Property management in 2021: Key challenges and how to overcome them

 CALL TO ACTION: Interested in making things evolve? Let’s get together to discuss it!

 

Property Manager Joris Van Mol (Cobelpro) and the Proptech Lab team discuss concerns and solutions for some of the biggest issues in today’s property management.


How has property management evolved over the past few years – during a disruptive period that has seen a proptech boom in the market?

PPT Lab: Twenty years ago the hospitality sector began a spectacular evolution that’s still going on today. In the past, the value of accommodation depended primarily on location. But with the explosion of online booking services (e.g. Booking.com, Airbnb,…) and new services, that was deeply disrupted, and the old way of doing things brutally crashed. Now a multitude of other factors come into play. Among them, the growing role of building operators, which shouldn’t be ignored. Their core business is deeply diversified, focusing on marketing skills, customer satisfaction, and so on. 

Today, offices are going through a similar evolution, which was only exacerbated by the pandemic. And regarding retail, it is said that Covid-19 only killed “bad” retail; those who developed a successful business strategy have managed to overcome the pandemic wave.

The new way of working is based on two arguments. On the one hand, convenience, and on the other, optionality. You won’t be working in the office if it doesn’t give you more benefits than at home: it’s therefore up to operators to offer a more varied and interesting range of services, adapted to today’s challenges. It’s about making the employees and end-users want to return to the company’s head office. 

“The value of a building increasingly depends on who is the operator.” 

And now we see the same thing happening across the board in the residential sector. Within a few years, the possibilities for offering services have diversified and increased; with them in hand, the residential environment could be profoundly disrupted. And yet, if tech evolution depends in part on property managers, however, as we’ll see later, it’s mostly up to the owners, who, in the end, have the final say on tech- and financial decisions.

“We’re seeing a wave of innovation transforming how we live and work. It only makes sense property management evolved at the same time; but, in order to fully embrace the new challenges of today’s and tomorrow’s world, greater priority should be given to strengthening the role of property managers”.

Joris Van Mol: As you know, as property managers, we are active in the  “manage and operate” segment – which is the largest segment in Proptech. But from my perspective, technology still occupies too little of the property management industry. Most players don’t see it as a tsunami, and act on tech like as do with global warming – they think they can still ignore it. 

So yes, small adaptations at a slow pace; but on the bright side, it’s gradually gaining attention – and that’s a good thing. 

And we’re already seeing results. For example, compared to ten years ago, time spent on repetitive tasks and manual entry has been significantly reduced. Making a global report of the building for example is now very much automated, doing an analysis of consumptions is now completely automatic, … We can use data (historical and actual) to make predictions and forecasts., … 

Progress is there, but we’re crossing our fingers to see it flourish and expand in the years to come. 

“Nowadays the trend is to simplify processes.” 

Technology really helps to focus on the important things and to spend less time with repetitive tasks. 

The crisis we find ourselves in today is putting the market under pressure, and there is a lot of work to be done, so being able to devote your time to the tasks that really matter and that cannot be automated is really important these days. We can say that there has been a major shift from “reactive” management to “proactive management”.

What are the main challenges facing the sector today?

PPT Lab: Property managers face all kinds of challenges in property management (costs, life-cycle of the building, end-user satisfaction, …). So they need the right tools to be able to react quickly. Internally, they have many solutions. But the main issue resides in implementing solutions externally, for the clients. And often that decision isn’t up to the property manager; it’s up to the owners, and they may be reluctant to take risks. Property managers make suggestions, but they aren’t the decision-makers in the process.

“Property managers aren’t the decision-makers. Owners are.”

JVM: In my opinion, the main challenge for our sector is to continue to invest in Proptech, despite the crisis. As property managers, we are in contact with many types of owners. Some really love Proptech, others don’t. In any case, it is our role to clarify the different things that are possible nowadays and to give an insight into the market trends. While some investors/owners have a budget for Proptech-related actions, others are absolutely not interested. So it is our role to convince them and to let them make the shift. But it is not a simple task because we have to convince them of the proof of concept, the return on investment …

“Owners expect a guarantee – but that’s not always possible for promising new startups with no track record.”

