“Any sufficiently advanced technology is indistinguishable from magic.” Arthur C. Clarke.
Or, as Leigh Brackett put it decades earlier,
” Witchcraft to the ignorant … simple science to the learned.”
Is PropTech witchcraft or magic, or is it merely science and technology advancing?
Technology is often intangible and is constantly evolving at an incredible pace, so it is no wonder that as these two brilliant, yet completely contrasting sectors, come together there are some big questions to be asked. It will change real estate and however you react to it, you must understand what is going on.
This book will help you to do just that.
PropTech, is a huge subject area that is going to change property investment, development and indeed our wider lives in myriad ways. There will certainly be some bumps along the way but, PropTech has the potential to create huge opportunity for tenants, homeowners and investors alike.
Chapter One – Construction Technology (ConTech)
The reasons behind the massive gap between demand and supply are complex, and have much to do with the political and economic disincentives that have made council house building undesirable for local government. Construction also has a reputation for being an industry that is slow to adapt to change. However, Construction Technology, or ConTech, is making great strides in creating new materials, tools and techniques that look set to transform the way we build.
Can ConTech change the face of construction and help make building better quality homes faster, cheaper and with fewer skilled trades a reality? This chapter will help us to find out what’s on the horizon for the construction sector and how recent technological advances will affect our lives, both as homeowners and investors.
Personally speaking, I see some overlap in some of these technologies, policies and trends. We need more homes and so factory-built housing or on-site 3D printing just seems to make sense to help with that. We are losing skills in the construction industry, so technological advancements can help to plug the gap. We also need to fix the increasing energy crisis that is bubbling away, so the emergence of sustainable energy alternatives, designed in a Passive House and built using a timber frame and panel-based units just seems to add up.
Chapter Two - Smart Homes & The Internet of Things
My guest on The Property Voice Podcast, Andy Cox from ThroughMyTV.com made this point very well, I think. There is the DIY market, with its more limited functionality and capability devices and then there is the more professional market, where expert technicians write code and programs that interface with various devices to make the whole thing automated and discreet. The arrival of APIs and other technologies that help different devices and protocols talk to one another is a bit of a link between the two, although you would probably need to more than simply drag and drop to get them working together effectively…unless you happen to be a fourteen-year-old that is!
In the near-future we are going to see more connected devices using the Internet of Things, more touch control, which will move increasingly to voice-controlled devices. External connectivity and internal cabling infrastructure will inevitably be a BIG part of people’s housing decisions. So, consider the Broadband and Mobile Internet coverage in your properties, hard-wired cable zones, USB charging points and that superfast Wi-Fi signals are boosted all around the property if you want to at least get to first base with these changes. The rest can then be added on top more easily and cost-effectively if these fundamentals are in place.
On the downside, cybersecurity is a risk area and so take careful steps in the solution that you choose to adopt with closed or hard-wired solutions and adequate firewalls and other security measures being applied wherever possible. Equally, bandwidth congestion and signal interference could limit some of the potential too, so again hard-wired systems might be the best interim step for now.
Chapter 3 - Big Data, Artificial Intelligence, Tools and Apps
It’s hard work being a landlord or property investor, as I’m sure many readers will agree. I’m always really interested to find out how technology can help landlords and investors to run their portfolios more easily and effectively. However, I also think we need to understand how and why these tools have come about and what technology promises to bring us in the future.
Big Data, AI, chatbots - and the systems, apps and tools they support – are about increasing productivity and reducing cost, but also improving service. Machines speaking our language, communicating when and how it best suits us, with the right information to solve a problem, have been promised. The prospect of man and machine working together in harmony this way sounds like a dream come true….let’s hope it does become a reality!
Chapter Four – Audiovisual Advances
We’ve come a long way from solely printed estate agents’ particulars when it comes to marketing homes, both new and existing. You may have heard of Augmented Reality and Virtual Reality and there’s also been a lot of recent media coverage about drones and their many uses. How can these technologies be harnessed in the property sector? How are they relevant to us as property investors?
VR & AR span a wide range of use applications, such as planning and design, for example, to create 3D imagery. Inspections and viewings are another area that the tech is well-suited to, such as enabling an immersive experience remotely. Finally using VR/AR in marketing and sales to reach more people with less cost. Then, we can add in drones to help with maintenance and testing and to access high or remote areas more easily.
Chapter Five - Sales, Marketing and the Sharing Economy
The Sharing Economy has burst into our consciousness over the past few years, with big names like AirBnB and Uber becoming a mainstream part of everyday life. Even the government’s Office For National Statistics has got on board, announcing plans to measure the Sharing Economy in 2017, because of its significant economic impact. So how has this happened? What are the reasons behind Sharing Economy businesses becoming so popular? And how does it affect us as landlords and property investors?
