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Digital transformation is already reshaping global industries at a rapid pace. One of the most innovative industries in the world is real estate. Not surprisingly, real estate is embracing digitalization faster than industries like retail or banking.
Yet, it can be difficult for companies to stay on top of these changes while pursuing core business objectives. If you’re looking for valuable insights into how to introduce digital transformation trends into your particular case, or if you can’t solve a business problem for a long time – it’s time to jump on the bandwagon of new trends.
In this article, we’ll help you find a real estate digital transformation solution by answering the following questions:
- What is currently happening in the real estate market, and what are the main predictions?
- Why is it so important to be ahead of the digital transformation in real estate?
- What digital transformation trends will affect your company in the next few years?
- What are the benefits and challenges of real estate digital transformation?
- How to choose your digital transformation strategy right?
- How much does creating an app for the real estate industry cost?
Digital transformation in the real estate industry: a market overview
The unpredictable market dynamics and rapid urbanization of the modern world force companies to actively use more effective solutions. According to a new report by Grand View Research, the real estate market is expected to reach USD 5.85 trillion by 2030. Statistics show significant growth in the adoption of real estate market trends.
Having niche-deep expertise in building high-quality solutions for the real estate market, the future of digital real estate transformation has already come. Today, workplace concepts, accommodation, building architectures, hospitality management, and even whole cities are moving towards adopting real estate technology trends.
While the pandemic has boosted the industry’s digital growth, it is also associated with a change in customer behavior, need for convenience, and quality. For example, according to the National Association of Realtors, up to 97% of people start their property search online. Plus, more customers expect a better living experience, pricing, and personalization from real estate businesses, which the digital transformation is capable of.
Technological advances in business automation enable real estate companies to streamline workflows and perform extensive data analytics. This results in significant productivity, efficiency gains, and an increased customer base.
So, you automatically invest in your promising future by keeping up with the right technology trends. Real estate market dynamics show businesses are adopting digital technologies to gain a competitive advantage and increase revenue streams while meeting modern expectations and customer needs.
Real estate transformation market predictions: what’s next?
Rapid demand for touchless access systems, urban planning, cloud-based remote asset management, smart and green buildings are just a few examples of how our technology environment accelerates future real estate investment.
According to Deloitte’s Real Estate Industry predictions 2022, “More citizens will continue to work from home, more companies will use online channels to reach customers, and remotely operated processes will increase significantly.” Moreover, Oxford researchers reported that 53% of real estate companies have started investing in technology since 2020 and experienced significant benefits. So, this real estate market research lays the foundation for sustainable real estate market growth shortly.
The need to build robust real estate software solutions using advanced analytics and Environmental, Social, and Governance (ESG) focus ranks high on the wishlist of real estate stakeholders. Keep reading to see what trends will future-proof your real estate business.
5 key systems and strategies for digital transformation in real estate
As a real estate industry participant, you may require efficient tools to handle problems associated with day-to-day business activities. We’ve decided to single out real-based strategies to help you embrace real estate transformation efficiently.
Business inquiries. Digital transformation for the construction businesses is introduced through software implementation to simplify and accelerate construction processes.
Let’s look at the digital transformation strategies you can choose from:
- ERP solutions. Enterprise resource planning (ERP) software is an organization’s software to handle day-to-day business activities. You can create a single digital environment that helps you manage and track construction project lifecycles. The functionality of an ERP system ranges from accounting to automatic calculation of resource requirements and more. Read how to develop your ERP system and choose the perfect fit to work for your particular business processes.
- Asset management solutions. These tools are perfect digital solutions to unoptimized companies’ assets.
- Property management software. Digital innovation comes in handy if you look for a standalone solution to help you automate core real estate business processes. Property management software lets you track any information considering rental details, tenant details, contact information, rental rates, store documents, etc.
- Looking for clear instructions on building property management software? Benefit from reading our blog post.
- Inventory tools. While developing your business in the construction industry, there are many tasks you can solve by creating a digital real estate tool. For example, inventory planning, management, used inventory analysis, inventory usage control, and similar.
Sales & Marketing
Business inquiries. There are complex processes involved in selling real estate and marketing. In this case, you may also build a custom solution while making use of digital transformation.
Look at the digital transformation strategies you can choose from:
- CRM solutions. You can store and optimize information about your customers, tenants, brokers, or landlords with CRM solutions. These platforms will help you streamline customer dialogue, personalize offerings, avoid work pitfalls, and increase sales directly.
- Learn more efficient practices in our practical guide on real estate CRM software development.