And that sometimes involves a change within their own organization. Being responsible for the implementation, the owners expect us to give them some guarantee. And sometimes that’s a problem with startups that have a great idea, but no track record.

Given the crisis, tenants and building users will have a choice, so providing a better level of service will make a big difference.

But as I said before, as property managers, we have very little decision-making power with respect to proptech investments.

In terms of our internal organization, yes, we can do just about anything. But if there are investments in the building itself or in its operational costs, we depend on the owner’s will. And sometimes that makes things difficult – though challenging.

For example, we’ve completely automated our Helpdesk, dashboard, legal controls, e-invoicing, energy monitoring,… But when it comes to smart screens, bring me, smart lighting, remote access, smart HVAC, community app, parking app, … we need the approval and the budget.

And as real estate players, albeit at different levels, how can we help overcome these obstacles? 

PPT Lab: In addition to becoming a member of Proptech Lab? Well, there are two main things:

Internally: think about what can be optimized, monitor your time, your resources to have a good vision of the challenges and opportunities that come your way.

Externally: it’s ultimately up to the owner. But, as a property manager, you want to help them innovate. So it’s about giving them an incentive to do so. For example, before you start working for them, you could give them a list of proptech solutions that come with your work, and present it as a package deal. And you explain to them that this is how you work and that it greatly improves your productivity as well as the daily life of end-users. In the end, everyone benefits.

Owners don’t especially think about daily problems, you are the one who faces them every day. So your contribution must be prioritized.

In terms of practical solutions that can help property managers, they are many – but can be broken down into the following segments:

A collaborative platform like Urbest to streamline communication
(Credits Image: Urbest)
  1. a collaborative platform to streamline communication with end-users and businesses (e.g. startups like Urbest and  Hello Houston).
  2. energy consumption bill management solutions for multi-tenant buildings (e.g. Zero Friction, Trinergy)
  3. Solutions for mutualizing parking spaces and optimizing parking solutions (e.g. Commuty, BePark)
  4. Solutions to monitor energy or water consumption (eg. OpenMotics, Shayp, Smartvatten).

JVM: Going forward, I’d like to see Proptech play a more active role across the whole sector.  Proptech Lab plays an important role in achieving this. When I see the growing number of Proptech Lab members, it gives me hope. I think it’s great that it’s getting the attention it needs and deserves – it’s a sign that public awareness is growing.

So I hope its growth will only convince all risk-averse owners that this is the way to go. Let’s hope that the proptech solutions and possibilities weave a track record and a much larger share in the market. Because the benefits are enormous: increased transparency, improved services, better customer experience, accessibility to all kinds of data,… 

In addition, giving Proptech an even bigger platform would help us overcome these obstacles.

What can we hope to see in the future? 

PPT LAB: Obviously, we don’t have a crystal ball; we can’t predict what the future holds. We can only share some probabilities of what might happen; of what the future might be, relying on the current situation. 

Property managers will evolve to become more and more like hospitality operators; their goal will be to provide better access to a variety of services which will increase the value of buildings. They will play a proactive role in residential development.

“Property managers aren’t just a third party – they play an essential role in real estate development.”

Thus, as the value of buildings is increasingly dependent on property managers, owners need to understand that they are not just a third party, but their equal partner in increasing valuation. Their role is essential.

Would you like to add anything else?

JVM: At MIPIM Proptech in Paris, we explored many new possibilities in proptech. We discovered solutions we didn’t know were exciting, to be honest. And that’s a problem. The awareness of people must grow.

So it would be a good idea to create an open platform to see what’s possible – and maybe open it up to non-members?

“Sometimes there is an overload of information and it’s difficult to keep track.” 

Sometimes there is a real overload of information and applications and it is difficult to get an overview of everything that is going on in the sector. From where I stand as a Property Manager, connectivity and links between the different possibilities of Proptech should be the number one priority (eg. connection with the BMS, internal connection, connection to reporting tools, … together with data security of course).


SUMMARY AND CALL TO ACTION

Dealing with risk-averse owners, we thought about two potential solutions

  • reassure them about the reliability of a startup, by establishing an open platform supported by Proptech Lab and which they can consult for precise information and feedback.
  • give owners a list of solutions that form part of a package deal with your property management work.

Property managers, owners, startups, what do you think?


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Liuba Diederich