What Is Proptech?
If you have ever visited our website, spoken with a member of our team, or read about Home Made elsewhere, you will know that we are not a lettings agent, we are a proptech. But what is proptech? How is it different to services you have used before? Landlords and renters ask us these questions on a daily basis, so we have put together this overview to explain what proptech is, what being a proptech means to us, and how you can benefit from implementing proptech solutions.
What is proptech?
Proptech literally means ‘property technology’. The moniker is applied to the variety of technology platforms and services operating in the real estate industry. Proptech can refer to software, services, or hardware. For example:
- Listings services and tech-enabled brokerage platforms.
- Digital dashboards.
- Research and analytics.
- Smart-home technology.
Proptech solutions are revolutionising the traditional property industry by cutting out paperwork, speeding up transactions, maximising revenue, and reducing costs. This is achieved through tech-enabled efficiency gains, marketing and asset management informed by smart data analytics, and lower overheads for businesses (who subsequently pass savings on to the consumer).
As with young companies in every different vertical that emerges within the tech startup scene, proptechs are also defined as much by their mission and values as their product offering. Startups in the proptech space see themselves as the vanguard of a disruptive new movement within the sector - challenging the outdated attitudes, operating models, and culture of the traditional property industry.
Landlords should care about proptech because they stand to benefit immensely from the ways in which proptech is shaking up the traditional sector. By implementing proptech solutions to streamline the marketing and management of your portfolio, you can extract top line and bottom line gains. You can maximise your revenue by reducing void periods and increasing renter retention while also enjoying significant cost savings on the lettings fees that hit your bottom line. This is in addition to receiving high quality reliable, transparent and customer-centric service - a refreshing change of pace if you are used to dealing with high street agents.
What are some examples of proptech in action?
You are likely already familiar with a number of different proptech services. Below are some of the most common examples of proptech offerings available on the market.
Of all the many varied examples of proptech, landlords are probably most familiar with online listings portals such as Rightmove, Zoopla, and OnTheMarket. A prime example of the platform economy, these listings portals facilitate significant transactional volume by allowing property adverts to achieve a far greater reach than anything individual agents or landlords were able to achieve in the past.
These platforms also offer data services to subscribers, providing detailed market insights that aid with valuations, marketing, land acquisition, planning, pricing strategy, and risk mitigation. They have had a profoundly transformative impact on the industry and it is now impossible to imagine marketing a property without them.
The success of online listings portals has also opened up a market for low-fee online agents serving DIY landlords. These companies operate exclusively online and serve as tech-enabled brokerage platforms. They allow individual landlords to market their property on listings platforms without using a lettings agent and find tenants directly.
They do not offer an end-to-end service comparable to the offering of a traditional high street agent, but for landlords who are well-versed in private housing regulation and have the time and expertise to handle their own tenancy administration these marketing platforms can significantly reduce costs.
Cloud-based software, such as the Goodlord platform, allows landlords and letting providers to manage the whole pre-tenancy process digitally. This includes renter credit and background checks, contract generation, and automating the distribution of compliance documents. By centralising and digitising the tenancy administration process, lettings platforms reduce the time taken to complete a transaction, help manage compliance, and improve the rental process for both landlords and renters.
Deposit replacement schemes are another example of proptech tenancy services. These services allow landlords to mitigate risk and renters to reduce the upfront costs of letting a property by offering a subscription service (charged to tenants) that acts as an insurance policy for landlords in lieu of a traditional deposit. These services often offer greater financial protection against unpaid rent and breaches of the tenancy agreement than traditional deposit. The process of managing a subscription, negotiating damages, and recovering costs from renters at the end of the tenancy is all managed via a bespoke online portal.
Property management hardware
There are several proptech solutions that are making it easier and less time-consuming for agents and landlords to manage a property remotely, particularly when operating a short-let portfolio. For example,smart locks can be installed to allow visitors, renters, or contractors to access the property without the landlord or agent needing to physically attend the property. These are electronic locks that use bluetooth or wi-fi to interact with other devices such as smartphones, and allow a property to be accessed securely via a fob or an app.
