For example, our facility management software Wowflow is a PropTech. But what does that actually mean? What is part of this term, and why has it been on everyone’s lips for some time now? Does it have anything to do with the real estate industry? We will address these and some other questions in this blog post.
Definition of PropTech
PropTech (or Proptech) is short for Property Technology, also known as Real Estate Technology (RE Tech). A PropTech is another word for real estate technology – and the term is therefore self-explanatory to a certain level. When we talk about PropTech, we are referring to the digital transformation of the real estate industry. Especially the companies that are driving this transformation – mostly start-ups. They optimize or invent real estate products or services. The latest information and communication technologies are used to make business processes or models more efficient or even to introduce new ones.
The term has been around since the mid-2010s. It includes both software and hardware solutions that are used in the real estate and construction industries. The focus is always on optimizing business models and workflows, which should subsequently lead to cost savings. Whether it is a completely new product or service, or whether an “old” solution is digitized, is irrelevant. The services and products offered by PropTechs cover the entire life cycle of a real estate project: from financing and realization through leasing or reselling of property.
This is precisely why Wowflow can also be clearly described as a PropTech: Our facility management software digitizes, automates and facilitates all the activities that arise during the operation of a building. We will tell you more about PropTechs role in the facility management and services sector later.
Differentiation between PropTech and other sectors
The digital transformation in the 21st century obviously does not omit other industries. Terms such as FinTech or HealthTech are buzzing around our heads just as much as PropTech. However, these individual branches can be clearly distinguished from one another.
FinTech
FinTech means Financial Technologies. A FinTech company deals with technical solutions for the financial sector. FinTechs are doing what PropTechs are doing with the real estate industry: digitizing and revolutionizing the financial sector with easy-to-standardize financial products and services.
ConTech
The term ConTech is somewhat closer to PropTech. It stands for Construction Technologies – in other words, technologies for the construction industry. Digital processes are also speeding up workflows and reducing construction and operating costs in this sector. ConTech companies increase efficiency in construction planning and building management.
HealthTech
It is perhaps a little easier to make a guess in this case: HealthTech refers to technologies for the healthcare sector. Its aim is to digitize and, to a certain extent, reform the healthcare market. HealthTechs develop new technologies that lead to improved medical care. The efficient analysis of data, for example, can belong to this category.
All of these terms have one thing in common: they aim to digitize a specific industry and thus make it more efficient. HealthTech and PropTech will generally have few overlaps, although ConTech and FinTech will certainly come into contact with PropTech companies from time to time – or vice versa.
Areas of PropTech application
As mentioned in the beginning, PropTech products and services cover the entire life cycle of a property. But where exactly is every technology used? We have looked in detail at the most important areas of application for PropTechs.
Planning and visualization real estate projects
There is already a comprehensive range of PropTechs, especially in the initial phases of property development. They digitize the planning and visualization of construction projects using computer-aided solutions. Numerous companies offer individual application thanks to CAD programs (computer-aided design), for example 3D visualizations of building plans.
One trend that has met a high level of approval is virtual reality simulations, which are being offered by more and more PropTechs. Thanks to VR glasses, both project developers and interested parties can enter the planned property in real time. In this way, misunderstandings can be cleared up during the planning and construction process.
On the other hand, potential buyers and tenants can view the property in detail at a very early stage. Rooms and materials can be experienced live and modified using the latest technologies to make them comparable. Virtual reality technologies therefore help both the seller and the buyer.
Real estate crowdinvesting
FinTechs meet PropTechs in the real estate crowdinvesting sector. Using specially designed platforms, many small investors come together to form a crowd and invest into large real estate projects. Investors receive their share and are able to invest minimal amounts, even 10 Euros, in a real estate project. The possibility of risk diversification is particularly attractive.
In Germany, project developers have been able to finance their properties with up to 6 million euros via crowdinvesting since 2019.