- Lease tools. Such solutions are essential for real estate rental businesses. With their help, you can optimize communication between landlord and tenant. Using a real estate mobile app, you grant access to the system’s tenants and landlords to search for specific property information or schedule property viewings on their own.
Business inquiries. To effectively manage departments of your real estate company, you may need modern solutions that will help you easily communicate, control, and handle associated tasks.
Look at the digital transformation strategies you can choose from:
- Custom project management solutions. Real estate transformation entails developing modern solutions to work effectively. Regardless of your management style or workflow, you can optimize in-house communication with the company’s employees by clearly outlining tasks they need to do.
- Bid management software. Such solutions allow you to manage and deal with your real estate business participants effectively. Bid management software aims to ease paperwork and avoid risky purchasing decisions. You can achieve this by automating the proposal and contract creation process.
Business inquiries. If your real estate business lacks proper resource management, tracking, and planning, you can achieve the greatest organizational value with a hands-on digital approach.
Look at the digital transformation strategies you can choose:
Evaluation software. As an example of resource management solutions, evaluation software is useful for evaluating existing resources for in-depth cost analysis, efficient usage planning, and cost savings.
Business inquiries. Financial transactions with real estate require accuracy, reliability, and efficiency. There are many ideas you can implement in terms of digitalizing your real estate finance department.
Look at the digital transformation strategies you can choose:
- Accounting and finance tools. With the help of such tools, you’ll be able to control and manage all financial transactions within your organization. The options are multiple: you can manage payroll, rent receipts, or pay for some real estate materials. In this way, you will be able to have a clear idea of your budget and ingeniously allocate finances for several purposes.
Regardless of existing digital transformation strategies for real estate companies, you can choose to develop custom real estate software to fit your specific needs. Read on for how to build a real estate website with advanced features.
What happens if you miss the digital transformation in real estate?
In the face of rapid digital transformation in the real estate industry, there are inevitable consequences for businesses staying away from leading trends.
Decreased market competitiveness
Digital transformation increases businesses’ needs for workflow optimization, data processing, and improved customer service quality. A technological necessity in our current environment is no longer a free choice.
This is an urgent requirement to stay on top of the competition in the real estate market. A real estate business that doesn’t operate online loses out to competitors. All major real estate market players have a digital presence through online marketing campaigns, marketplaces, or mobile applications that solve complex problems.
When real estate customers decide to abandon your product or service, it results in a loss of revenue and creates a financial burden on your business. This can happen if your current real estate company is not meeting existing customer needs for remote interaction and improved customer experience and communication.
Gaps in operational processes
Operational delays and inefficient mechanisms significantly damage your overall business operation. For example, we worked on a real case for NorthWest Construction Control (NWCC), a provider of construction loan management solutions, where a lack of process optimization resulted in operational problems and loss of time and resources.
So, after we redeveloped the web platform and expanded functionality, the company has gained a powerful tool to scale and increase commercial profits and customer base.
Today, customer-centricity helps real estate companies to create maximum value for the buyer, tenant, or manager. Without a customer engagement strategy, real estate companies risk becoming irrelevant and losing customer demand.
Top 10 real estate digital transformation trends and use cases
Based on the real estate transformation predictions by recent Deloitte research and market overview, the top trends accelerate sustainable growth and innovation in the real estate industry. So, let’s look at the use cases that follow leading real estate digital transformation trends that you shouldn’t overlook.
AI and machine learning
Artificial intelligence and machine learning allow you to collect specific helpful information. For example, ML algorithms are the way your business can predict commission rate after every closed deal. AI-powered solutions improve investment decision-making, asset management, and urban planning.
You can build a customized forecasting tool based on unique industrial, residential, or commercial property needs. This will help you to enhance your critical decisions on investing, budgeting, and planning more efficiently. Combining AI algorithms with your CRM and marketplace data will drive more insights while improving data management and marketing campaigns.
Matt Vigh, co-owner of Prospect Boomerang, a real estate recruiting company, also sees AI and ML be relevant in real estate. “The biggest and most obvious place I see it factoring in is making CRM follow-up exponentially more effective. It will learn to aggregate better what is clicked, opened, forwarded, liked, and so many other data points that the CRM will not only listen better, but it will gather and share the valuable content more timely than an agent can.”
Data is a crucial ingredient in digital transformation. Data analytics solutions help you make sense of massive amounts of data, understand customer behavior, predict risks and uncover opportunities.
