Grant Chaplin, managing director, Grosvenor Systems looks at how tech is disrupting tenancy management.
In an economic environment of rising interest rates and a cost-of-living squeeze on consumer bank balances, companies everywhere have to find creative ways to innovate and achieve more with less.
The smart application of proptech is one way to do precisely this. The real estate industry is full of inefficiencies, making it ripe for disruption by innovative technology.
For example, digitalising tenant management can reduce costs for landlords and streamline communications between management teams and tenants. This can greatly improve the tenant experience. Properties can be marketed entirely online, tenants can take initial payments and reserve properties from their phones, contracts can be e-signed and sent without printing, and the ongoing management and accounting requirements can all be done through one central portal. Monthly rent invoices can also be generated and sent automatically each month, eliminating time spent performing administrative tasks, allowing staff members to spend more time on work that provides value.
Open banking opens doors
More recently, the potential for proptech platforms to integrate with open banking is being realised. The advent of open banking means that, tenants should be able to manage their payments safely and securely in a one-stop-shop. This also provides more accurate, secure and easy-to-access information at landlords’ fingertips. Because financial data is automatically loaded into the platform, substantial time is saved by eliminating the need for property managers to input it manually and removes the risk of someone entering the data incorrectly. This data can be used to create dashboards of analytics for trends across a range of metrics from cashflows to rent arrears which update in real-time. Reducing bureaucracy is a win-win for both landlords and tenants.
A defence against looming cyberthreats
In addition, storing everything digitally on a proptech platform can also be an effective way to improve information security by providing off-site hosting. Documents can be safely stored centrally on a secure platform rather than as physical copies which are easily lost or on unsecured on-site systems. As cyberthreats grow in sophistication each year, it is becoming increasingly critical to secure tenant’s personal data along with commercially sensitive business information.
Different platforms have varying security protocols but many use features like two-factor authentication to ensure that even if a password is stolen, customer data remains uncompromised by requiring users to input a code sent to their phone or email when logging in or even providing biometric data.
Using tech for the environment
There are also environmental benefits. On-site servers can emit a whopping 975kg CO2e per year on average, which is almost a metric tonne of carbon. Given the severity and urgency of the climate emergency, it is beholden on all of us to find ways to cut our emissions. Switching to a hosting service run on renewables is a relatively easy way to drastically cut server emissions and it can even save money compared to running server infrastructure on-site making it a no-brainer.
A technological dawn for property
The property industry has been slow to embrace the disruptive power of technology, but the dawn has come, and it is already leading to a dramatic shift. Astute property businesses are exploring novel applications for proptech to automate their processes as much as possible, freeing up their staff from their administrative burdens to focus their efforts on work that provides a more valuable return.
The result is a vastly improved customer experience across the full cycle for tenants. This is important since, as rental prices remain elevated due to the squeeze in housing supply and inflation, property managers will find an intensifying competition to provide improved levels of service to justify higher charges.
Leaders who cling to their old processes are at serious risk of being left behind as they struggle to keep up with more productive firms and attracting tenants who have become accustomed to a more seamless rental experience. Pioneers who innovate are primed to reap the rewards of this transition.