From cloud-based property management software and CRM tools to data analytics providers like CoreLogic and Attom Data Solutions, property technology has reshaped the real estate market. After all, thanks to technology and innovation, we can now tour homes virtually, research faraway markets online, electronically sign documents, and more.
Property technology, or proptech, is one of the hottest tech industries at the moment. Yet, only 58 percent of real estate companies have an established digital strategy, according to a KPMG survey. Unfortunately, too many real estate investors have been missing out on the opportunities and advantages new technologies bring.
What’s needed for more effective use of proptech is the right approach. In this article, we’ll discuss how to develop a technology stack that works with your current state, resources, and goals. Going forward, we hope this can serve as a reference guide for how to leverage technology as a real estate investor.
Adopt technologies to suit your needs and resources
A recent survey published by the National Association of Realtors shows that 48 percent of real estate firms view keeping pace with technology as a key challenge.
It’s not that real estate investors remain stuck in traditional ways of doing business. Data from Statista highlights that opinions on real estate technology are overwhelmingly positive. Many professionals believe technology can be leveraged to reduce construction costs, improve operational efficiency, enhance investment decision-making, and structure better deals.
Therefore, real estate entrepreneurs see the value of investing in technologies. But they may require guidance and direction to use new platforms fully and effectively.
This is why you must assess where you are, as well as consider your resources and capabilities when you begin developing your technology stack.
For instance, if you do fix-and-flip investments with a small, hard-working team, you may need to move fast but have a tight budget. You certainly want to save on renovations. And you may not have the time or resources to perform first-hand research. Considering your needs and resources, you could decide to utilize the following technologies:
- MLS to discover undervalued homes, foreclosures, preforeclosures, short sales, and more
- Google Workplace to create, share, and collaborate on documents and research with your team
- Wrike for managing projects and tracking progress on everything from deals to renovations
- Contactually to simplify and automate communication with your real estate network
In addition, you would want a fast-moving capital partner, one that can provide funding quickly so you can close. Lenders in the real estate space have begun providing this capability. It’s something we at DLP Lending have offered our clients through our Preferred Line of Credit, which allows you to access up to $10 million quickly.
The point is this: First think about your current state, needs, capabilities, and resources. Based on that reflection, begin deciding what tools to use.
Align technologies with your present and long-term goals
Whether you’re a large homebuilder or property manager, or a solo fix-and-flipper, you have unique present and long-term goals. When you create and/or use technologies for your business, those tools should align with your goals.
For growing real estate investors looking to scale, your technologies should probably include a mix of free options, freemium tools, established platforms, and some enterprise-level options.
A lot depends on what your plans are. Let’s say you own rental properties in your city but wish to expand regionally. A solution like AppFolio, which enables you to manage properties remotely, could make growing your market easier.
For medium to large players or well-funded companies with ambitious growth plans, your tech stack should probably include even more enterprise-level options, as well as custom-developed solutions to meet your needs.
For example, at DLP Real Estate Capital, we have more than $1 billion of assets under management and are committed to strong, sustainable growth. To continue that acceleration, we use the following technologies:
- Free tools such as Google Docs. We leverage the “founder’s mentality” and pay for what we need. If a free option exists, great!
- Freemium platforms like Zoom to host webinars, conferences, client meetings, and more (which has been especially useful during the COVID-19 pandemic).
- Enterprise-level options such as Pardot Marketing Automation and Salesforce. This sort of firepower helps differentiate us.
- Custom-built solutions, including our Elite Execution System, that helps us achieve supercharged scaling.
As you can see, the technologies we use serve a specific purpose and propel us towards our goals. From reducing costs and streamlining operations to improving decision-making and client management, these proptech tools help DLP Real Estate Capital grow quickly, sustainably, and consistently.
When you decide on a tech stack, use a similar approach. Don’t just use new tech for the sake of it. It’s easy to get caught up in the hype. But if you can’t define how certain software and tools help you achieve your real estate goals, then you may want to reconsider.
To summarize, your tech stack should support your growth goals by adding efficiencies, speed, decision-making, and more. Your team should quickly see its benefit and the tools should be embedded into your organization’s processes and culture.
Avoid pitfalls as you use technology to scale
The key to scaling isn’t just about using good technology. It’s about infusing thenm into your processes so that you strengthen the most vital pillars of your business, which are your:
- Strategy: This involves the what, where, and when. Ensure technologies help you make disciplined decisions that focus on your most important goals.
- People: Attract rockstar employees with a clear set of values and culture. Utilize technologies that empower your team to solve challenges quickly and skyrocket your growth.
- Operations: Good execution comes with the right strategy and the right people. Employ technology to help bring your forward strategy to life.
- Acceleration: Once you have the strategy, people, and operations, it’s time to scale. Leverage technology and take disciplined action to kick your business into high gear.
Technology should be used to support these pillars of your business and build an elite organization. By focusing on those pillars, you can propel your business’ revenue and scale to the next level.
Along the way, you should be aware of the common pitfalls of real estate investing. Because even with the best technology, you can still make mistakes, such as not doing your due diligence on deals, being inconsistent in your operations, having the wrong people in certain positions, and not focusing on where you excel. This is why technology alone won’t get you to the next level. You need the right culture and system.
Finally, you must ensure you’re always prepared from a capital standpoint. Because scaling in real estate requires not only moving efficiently (which technology helps with), but also that you have the funds on hand.
For instance, none of us could’ve predicted what would happen in 2020, and we saw too many real estate investors struggle during the early stages of the COVID-19 pandemic, especially with accessing capital. This caused lots of folks to lose out on good deals, sell assets at a loss, and even pause or shut down their operations.
How does your tech stack support your real estate company’s success?
Yes, it’s nice to have fancy tools and software. It’s exciting that data is driving a transformation in all aspects of real estate, the use of virtual reality is becoming widespread, and tech has begun streamlining the regulatory environment. All real estate entrepreneurs should stay updated on the latest technology trends and make use of tools that improve efficiency and speed.
Just remember: Success with proptech hinges on ensuring your tech stack supports your company’s needs and goals. With clear expectations on what to expect out of certain tools, your team has clarity on how to best leverage them. With the right culture and system in place, you’re in a position to benefit greatly from all these new property technologies. And there will be no limit on what you can achieve.
Perhaps then, it’s best to end this with another question: How will your tech stack enable your real estate company to speed ahead of the competition?