The Emergence of PropTech in Real Estate

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PropTech is hot. Remote building access. Connected appliances. Security cameras and drones. The list of fascinating digital transformation goes on and on. This application of tech in real estate has been a fast-growing sector with research firm CREtech reporting that investment in the space hit $14 billion in the first half of 2019 alone, a 300% increase over 2018.

The Internet of Things (IoT) is one of the largest elements of the PropTech world. Its use of sensors and other hardware, coupled with broadband and software, allows homeowners and commercial property managers of multi-unit buildings to better manage things like security, temperature, and lighting.

But since the outbreak of COVID-19, the industry has accelerated into overdrive and is growing faster than ever before. Office buildings and those structures seeing less human traffic or that cannot be monitored in person because of the pandemic might rely on PropTech to help “see” how a building is functioning and alert managers remotely. It has also forced a widening area of emphasis beyond remote access and observation to support for contactless interaction or automation just because most of us are actually in our homes versus the office every day.

Here at Chariot Solutions, we’ve seen a number of new interesting PropTech projects. In particular, I am enthralled by H20 Connected and its solution for detecting leaking toilets remotely. While it sounds mundane, the technology requirements are complex, and the broader applications are compelling.

Watch the interview with Susan Springsteen, the president of H2O Connected, on this unique IoT solution for property managers.

Inspired by its sister company’s consumer version of the product called the LeakAlertor 6000 that works off battery power and beeps or flashes to alert a homeowner when their toilet tank is leaking, this new application is designed for multi-unit buildings like hotels or multi-family properties. The technology monitors a number of toilets at one time, operates a central data feed, and then alerts managers to which toilets are leaking, where the leak is located, as well as the type of leak and its size.

Using the solution, property managers can triage which leaks need to be fixed immediately as well as plan for fixes by bringing appropriate parts and tools the first time. It can save significant time, stress, and money.

Chariot worked closely with H20 Connected CEO Susan Springsteen and her partner Eric Canfield to devise the data capture component of this solution. First, we had to establish a connection between the hardware and local WiFi to transmit the data to an AWS-based cloud platform. We then built a dashboard to compile and surface this data and information in an actionable way. As part of that, immediate or urgent leaks were prioritized as text messages to managers.

The results have been powerful. One H20 Connect hotel beta client was able to save thousands of dollars and gallons of water by detecting which flaps were improperly functioning and allowing extra water to flow through the toilet. While it sounds simple in operation, it was incredibly complex in development.

The key to bridging that tech from drawing board to application and interface lies in planning. For those working in the PropTech space or creating solutions, these five questions are critical to identifying the business case for your tech and planning for your own build.

1. What’s the ultimate business goal for the technology?

Many companies commit to tech for the sake of tech. But as we discussed in a prior column, it’s critical to identify the aims of the business first, then make your tech decisions accordingly. Common goals in the PropTech sector often include:

  • Reduce energy costs when buildings or spaces are empty;
  • Detect issues early to prevent damage;
  • Provide safe reliable access to building for residents and guests;
  • Prevent spread of COVID-19 throughout buildings or spaces.

2. Can technology help achieve this goal or make the process of achieving it more efficient?

Once you’ve reached consensus on the business goals for the tech, then it’s time to identify whether tech is appropriate, which tech is best, and how to scope out a project and budget.

The first question we ask clients at this stage is whether tech is critical to the job. If so, how much? We want to reach the Goldilocks ratio. Too little tech and your system strains or slows. Too much tech and you waste budget or even tie up unnecessary resources managing it.

3. How will this solution exist in the wild and what are possible risks?

Congratulations. You’ve identified a problem and scoped out your tech components. Next ask yourself how this solution will be used in application. Are there unintended consequences?

In PropTech, there are many stakeholders: building owners, tenants, investors, vendors or service providers, even law enforcement and first responders. It’s critical that you evaluate all potential touch points for your tech and how it could be used, both as intended and off label.

The reality is that the line will continue to morph and move. Putting cameras in a bathroom might be an obviously bad idea. But what about an open microphone in a hotel room? Amazon Alexa anyone? Carefully thinking through use cases and liabilities is critical before you begin building.

4. Are there privacy considerations for this application? How will data be collected and used?

Again – cameras in the bathroom, bad. But there are even more difficult decisions to be made about user data and privacy. Even seemingly useless data can be valuable and has the potential to be misused.

Consider what we call “exhaust data.” This is extraneous information collected by sensors or monitors that might not support the primary application. However, this data can still show patterns and be misused or sold to third parties.

It’s critical that you understand what types of data you’re collecting, provide opt-out capabilities to all parties, and be vigilant about your collections, warehousing, and disclosure policies.

5. What are the technologies best suited for PropTech?

With a well articulated scope of work and guardrails in place, it’s time to begin designing and scoping out your build. There is a wide range of technology available and appropriate depending on your application.

Often, it’s a combination of hardware and software. From sensors to mesh networks to cloud servers to data warehouses to mobile apps, these technologies create a digital thread from a property through to the many stakeholders that will tap into its potential. Importantly, your technology partner will help guide you in choosing the right tech for your needs.