of rental vacancy websites.
- Templates and tools to create custom forms, emails, and text messages.
- A mechanism for collecting and managing leads.
Proptech Tools for the Rental Market
In addition to fintech and martech tools, make sure your property management system has these proptech services and partnerships with third-party vendors for:
- Online tenant screening
- Pet screening
- Virtual inspections
- Renters insurance
- Text messaging
- Tenant Portals
How Does Proptech Change Real Estate?
Proptech changes the real estate industry by making resources, tools, and system easy to access and cost-effective. In addition to just keeping up with consumer patterns and younger generations, having a dedicated focus on real estate technology through proptech:
- Adds value to all users.
- Provides better communication between users.
- Makes tedious processes simplified.
- Allows for easy expansion of services and tools without heavy investment or difficult learning curve.
- Gives a one-stop approach to tools that work well together saving time and money.
Is Proptech the Future of Real Estate?
Before the pandemic, proptech for property managers and landlords was useful and efficient but not necessarily imperative. Now proptech is invaluable for the new normal of virtual and online services. As landlords begin to switch to these new technologies, the efficiencies and cost benefits will outweigh the learning curve.
With the rising renter demand for technology (such as smart homes) and as property needs change, new features and tools will be designed and added to the proptech universe. The key is integration. That’s where proptech will shine in the future by bringing together easy to use solutions under one umbrella system.
The world is changing. In this new paradigm of physical distancing and virtual activities, now more than ever, it’s important to stay up-to-date with current trends and technologies for your business.
As technology develops it becomes more difficult to get the same amount of efficiency with old school methods and we all know time is money. If you are using separate and old systems and processes, check out what a great property management software can do to help you manage all areas of your rental business.