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What is PropTech?

11.8.21

What is PropTech?

Our most frequently asked question! What is PropTech? Let us explain…

 

This is a question we get asked a lot by candidates. Simple answer – PropTech is the digital transformation of the Real Estate industry.

 

Real Estate has been operating in such a mundane way for several years and PropTech is a movement that is driving a mentality change which has been required for a long time. PropTech covers all aspects of Real Estate including residential, commercial, retail, industrial, and hospitality just to name a few. Any platform that enables a Real Estate business to operate more efficiently and effectively by using its technology will consider themselves a PropTech business.

It streamlines the whole process, making it quicker and more efficient. If you look at the buying process of a Real Estate asset, it can take several weeks from reservation right through to the instruction of lawyers and this doesn’t even take into consideration the lengthy process of getting to a point of exchange or completion. If you digitalise that process and there is a platform in place that helps you view the property virtually, sign documents, and allow lawyers to be involved early on, it will speed up the entire process. We know too well that time is key and time is money, so businesses that have applied PropTech platforms over the last year or two have seen the benefit and value. The transactions happen a lot quicker and the processes are smoother.

 

Let’s take virtual tours for example. Agents have found (especially during COVID) that this offering has been crucial in order to keep their businesses afloat and current. The platforms that offer these services to agents and buyers have really benefitted from the pandemic. No doubt we will see the ‘virtual tour’ platforms develop over the coming years with more variations emerging in the market to enable agents, landlords and developers to sell properties more efficiently and ultimately quicker. Not everyone has the ability to take time out of work or time out of their hectic schedules to go and physically see a property anymore. If it’s all present on a virtual tour it streamlines the whole process.

 

Why are some people still sceptical about PropTech?

 

We talk to a lot of people who have worked in the traditional Real Estate market for most of their career and don’t fully understand its meaning and what effect it has on the market. Not every Real Estate business has had access to a PropTech platform. People’s mindset will change over a period of time as it evolves and if you look at USA, they are five steps ahead of the UK market. As time goes on and as more businesses implement PropTech platforms into their processes, we will begin to see more people transition from a traditional Real Estate role into one where PropTech is a driving force.

 

 

Why is it a good time to join the PropTech market?

 

It is still an emerging space, but you can see the impact that PropTech is having on the market. If we look at it from an investment perspective, in 2020 $23 billion was invested into PropTech Startups and in 2021 that is going to keep growing by circa 20%. That’s a huge amount of commitment and investment.

 

It’s a sector that is growing rapidly and if you fast forward five years it’s going to dominate the Real Estate world and how businesses operate in it. People will look back in hindsight and think ‘I should have got into it there and then’ but it comes down to specialist recruiters in this sector like LMRE to help you make the move into the sector now.

 

The Venture Capital businesses that solely focus on PropTech are raising capital of around $10 billion a quarter which is being invested into start-ups and this figure is only going to increase as time goes on. That money is being spent on the product as well as key hires for businesses as they grow.

 

 

Those that see the jump into PropTech as a risk, what do you say to them?

 

We don’t believe there is a risk. Let’s take FinTech as an example. FinTech companies have transformed the way in which the financial industry operates, and we can guarantee that PropTech will have the same impact, if not more, on the Real Estate world. Technology is driving every industry forward. It’s the world we live in now and if you’re going to buck the trend and not go with tech – you and your business WILL fall behind your competitors that are adapting to change.

 

Looking at it from a large corporate perspective, the likes of Savills, Knight Frank, JLL, CBRE are all adopting technology. They are leading businesses in Real Estate and have been for a number of years, so if they’re doing it why would smaller businesses not.

 

 

Are there any notable challenges for the PropTech industry?

 

At the moment, from a hiring perspective the challenge we come across often is that start-ups are requesting profiles of people who have that traditional Real Estate experience. Someone within a senior position will likely to have been at their company for c.10years and be operating in a traditional Real Estate way, so moving over to a PropTech can sometimes be heading into the unknown.

 

That is where LMRE fits into the process. We work hard to engage with candidates and advise on where the PropTech market is going and share examples of successful companies that are flourishing in the space as well as the benefits of stepping away from the traditional Real Estate role and into a PropTech one. Yes, there will be risks but there will also be some great rewards and in my opinion, the best is yet to come.

 

Another challenge from a recruitment perspective is when start-ups look for that sales individual who has both SaaS selling experience as well as Real Estate exposure.

 

That profile does exist in the US and those people are in high demand but in the UK there are very few individuals who have had the exposure to both. This is where we then have to advise our clients on the sacrifices that need to be made. We have placed a number of really talented individuals who have a brilliant sales background in Real Estate and having transitioned into a SaaS sales role have excelled in their new position. Vice-versa we have placed brilliant SaaS sales individuals with no Real Estate experience who again have taken the market by storm.

 

Can I work in a PropTech business with no Real Estate experience?

 

Absolutely. We have clients who strictly want people who haven’t had exposure to the Real Estate market but are keen to enter the space. If you have experience in a tech enabling business and have seen the benefits a platform can have on a business and are willing to adopt this into the Real Estate space, then absolutely there is room for you. We would love to hear from you.

 

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LMRE are specialist PropTech recruiters, if you need help growing your business or making any key hires please get in touch via the form below!

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