I did come across the odd statistic that stood out and even surprised me a little. For example, the largest segments of the population that seem to use the Sharing Economy. The biggest users are Millennials, those with medium-to-high incomes, or families with younger children at home. It’s not necessarily that people fall into ALL three of these segments, but perhaps just one or two. That’s not to say that other groups are excluded, but it is where the greatest concentration of usage lies currently. Who are our target tenants and homebuyers? Are they likely to fall into one or more of these groups of younger, more affluent singles, couples and young families? If so, then you might want to keep tabs on what changes are coming about in the Sharing & Digital Economy, I would suggest. The landscape is changing and it’s changing very rapidly. So, before we know it, we might start to see new business models, new services, new competitors, new markets, new channels and whole new industries springing up around us and on our smartphones- as we have already!
Chapter Six – Financial Technology (FinTech)
How are advances in Financial Technology helping us as landlords and property investors, both now and for the future? In this chapter, we’ll dive into the world of FinTech and look at how insurance, lending and financial advice are being disrupted by technology.
My wrap up and summary of FinTech as it relates to us as property investors. When I started researching this topic, I perhaps saw FinTech as one of the most prolific and fast-changing segments of PropTech and much of that view still remains. There could be some big changes that we could start to see from other technologies, such as the Internet of Things and Blockchain, but perhaps over the second half of the next decade rather than the first. I for one am expecting to see more high-profile advances in FinTech in the next five years ahead that’s for sure.
Chapter Seven - Blockchain Technology & Cryptocurrency
You might find this surprising. Certainly, cryptocurrency or rather cryptocurrencies, which are traded on the Blockchain, provoke strong opinions, with a reputation for volatility and early links to criminality and the dark web. However, without a doubt, investing using cryptocurrencies is becoming slowly more mainstream and some of the massive highs seen in Bitcoin valuation have certainly attracted attention, both from the media and investors alike.
I would not be surprised if it suddenly took off either. If we look at how the internet came about, it was created as a network to help research institutions and universities to communicate more easily. It was email that was the ‘killer app’ that drove adoption by the masses. However, it still took decades for the internet as we know it to come about, having thoroughly disrupted the media and advertising sectors in the process. Blockchain has the potential to similarly disrupt the finance and property sectors, and perhaps Bitcoin is the ‘killer app’ that has brought attention to the system behind it and the potential that it offers.
Chapter Eight – Learning and Development (EdTech)
In this chapter, we’ll take a look at how Education Technology, or EdTech is affecting education in the property sector and I’ll signpost some of the best ways to learn more about property, be they on- or off-line.
The EdTech sector is one of the fastest growing tech sectors in the country and according to research from London & Partners, it’s worth £45bn globally and could reach a phenomenal £129bn by 2020. Property training has been a fast-growing sector within EdTech too. There are lots of resources available, including many that genuinely fall within the EdTech definition. However, with such variety and choice can also come both overwhelm and 'analysis paralysis' too, so that’s why I suggest starting with your purpose and goals and taking some time to cover the fundamentals before diving right in. The other element of the wealth-creation industry is that it attracts people with money and also people who are looking to get hold of money too, so just be careful with where you put your money and also your trust, as there are plenty of sharks circling waiting for fresh meat to sink their teeth into!
Chapter Nine – The Big Picture including Smart Cities, Globalisation & Megatrends
There are some global megatrends that will have a big impact on how we live and work in the future. This, in turn, will change the way we, as property investors, developers and landlords, operate. It’s worth digging a little deeper into these shifts to see what challenges and opportunities they will bring our way.
Megatrends drive the future of property and PropTech. The shift to urbanisation, population growth, new mobility, energy efficiency, escalating health needs and technological advancement all feature as having an influence on our future property and housing needs.
Smart Homes and Smart Cities need to be more than just tech toys. My interviewee Greg Lindsay stressed that smart homes need to be more than an Alexa-enabled facility to be truly useful, such as being a part of micro-power hubs and connected to sustainable transport hubs. He also talked about the dark side of smart homes, such as the threat of hacking and data theft, which we need to keep an eye on.
I am quite optimistic about technological advances in the most part, and about PropTech in particular, as you may have detected. I believe our lives will ultimately get easier and not harder and as property investors, developers and landlords, we will increasingly have tools, systems, apps and other technological advances that will improve our productivity, increase our profitability and help with both our property or asset management and our customer service too.