Digital Transformation in the Real Estate Industry
Technologies play an increasingly important role in buying, renting, and managing properties, and digital transformation in real estate today is an absolute necessity. In a highly competitive industry, companies that quickly adopt new technologies can provide superior customer experience and gain an advantage over competitors. Despite this, many real estate businesses are still relying on legacy systems or refuse to automate operations. Navigating digital transformation can be difficult, but in this guide, we will tell you about its advantages, the main examples of how proptech solutions can change your business, and how to overcome challenges that may arise during this complex process.
About real estate digital transformation
Digital transformation is a process of adopting technologies across various aspects of the organization. During this process, real estate companies start using proptech solutions and other digital tools to improve business operations and provide better customer service. Digital transformation in real estate affects not only real estate agents, brokers, and property managers but also potential buyers, sellers, tenants, and investors. During the global pandemic, many customers started using online platforms and real estate apps for various tasks, and the widespread adoption of cloud-based software made feature-rich digital solutions more accessible even for small and medium businesses.
Now, let’s talk about the main reasons for starting a real estate business’ digital transformation and what benefits it brings.
Real estate digitalization: reasons and benefits
The number of real estate companies that use software solutions in their day-to-day operations grows constantly. So, why do so many industry professionals start digitalization of their business despite potential challenges and setbacks?
- Customer experience improvement. By leveraging artificial intelligence and machine learning algorithms, real estate companies can provide more personalized customer experience through digital platforms. Customer behavior analysis and information about personal preferences is instrumental for offering tailored recommendations and personalized marketing messages. Mobile and web applications, virtual tours, 27/7 AI-powered support, and other advanced features offer clients more flexibility and convenience.
- Revenue growth. Digital transformation in the real estate sector allows businesses to reduce costs and grow revenue. Modern real estate software tools enable companies to generate more leads and increase conversion rates with personalized services and offerings and CRM systems, save costs by allocating resources more efficiently, and reach and serve more clients without the need to hire more real estate professionals.
- Business operations’ optimization. Digital solutions allow organizations to streamline and automate various tasks, making employees available for tasks that require human input and reducing the probability of human error. Advanced data analytics tools, often powered by AI and ML technologies, enable industry professionals to make more informed decisions on pricing strategies, investments, and more aspects of the business.
- Enhanced security and transparency. Real estate agencies and property management companies deal with massive amounts of sensitive information on a daily basis. Digital solutions allow organizations to ensure secure storage and management of financial records, property documentation, and client’s personal data. Such technologies and features as smart contracts, transaction tracking tools, and real-time property monitoring enhance transparency and help companies build trust with stakeholders.
Digital transformation plays a crucial role in the industry and many companies already recognized its importance and invested in real estate software development services. To maintain competitive advantage and meet customer demands, you need to also digitize your business. Let’s take a look at the most common examples of digital transformation.
Examples of digital transformation in real estate industry
Digital transformation in real estate sector: challenges and solutions
Sometimes, digital transformation and real estate have difficult relationships. But potential roadblocks shouldn’t discourage you from bringing your business into the future. This list of the most common challenges will help you to prepare for issues that may arise and solve them when the time comes.
- Initial costs. It is often tempting to embrace new technologies, but it can lead to significant expenses. Implementing AI-powered features or blockchain-based smart contracts will require additional infrastructure investments and hiring costs for skilled software developers with the necessary expertise. Small businesses can struggle with these expenses. In order to avoid unnecessary spending, it is crucial to determine which features and integrations are really important for your app and what you want to implement just because it is trending. Also, open-source AI models, integrations through APIs, and subscription-based cloud software can help you leverage cutting-edge technologies without breaking the bank.
- Data migration. Transitioning from legacy software and databases is one of the most challenging aspects of digital transformation. To avoid issues, consider modernizing your existing application instead of migrating to a completely new solution. If this is not an option, partner up with an IT company that has previous experience working with real estate data migration. Tech experts will help you to standardize datasets and test conversion accuracy before moving to new software.
- Security and compliance. While going through digital transformation, it is essential to remember cyber security and regulatory compliance. Failure to implement robust security measures or ensure compliance can lead to financial fines, lawsuits, and reputational damage. Real estate companies handle a lot of personal customer data, so investing in cyber defense should be a priority. Conduct recurring audits, both internal and with third-party assistance. Hire penetration testing services to identify potential weak points before malicious actors. Invest in employee training to help real estate professionals identify phishing techniques and understand the importance of strong passwords and authentication protocols.
End-user adoption. Motivating agents, brokers, property managers, and customers to use new digital tools can be challenging. Some real estate professionals are simply not tech-savvy enough, and some think that new technologies will disrupt their workflows. Invest in employee tech upskilling programs and implement in-app guidance to help users fully utilize new software. Showcase to industry professionals how real estate applications can automate or speed up daily tasks and emphasize increased business efficiency. As for clients, highlight features that allow them to quickly discover properties, process payments, and quickly get answers to their queries.
Conclusion
Digital transformation in commercial real estate and residential real estate is among the biggest growth drivers behind the market. Customers can buy, sell, or rent properties without waiting for real estate agents’ approval to go to dozens of showings. Real estate professionals can automate routine tasks, benefit from AI-powered data analysis, and increase conversions. Despite several challenges, digitizing your business is a must in today’s market. In order to stay competitive and continue to provide the best customer experience possible, you need to keep up with emerging technologies and invest in custom software development.