If you aren’t keen on the idea of experimenting with smart locks (which is understandable, smart locks are safe and convenient but a relative unknown compared with a good old-fashioned lock and key), there are services that allow you to manage property access remotely without installing any new hardware. Smart key exchanges allow you to deposit keys in stores local to your property and manage their collection and return with code. You can then keep track of where your keys are using the service provider’s app.
The proptech ethos...
The image of the startup in the popular imagination is increasingly defined by tired cliché. There is more to the ongoing digital revolution than millennials playing ping pong in the office (or rather, the 'co-working space') and precocious young tech geniuses from Shoreditch or Silicon Valley.
Whether it’s proptech, fintech, edtech, femtech, or whatever-it-might-be-tech, most of the young enterprises thriving in these spaces are mission-driven companies founded by individuals to address common pain points in traditional industries with which they have personal experience. Though the precise objective obviously varies according to sector, in general disruptive tech startups aim to achieve the following: lower costs, greater transparency, improved efficiency, and a radically superior customer journey.
A powerful example of this can be found in the story of our own founder and CEO, Asaf Navot. In a recent Q&A, he shared the following anecdote to explain how he came up with the idea for Home Made:
As both a landlord and renter, my experience with traditional agents has been consistently negative and I saw an opportunity to disrupt the industry. Common issues include lack of honesty, terrible customer service, inefficiency, hidden charges, and extortionate fees. The eureka moment came during a 2am taxi ride. I was working 90-hour weeks at the time as a strategy consultant while also trying to let a property. I left the office at 2 am and in the taxi started reading emails received from the traditional agents. I was frustrated by the clearly misaligned incentives. Looking out the window, I noticed an absurd number of traditional agency offices on the high street and I wondered who was paying all their rent. Then I realised that it was people like me paying the rent through costly agency fees. At the same time, I had never visited a branch myself and didn’t know anybody who did. I arrived home and woke up my wife to discuss the idea and that was the beginning of Home Made.
Many proptech startups are united by a desire to disrupt the property industry and make it better through innovative technology, a deeper understanding of modern patterns of consumption, a commitment to transparency, and a renewed emphasis on customer experience. Proptech platforms empower customers by providing total visibility throughout the process of buying, selling, letting, or renting property while also delivering results far more quickly than the traditional industry at a fairer price.
This cannot be achieved through product alone - it also requires a sea change in the culture of the industry and the attitudes of those who work in it. Proptechs consciously define themselves against the throwaway culture of traditional agencies and see our obsession with customer experience as a key point of differentiation with established industry players.
Professional values such as acting in the client’s best interests, keeping your word, and always telling the truth are the product of company culture, not smart technology.
Though, full disclosure, a lot of us on the Home Made team are millennials and we do enjoy ping pong - but we understand that there is a time and place (and all previous requests for a table in the office have been denied).
Home Made as a proptech...
To us, being a proptech means using our in-house tech solutions as an enabling tool that allows our team to deliver exceptional service to renters and landlords in alignment with our values. We are making the process of renting and letting a property simple, transparent, and fair while keeping costs low and delivering an industry-leading customer journey. We do what we say, when we say and never charge additional fees for a service just because we can.
We offer a hybrid solution for hands-off landlords who want a hassle-free end-to-end service. With our proprietary technology we deliver similar cost savings and operational efficiency to DIY proptech platforms and software. We also add value with exceptional customer service, innovative marketing solutions, accompanied viewings, and fully compliant tenancy administration.
Using smart technology we can offer citywide coverage in London from one central location, allowing us to offer clients annual fee savings of 50-90% (compared with traditional agencies) while also letting properties faster by cross-selling to a far greater audience. Our bespoke online landlord portal lets you see how we’re taking care of your property at every stage of the marketing and administrative process in real time - offering unparalleled transparency in asset management. We want you to know how many enquiries we have received, how many viewings are booked, what feedback your property has received, and how far along we are with the ‘paperwork’ (which is, of course, all digital).
If you would like to know more about Home Made, proptech, or our offering, you can speak with us here. We would love to hear from you!