The value of big data collection and analysis already plays a vital role in digital transformation in real estate. According to Statista, global big data analytics will reach over $68 billion by 2025. By collecting and analyzing data in real-time, business decisions become more mature and can be easily monetized.
Real estate websites personalize customers’ experiences by suggesting offers based on previous choices. Real estate companies can predict market conditions, property purchases, prices, or investment prospects by collecting and analyzing customer data.
Internet of Things (IoT)
The Internet of Things (IoT) is a system of interconnected objects or devices designed to collect and send data over the Internet. This technology leads to improved predictive maintenance and construction management that can help commercial and residential properties cut operational expenses and prevent potential problems.
Sensors can be built into the water supply system, security systems, or electrical networks to understand the property’s condition in real-time and cut expenses. All these devices and sensors are centralized into one dashboard available through mobile applications. In turn, this helps property managers, agents, or owners to track and control properties distantly.
Augmented reality (AR)/ Virtual reality (VR)
Some of the most common real estate solutions that take advantage of VR technology are virtual tours, virtual check-in counters, and virtual home tours. Such virtual communication plays a huge role in property management.
A seamless facility experience is now possible without face-to-face interaction. Virtual reality tours can also help address security concerns. For example, tenants can verify deliveries before granting access.
Moreover, buildings with 3D tours have 87% more views than those without. Virtual views are encouraging various realtors and owners to equip homes with enhanced digital platform capabilities. VR technologies help to save the buyer and real estate agent money and time in determining the best purchase option. New office ecosystems, virtual house viewing, and remote document signing now represent the notable impact that technology is having on real estate transformation.
Drones are widely used to help create drawings around homes and properties. They have started to disrupt the real estate market with aerial photography and video recording capabilities.
These solutions are pretty affordable and helpful for accompanying a real estate tour and determining the property’s size. Drones are useful when it is necessary to get a feel for the place for those who decide to investigate the neighborhood or buy property. They can also help to explore hard-to-reach property areas (roof, attic, etc.)
In addition, these unmanned aerial systems can help detect potential problems and reduce resources. In other words, drone applications can be very different in future property management.
Blockchain technology is another revolutionary way to make real estate transactions transparent, efficient, and secure. By implementing automation, real estate transactions can be carried out safely and quickly. Blockchain technology can also help the real estate industry through smart contracts (see below) and tokenization.
Tokenization is the use of cryptocurrency to separate assets into tokens. In the case of tokenization, clients with different incomes and from various locations can participate in the investment process so that property owners can sell part of their property.
Smart contracts are blockchain applications (self-executing contracts) that record the terms and conditions between two parties in the form of computer code. All transactions are trackable through the blockchain network. Contracts are generated in a highly secure and decentralized manner.
The real estate sector involves large transactions that require speed of transactions, reducing costs and protecting against fraud. In addition, this blockchain-enabled technology removes the need for middlemen and bank verification.
Building Information Modelling (BIM)
Building Information Modeling (BIM) is an intelligent, model-based 3D process that enables architecture, engineering, and construction professionals to use advanced technology tools. Along with the digital transformation in real estate, they can plan, design, build and manage buildings and infrastructure.
This tool lets clients see the property’s appearance before the construction process starts. BIM models allow users to assess valuable information about the data of the building’s creation, approximate price, and what the building is made of.
Real estate as a service (REaaS)
According to Deloitte’s 2022 commercial real estate outlook, 75% of respondents claimed building partnerships to deliver new offerings to clients can be seen as real estate as a service. This can help companies expand partnerships and deploy an RWaaS model that combines strategy, technology, and data to provide first-class services.
Today’s consumers are used to searching for properties or services online. So, one of the most adapted trends across the industry is different real estate apps. Using mobile applications, consumers can buy, sell and rent a property with a few clicks. Buyers and owners of real estate can also access any information they need, which is stored in the constantly updating database.
These apps offer many advantages not only to only consumers but also to businesses themselves. Mobile solutions help optimize time-consuming processes and increase operational efficiency and portability.
As PLACE’s Stuart notes, “If you’re not currently delivering or working toward a delightful consumer experience in all aspects of the real estate transaction and core service experiences on a mobile device, you’re going to get left behind.”
On the lookout for what is coming next? Learn more about real estate technology trends 2022-2025 and set the right path to real estate innovation.
Northell’s cases of real estate digital transformation
The Northell team has already contributed to real estate transformation by creating fully-featured digital products. Let’s review our successful examples of digital transformation in real estate.
RhinoDox: complex real estate platform built from scratch
RhinoDox is a construction bid and proposal management platform that automates data and processes to generate offers faster. Thus, users can get accurate analytics quicker and make informed decisions.