House and apartment brokerage
In the field of house and apartment brokerage, PropTechs are mostly represented by various brokerage software. While it was initially thought that these would eventually replace traditional brokers completely, a hybrid business model has developed instead. Especially in sales, it is difficult to completely ignore the human element.
However, customer acquisition and real estate analysis can certainly be digitized. Various portals have a clear advantage over traditional real estate agencies, particularly when it comes to acquisition, thanks to their easy access and informational transparency. Nowadays, artificial intelligence (AI) is often used to improve the evaluation of real estate.
The business model looks slightly different, depending on the PropTech used in the house and apartment brokerage sector. Some of the brokers are permanently employed by the platform, while others act as intermediaries between buyers and brokers.
Digital locking systems are a technology which can make life easier in the world of home and apartment brokerage. Together with security specialist ESSECCA, Wowflow has developed a solution that allows homeowners to check who has been in their home and when.
By installing electronic cylinders and by using the Wowflow app, it is always possible to see which worker or subcontractor is currently in the apartment. Thus, the annoying handing over of keys is completely eliminated.
Operation of the property
Even when it comes to operating a property, there are numerous solutions that promise to optimise the processes. Two areas that particularly benefit from this are technological support for property management and facility management. Property management companies mediate between landlords (or owners) and tenants. This involves a lot of communication and sometimes even mediation.
In these cases, a relevant platform – such as casavi – can provide a place for transparent communication. Annoying e-mails or phone calls – which in the worst case cannot be tracked – are omitted to make way for automated solutions.
It is very similar to the facility management industry: communication between team members and between different service providers, can be optimized. In addition, the right real estate software takes over the filing and storage of data, the logging of orders and the management of equipment and facilities. But more on this in the last section of this blog post.
Smart home technologies
Most of you are probably familiar with the term smart home. These are intelligent and networked solutions for private households. A well-known example of this is Amazon’s “Alexa”, which plays your favourite song on demand or searches the Internet for the information you need.
But smart homes don’t stop there. There are now many other solutions that are not only interesting for property residents, but also for real estate companies. For example, automatic control of electricity and heating, as well as digital door locks in private homes. Smart locks can be used to open the door remotely for other people, such as the post office or a cleaner.
Smart electricity meters are also an interesting innovation – especially in current times. They identify power guzzlers and can therefore significantly reduce electricity consumption.
PropTechs use scenarios
The fields of application listed above already contain many valuable usage scenarios. Nevertheless, we would once again like to clearly summarize the general benefits of PropTechs.
Both real estate companies and building users benefit from the digitalization of the real estate industry. From the company perspective, it is particularly important to automate and simplify processes that used to be analogue.
Above all, electronic processing can ensure the efficiency of daily work and thus the faster and targeted business processes handling. Intelligent technologies eliminate problems that are partly caused by “human error”. However, this does not necessarily mean that qualified employees are becoming obsolete. On the contrary, people who know how to use the new technologies are still needed.
PropTechs in facility management
As already mentioned, we can count facility management software (such as Wowflow) as a PropTech that facilitates correct property operation. You can digitize communication between the individual employees of your facility management company. Regular meetings, daily phone calls and countless e-mails are no longer necessary. In addition, most of this software takes over the filing and storage of documents and image material.
This is particularly important in the facility services sector – and especially in building cleaning. Before/after photos of the property being cleaned can be uploaded to the app quickly and easily. This creates crucial evidence for the customer. It is also possible to have professional reports created by the facility management software.
In the FM sector in particular, a wide variety of equipment and systems are used on a daily basis. Good software also offers a solution for this. In Wowflow, for example, all systems and equipment can be uploaded to the app – incl. photo material, descriptions, use instructions and maintenance interval. This way, processes are digitized and automated. The time savings are enormous.
Key management can also be part of facility management software: by automating the handover and return of keys and keeping a digital catalogue, key management is much more efficient than if it were carried out in analogue form.
As you can see: The areas of application and benefits of PropTechs are almost endless.
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