It’s an open secret that Real Estate, the World’s Largest Asset Class, has also been among the slowest industries to adopt New Technologies. However, PropTech is now invading the Real Estate Industry.
Over the past decade, more than $30 Billion has been invested in PropTech, a New Generation of Startups at the intersection of Property and Technology
In our previous article, we looked at what exactly is PropTech and what paradigm shifts have PropTech Companies already brought into the industry, and what can be expected in the year 2022.
Now let’s discuss a much deeper abstract, which is if PropTech can replace the Property Management Professionals in the future.
Is PropTech More of a Threat or an Opportunity for Property Management Professionals?
If you remember the early years of the Internet, you may recall that people were concerned about how the World Wide Web would disrupt the Property Management Industry. Of course, the Internet is now considered an essential tool for Property Management Professionals. The same will almost certainly be said about PropTech as of now!
Some Property Managers are finding it hard to accept how quickly PropTech Companies are disrupting the industry and are unwilling to keep up with it. Others see it as an opportunity to learn, grow and contribute to the many benefits it has to offer making their lives and jobs simpler.
The ultimate goal of PropTech isn't necessarily to replace Property Management Professionals. Most companies want to use Technology to Innovate the Real Estate Industry
The Threats of PropTech for Property Management Professionals
In a recent survey conducted by the National Association of Realtors, 24% of Property Management Agents expressed concern that the rise of PropTech would leave them outdated. This fear is especially common among Agents over the age of 40, who are 55% more likely to be concerned than younger Property Management Agents.
For decades, many people believed that the Internet would eventually replace Property Management Agents. And some people still continue to do so. They believe that Agents are unnecessary when Buyers and Sellers can find each other on an Online Marketplace.
If PropTech has taught us anything, it's how important Property Management Agents are, not just being Middlemen, but also as Advocates
Investors can look up and do their own property search, but the information they’ll collect would be nothing as compared to what a Property Manager can provide them. Investors require the assistance of a Property Management Professional to provide guidance and direction on:
- Determine a Fair Market Value for the property in question, and negotiate a price without involving the person investing;
- Explain the Paperwork, advise them during the Inspection/Appraisals and;
- Most importantly Managing the Property Investment Assets via Timely Repairs and Management (R&M) processes in place for their key clients.
In fact, there are more Real Estate Professionals on the market today than ever before. Here are a few things you can do for your clients that PropTech cannot;
- Use human intuition to distinguish between what your clients require and what they think they want.
- Research and find out the fair market value of a property. Artificial Intelligence is quickly developing on this, it will be years before this information would be as accurate as the one provided by a well-versed agent.
- Act as a negotiator and a management agent on behalf of your client.
- Show empathy and provide emotional support to clients who are going through a transition. Buying and selling properties can be an emotional experience that benefits from a personal touch.
So PropTech isn’t really something to be scared of. The main issue lies at the end of iBuyers who try to take the agents out of the equation. This creates a threat for Property Management Agents because many sellers may be willing to accept a lower price in order to ensure a quick and secure sale.
It is estimated that Six out of Ten Property Owners would be willing to sell their Properties at a slightly Lower Price in order to sell them Faster
For many sellers, the lower profit is financially worthwhile because they may not have the funds to get the property in the market-ready condition in order to maximise their profits anyway. And the sellers appear to be content with the tradeoff. A staggering 8/10 people home sellers transitioning with an iBuyer said it was a positive experience.
When the market slows, Property Management Agents must try to convince the Property Owners that it is worthwhile to wait to find a buyer on the open market. Comparing income and expense forecasts for iBuyers as well as the open market to show sellers that choosing iBuyers can be a weak deal.
The Opportunities of PropTech for Property Management Professionals
The majority of PropTech is focused on Developing Tools for Property Management Agents to use. The goal is not to replace them, but to make their Jobs Efficient and Customer-Focused
PropTech Companies like i4T Global are developing these tools to benefit when there are more agents selling properties.
Take drones as an example. Drone Technology is being excessively used by Property Management Agents. Aerial shots, which were once reserved for Multi-Million Dollar Properties, are now accessible to virtually any property. Today, you can see a number of Tech Companies that offer Real Estate Drone Photography and Services.
And Social Media Companies, for example, had no intention of specifically helping Property Management Agents, but many of today’s agents are seeing a solid ROI from their money spent on Social Media Ad Campaigns. In fact, agents can generate leads on Social Media for free.
Property Management Agents can also benefit from the services of website hosts and professional website design theme creators. A decade ago, they had to spend money in order to hire professional website builders. Today, however, there are numerous tools available to assist Property Management Agents in developing their own professional websites at a fraction of the cost. Websites add instant credibility for businesses, and makes it easier for buyers and sellers to find such agents on platforms like Google.
PropTech has Empowered 75% of Property Management Agents to better serve their clients. Virtual Showings, Augmented Reality Staging, and Virtual Brokerages have been used by agents for years
The COVID-19 Pandemic forced agents who were on the fence about PropTech to embrace it quickly. PropTech has made 81% of agents' jobs easier, according to a survey by NAAR
The truth is that PropTech Companies are looking into every aspect of the Property Management Industry, and some of them don’t mind taking on agents’ business. However, many PropTech Innovations are supportive rather than competitive. There are hundreds of PropTech Companies, but only a few are attempting to reinvent the industry as a whole in a way that eliminates the need for Property Management Professionals.
Property Management Professionals who embrace Technology, not fight it, will survive and thrive in the coming crunch
How Can Property Management Professionals Embrace PropTech?
1. Keep an eye on the Latest Innovations
2. Make Use of PropTech Tools
3. Build upon Client-Centred PropTech
Focus on PropTech tools such as i4T Maintenance that enhance client services and make the property asset management processes easier for clients. This will help to mitigate the benefits of PropTech companies looking to replace Property Management Professionals.
4. Network with other PropTech Adopters.
5. Real-Time Communication
Property Management Agent is most often the Central Point of Contact for Property Occupants, Field Service Suppliers, and Stakeholders, and therefore, Real-Time Communication is a Business Asset with a Dollar Value
6. Adding the Human Element
Real Estate is not just number crunching. It involves emotions because that’s what homes are built on. Algorithms and Online Tools can help in making buying and selling decisions, but maintenance needs the human touch for it to work effectively.
7. Transparent Compliance Oversight
Future Outlook
Conclusion
A buyer's experience of selling a property is very personal, and the likelihood of PropTech completely replacing Property Management Professionals altogether is relatively low
Being a Property Management Agent and believing that PropTech will eliminate your job is completely baseless
Key Takeaways
- More than $30 Billion has been invested in PropTech as in the new generation of Property and Technology startups over the last 10 years and it is booming right now!
- PropTech will not be replacing Property Management Professionals, Instead, it will use Technology to Innovate and revolutionize the Real Estate Industry!
- PropTech has shown us how important Property Management Agents are!
- With PropTech, Property Management Agents have been performing really well with their clients. presenting with Virtual Showings, Augmented Reality Staging, Virtual Brokerages, etc.
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With our cutting-edge technology and in-depth knowledge of how the Field Service Management sector operates, the i4TGlobal Team loves to share industry insights to help streamline your business processes and generate new leads. We are driven by innovation and are passionate about delivering solutions that are transparent, compliant, efficient and safe for all stakeholders and across all touch points.
