Build to Rent

Responding to Proptech

By Fay Chester on Dec 4, 2017 in Technology

LONDON – Technology has changed all our lives so fundamentally in recent years that it is sometimes difficult to look back to an era when things were done differently. Today’s normality was, just a short time ago, unthinkable.

Banking is a good example. Today, we take it for granted that we can access our accounts at any time and transfer money and pay bills quickly and cheaply. The chequebook is still available for those who need it, but it won’t be long before they too are consigned to history.

Then take taxis. While in London at least, using a cab was once the preserve of those with substantial salaries – or travelling at somebody else’s expense – now the rise of Uber and others means that getting a ride home is a real option for many people.

Property has, of course, been slow to embrace the benefits that digital technology can bring – one estimate is that the industry is around 20 years behind financial services – but that is starting to change and at pace. Just a few years ago, if the property press mentioned technology at all, it was to reference the influence of the likes of Rightmove or Zoopla. Today the phenomenon has its own name: proptech.

A lot of attention has been paid to how proptech is disrupting the industry, most notably through big data potentially making the role played by many agents redundant. That is obviously a cause for concern and the introduction of new ways of working will obviously have to be done with care and compassion. But proptech also has the potential to bring huge benefits to both property companies and their consumers – and without the need for anyone to lose their jobs. In no sector is this truer than in build-to-rent (BTR).

Engendering loyalty

At Yardi, we are utilising the latest technology to support developers and operators in the BTR market, not to mention their own customer base. The benefits of technology, through every stage of the BTR lifecycle, extend from using data to determine the best developments to match community and cultural needs, through to marketing and branding, attracting prospects and turning them into residents ready to sign on the dotted line.

It doesn’t stop there. Technology is now playing a huge role in helping the industry deliver class-leading services that engender loyalty.

At the beginning of the BTR lifecycle, proptech can help developers and investors really understand what sort of scheme is going to be most appropriate to meet the needs of local demographics and as such not only be financially successful, but be in tune with local cultural needs. For instance, in a location with a young and wealthy demographic, it might at first seem advantageous to include a gym and a cinema room in a development. But what if the target market already has access to such facilities and is largely happy with the service they provide. In such circumstances, money spent on providing facilities that will be underused and unappreciated will be largely wasted: nobody is going to be willing to pay a premium in rent for things they already have.

In contrast, an analysis of an area might well identify unfulfilled desires, such as a lack of local cinemas or indeed gyms. Moving away from a 20-something demographic, it might also be the case that an area lacks sufficient-quality nursery care. All these things can now be identified through serious analysis of social media as well as big data, among other sources of information.

Building an online profile

Once a development has secured planning permission and is under construction, the mind naturally turns to who is going to live in the resulting building. Again, a proptech solution here can help. Building a company’s – and more realistically at the moment a development’s – profile online is essential. Property marketing is getting more advanced by the day and potential residents now expect to be able to access the information they need immediately and be able to make decisions quickly. Quite apart from getting residents through the door in the first place, proptech can also help nurture loyalty, retain residents and drive satisfaction.

In part, that is down to the improved property management systems on offer. For instance, if a fault occurs, in the heating system say, it can now be instantly reported digitally, the building’s management team immediately alerted and a contractor called out if necessary.

Web-based solutions can also allow property management teams to add value to the service they provide by being instantly contactable in other ways. For schemes that operate a concierge service, it is perfectly possible for a resident to inform a member of staff that they are expecting a delivery and for that delivery to be securely stored until their return. This dovetails neatly with the increasingly intelligent way in which delivery companies such as Amazon inform customers about the likely time of their deliveries.

However, technology can also enable residents to make better use of their homes in far more social and creative ways. Web-based communication means that social events in a housing block can be shared far more effectively than via a print-based community board in an entrance hall or stairwell, thereby encouraging and developing a sense of community.

These are the sorts of solutions that are already available, but proptech has the potential to go much, much further. For instance, virtual reality has the potential to revolutionise property marketing. In the US, there is already a company that is offering potential tenants the opportunity to see what their new homes might look like with their own preferred colour schemes and with their own furniture. It can’t be long before such an idea lands on these shores.

Elsewhere, we are seeing keyless entry systems introduced in hotels and smartphones are already capable of providing access. Amazon also recently launched a smart key concept for smart homes, which is something to watch as it could enable one- time access for deliveries to be made, among other potential benefits. There are things that have huge potential in the BTR space.

Then there is the potential for technology to make huge savings in terms of minimising energy costs, both for individual homeowners and for the landlords of major portfolios. Really, the possibilities are endless. The advent of proptech may be disruptive, but in the BTR sector it has the potential to be transformative.