Services we provided:
- Product discovery
- UI/UX Design
- User Testing
- Front-end development
- Back-end development
Challenge. Our team’s main challenge was understanding the complex app concept, gaining insight into the interaction between primary app personas, and finalizing the main product goals. From our development team, our client required creating an easy-to-use, full-featured platform that could evolve into SaaS over time.
So, after a comprehensive incoming information analysis and user testing, our team came up with an idea to build a system for optimizing and automating processes with the help of custom software.
Process. Getting started with requirements and business analysis, our team discovered new aspects and added them to the product roadmap. We defined specific user roles (manager, estimator, and coordinator) and developed user journey flows for each of them. We also wrote product specifications, chose the tech stack, and estimated the scope of work.
After that, following an agile approach to project management, we:
- Developed a completely new design system using RhinoDox’s brand colors to make the platform modern and attractive
- Mapped out the information architecture and created wireframes to make the platform minimalistic for users working with the ERP solution for a long time
- Created project lists with filters that contain all projects’ information
- Implemented calendar functionality, clause library, and manager dashboards with Wins/Losses chart and reporting feature
After all the development tasks were completed, our QA engineers tested all the delivered code and conducted manual testing of the developed components to exclude as many bugs as possible.
Results. The Northell team successfully released a fully-featured and user-friendly ERP solution for RhinoDox company from scratch. With our tech help, this solution allows users to save time in solving complex construction problems.
This solution is ready to scale for an unlimited number of teams. In addition, we’ve added an option to eliminate the human factor from the process to exclude operational losses and mistakes.
NWCC: upgrading an existing real estate solution
NWCC is a reliable provider of comprehensive construction loan management solutions. This web platform provides lenders with risk management services that protect lenders’ property portfolios from the design process through completion.
Services we provided:
- Product discovery
- UI/UX Design
- Front-end development
- Back-end development
Challenge. The client asked us to improve and redesign the web application and allow it to be relevant for the next 3-5 years. Our team’s main challenge was understanding the product’s specifics, the platform’s target audience, the required functionality, and the users’ hidden and existing pain points.
Process. We first started by conducting several workshops to understand the product’s logic. We studied the target audience, product needs, and our client’s business goals. We thoroughly analyzed existing functionality to make it more inclusive and address the target audience’s needs.
We defined specific user roles (borrower, bank, and managers) and developed transparent user journey flows for each. During the discovery stage, we collected our client’s relevant information to create a product per expectations and requirements. We wrote technical documentation and chose technical stacks: React.js, Redux, and PHP. We also decided on the budget and scope of work.
After that, following an agile approach to project management, we:
- Developed a new design system keeping the company’s branding style
- Changed the platform’s interfaces to make the platform user-friendly and easy-to-use
- Implemented sign-up / login feature, interactive onboarding
- Built dashboards for the bank, borrower, and lender
Results. After successful product deployment, we conducted A/B testing to ensure improved outcomes. So, by analyzing user feedback, we understood that satisfaction levels increased by 19%.
The Northell team improved process optimization, reduced costs, and incorporated new business processes into the redesigned web application. The company has achieved scalability to increase its customer base and ensure a seamless user experience.
Benefits of digital transformation in real estate
Digital transformation in real estate is accelerating and improving the critical processes that the real estate industry is built on. Let’s take a look at the benefits digital transformation in the real estate industry can offer your business.
Better user engagement
In the digital age, technological innovation is a viable solution to meet new customer needs when customer behavior and expectations have changed. The way customers search, book, and buy properties became online.
Today’s customers seek a personalized experience, fast solutions, and convenience. Therefore, your real estate business’s digital transformation means better user engagement while delivering a better user experience and personalization.
Digital transformation in the real estate industry allows you to cut unnecessary expenses and keep your budget under control. You can manage your budget with ease through:
- Real estate software will enable you to make information centralized while making it accessible to all company’s departments. In this way, your teams can improve decision-making while reducing costs.
- Automation of processes and tasks streamline real estate management. Check out our in-depth guide to developing real estate management software based on our expert insights.
- You can securely host your information on the cloud. So you can cut costs with flexible pricing policies and lower service charges than physical infrastructure.
Automating most of your operational activities and repetitive tasks results in greater efficiency of your real estate business processes. Real estate transformation eliminates complex and time-consuming processes while providing increased productivity and operational flexibility.
