The New Trend in PropTech: RentTech

The commercial real estate industry is undergoing a much-needed digital transformation, but John Helm, managing director of RET Ventures, thinks more investment is needed.

“If you look at the data, most of the money is being funneled into just a few late-stage companies and sectors, such as co-working, construction and consumer-oriented categories,” he says.

Helm thinks innovators need to look at RentTech, which he defines as any technology used to power multifamily or single-family rentals. RET Ventures recently closed a $108 million fund focused exclusively on real estate technology. “Large multi- and single-family rental owners and operators are increasingly adopting technologies that streamline operations and improve resident experience to differentiate themselves in an ultra-competitive environment,” Helm says. “We immediately recognized that RentTech was a green field of opportunity in a market that was being flooded by traditional investment firms and seed funds.”

One trend that RentTech syncs up well with is what Helm refers to as the hotelification of rental housing. “People have become used to high-end amenities from their experiences with hotels and short-term rentals and want those same options available at home,” Helm says.

Helm lists apartment cleaning, dog walking, dry cleaning and fitness services as hotel-level amenities that apartment firms are offering residents. “It’s no longer enough to have a beautiful building in a prime location—rental property owners have to create value for their residents if they want to hold onto them,” Helm says.

Helm sees more property owners and operators creating Airbnb-like experiences for residents. “These one-off experiences allow multifamily owners to stay ahead of their competition by delivering best-in-class resident experiences while creating new revenue streams for themselves,” Helm says.

RentTech could ultimately move to sectors beyond apartments and single-family rentals. “We are very interested in related RentTech technologies that can be applied to the short term/vacation rental industry as well as self-storage,” he says. “Both of these industries struggle with many of the same issues that apartments and single-family rentals are attempting to address.”

In 2020, Helm sees a lot of generalist venture capital firms getting into the PropTech and RentTech markets. He also believes smart apartment technology adoption will become more widespread as operators see both cost-savings from streamlining operations and improved revenue streams by providing a product that elevates the resident experience. He also points to furniture-as-a-service companies as something to watch in the year ahead.

When evaluating these new offerings, it is critical for building owners and operators to evaluate how much a technology will disrupt the organization and its onsite operations, according to Helm. That idea of limiting disruption also matters to residents.

“Resident experience should always be top of mind as well,” he says. “Multifamily organizations should prioritize simplicity over all else. Look for integrated solutions, not app sprawl, that provide residents with peace of mind, convenience and cost-savings.”

Resident experience matters, but data security is even more important.

“Residents are increasingly concerned about data privacy, so rental property owners need to perform extensive due diligence to understand how resident data is aggregated, analyzed and stored,” he says. “Partnering with a technology company that has unethical data practices is a public relations disaster waiting to happen.”