President and GM at Zego, a proptech company that modernizes resident experience management to boost retention, productivity, and NOI.
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Ninety-six percent of surveyed renters find online reviews influential when starting their apartment search, according to an Apartments.com survey. Many companies rely on spreadsheets for their budgeting needs, with 88% of them containing errors. What do all of these statistics mean? To effectively manage your real estate business, you need the proper tools.
Software has radically impacted all aspects of society. In the real estate space, in particular, there is an abundance of options when it comes to designing a property technology (“PropTech”) stack that best meets the needs of property owners, managers and residents.
We have come a long way since the days of logging everything manually through a paper trail, and there are so many ways technology has made running a real estate business much easier and more efficient. For example, innovative software solutions now enable smoother on-site maintenance processes, as you can seamlessly manage open maintenance requests and needs at the property level, log the insurance of vendors performing maintenance, predict future maintenance needs and provide residents with a user-friendly mobile app to submit, track and provide feedback on their requests every step of the way.
With the recent boom in PropTech solutions available, it can be challenging to figure out exactly what you need and which vendors are best suited to your business. But the first, and arguably most important, decision you need to make is how you choose to structure your PropTech stack. Here are three key considerations.
1. All-in-one. This approach is convenient for smaller companies that want to avoid the perceived challenges of managing multiple platforms. Using a single solution can be efficient and cost-effective, but those benefits come with tradeoffs, including more limited and rigid functionality — where there is breadth of offering versus depth with more limited flexibility — and additional expenses as you pay for what you don't need. While an all-in-one option isn't as simple as it would first appear, it's a viable option for smaller, growing multifamily real estate operations that need the simplicity.
2. Best-in-class. A best-in-class structure allows management companies of any size to apply the absolute best solution for each component of a tech stack. While it means managing multiple software solutions and vendors, each can be handpicked to best meet the unique needs of a portfolio. Plus, best-in-class PropTech stacks come with more frequent upgrades, significantly lower switching costs and more comprehensive solutions to each unique challenge your business faces.
3. Proprietary software. If a company simply can't find a suitable solution available in the industry, whether due to the overwhelming size of its portfolio or novel offerings, a PropTech stack built with proprietary software solutions is another option. By hiring your own team of developers to build your own tools, you can achieve endless customizations; however, the costs associated, including ongoing in-house technical support, often make this approach unviable for property owners and managers.
A proper PropTech stack not only helps multifamily properties operate more efficiently, but is also beneficial for prospective and current residents. Today's renters expect modern amenities, efficient workflows and the ability to manage their entire living experience from the palms of their hands.
Being able to quickly schedule a tour of a property, apply for a lease online and have use of a robust mobile app to handle all aspects of multifamily living — from moving-in to registering for renters' insurance, communicating with a landlord and more — are tools that property owners and managers need to have to stay competitive. Real estate companies that focus on building a well-rounded PropTech stack will have greater visibility into and control over business operations, make work easier for onsite staff, improve the resident experience and scale benefits across their portfolios.
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