We thought it may be nice to touch on a few of the things we see pop up in the "proptech" community. For those who don't know PropTech is a fancy startup word for Property Technology. These are new ideas and innovations within the property/real estate space that founders hope are game changers to the way people deal with their multifamily assets. These services can range from moving tenants out with ease, to making day to day operations smoother for an owner.
You'd be surprised how many startups have already been in the space and how many emerge on a daily basis. Residential has seen websites make things easier for owners/agents and the experience of seeing what is going on in the market fun! There have been tons of companies to come into the residential space after the initial boom of Zillow. Now the talk of the residential town seems to be the "iBuyers." iBuyers, in a nutshell, are companies that buy people's home directly, typically under market value, but guarantee quick smooth transactions. Essentially, someone can answer some questions about the condition of their house, click a button, and sell their home to one of these companies (There is a bit more involved but not very much!) For people needing to sell their house in a quick timeframe and are ok with not getting the maximum price this is a good alternative. Almost all of the residential companies are now doing this such as Zillow Offers, RedFin Now, and Opendoor to name some of the top ones. Some people are saying a good majority of homes will be purchased by these iBuyers in the future!
The point of the iBuyers is that things are changing. People are experiencing different pain points in the market and companies are trying to fill that void. The multifamily market has been slower to adapt and it is a much smaller market here in Los Angeles County. For example, there are roughly 275,000 apartments here in Los Angeles County (2 units and above) and there are 1.8 million homes! However, apartment buildings have multiple layers to them. You have each unit in a specific building which either has one or multiple tenants which opens up a new world of pain points (amenities, moving, deliveries to the units, entrance to facilities, etc). You have the ability to open up new revenue streams such as Airbnb or whyHotel (short term rentals). You have Software as a service companies that are providing management tools and making day to day operations easier. Much like everything though, it takes time. These changes don't happen overnight. The people in the multifamily space will see all sorts of companies to potentially take on to add benefit to their building or buildings. Some will stay and some will go.
With that being said, we want to highlight some of the companies that we see emerging within the space that may be beneficial to all our potential users (owners, agents, appraisers, property managers, etc.) We think the apartment market looks much different in 10 years from now. Some people will be proactive about implementing some of these systems before everyone else while others will react once the other people catch on. We don't think it's a matter of IF things will change but WHEN...