Improved time management
Improved time management is a logical continuation of the previous point. Digital transformation in the real estate industry frees up space for business scaling and other critical business challenges. Moreover, customers expect fast and first-class service when they want to solve their problems or discuss any issues. With real estate software, you can respond quickly from any device while improving your service and time management.
Increased capitalization opportunities
If you run your business in line with the expectations and needs of today’s customers, you can start making profits more quickly. Once you provide a reliable and efficient real estate solution or service, you will attract more customers who enjoy a hassle-free experience and increase your ROI. In turn, new financial capabilities can become your pivotal moment for business growth.
Real estate digital transformation challenges: how to solve them at Northell
If you choose to automate property management or other complex processes in your real estate business, you may encounter some challenges. Let’s briefly address an optimal solution to each case.
High level of security threats
Problem: One of the most responsible processes in commercial real estate is securing real estate transactions.
Solution: This is where real estate management technologies can come to the rescue. With AI-powered underwriting, financial institutions or banks can quickly process financial spreadsheets and view important documents. Or, blockchain-enabled technology can even help to eliminate the need for middlemen and bank verification.
Aimless adoption of digital technologies
Problem: Aimless adoption of digital technologies for the sake of rapid innovation is not the best choice. Digital transformation in real estate moves fast. Yet, there are companies that are afraid to spend the capital or prefer to introduce technology aimlessly.
Solution: There is no one-fit-all solution to meet all businesses’ needs. To avoid this:
- Identify the issues your company is seeking to solve
- Discover crucial real estate trends
- Find out how specific real estate technology adoption will solve these problems
Problem: The digitalization of real estate transformation leads to the automation of the main operational processes. This may potentially result in job loss for some employees.
Solution: There are always areas of business that require direct human intervention. Like Anthony Behar from Major Properties says, “Tech will not replace people, but it is important that tech complements the faces and people of real estate.”
How to choose a real estate digital transformation strategy in 5 steps?
Knowing the top trends and ways to digitally transform your real estate business is the first step toward a rewarding digitalization journey. You need to get your digital transformation strategy right to address your real estate business’s critical challenges and take full advantage of technology.
Step 1. Review your in-house processes
The first step towards digital transformation in real estate should start with reviewing your in-house processes. During this step, you will need to collect all the necessary information and failures in your current business activities. Choose any suitable visualization tools to help you structure the collected data.
Step 2. Identify your company’s pain points
Gather your team together to brainstorm the most important issues your company can’t solve at the moment. This could be asset mismanagement, unoptimized processes, wasteful use of resources, etc. During the brainstorming workshop, you can also consider all the key systems your company has, what it lacks and what you can combine into one system to solve main problems.
Step 3. Start small to make a difference
Try to implement minor changes before introducing digital transformation into your business. As we discussed earlier, one of the main challenges of digital transformation in the real estate industry is the aimless adoption of technology trends. If your resources aren’t enough to impact business improvements – move on to the next step.
Step 4. Analyze results
Explore the data collected, gather stakeholder feedback, and learn how real estate technology trends can help you. Make a rough estimate of the investment in technology and consider the result you will get.
Step 5. Consult with real estate technology experts
If you lack professional help to take these steps on your own, consult a dedicated software development team with an extensive experience in this area. In this way, an experienced team of specialists will help to consult to make a vital decision faster or develop a solution to address your specific real estate business challenges.
Are you a forward thinker? Impact your future business success by learning how to develop a real estate website step by step.
How much does it cost to create an app for the real estate industry?
Many factors affect the final cost of developing a real estate app. In particular,
- Project complexity and duration
- Required tech stack
- Staff composition and their seniority
- Product development schedule
- Number of software reworks
- Third-party integrations
- Feature list
- System adaptability
To help you estimate real estate app development, we’ve put together a table with approximate cost ranges based on your development team’s location.
To understand the project timelines, we can offer you to review of Northell’s average development timeframes divided by project stage.
With this information in mind, you can calculate the cost of the project and the timeline for developing a real estate application. Contact our team, and we will do it for you.
Digital Transformation in Real Estate: Conclusion
Traditional approaches are no longer suitable for a rapidly developing real estate market. Global influences, changing customer expectations, and high market demands drive the real estate transformation. Thus, the digital transformation in real estate has revolutionized how customers build, sell, buy and manage properties.
By taking advantage of new technology trends, existing companies are motivated to deliver significant productivity, efficiency, innovation, and improved customer experience. Tremendous opportunities for your business already exist to address critical problems of your business and stay ahead of competitors.
Go digital with Northell’s real estate software experts. Book a free consultation!