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Proptech development Proptech Software Development: Bridging Theory And Practice

Proptech Software Development: Bridging Theory And Practice

Apr 11, 2024

13 mins read

The real estate industry is experiencing a significant transformation, mainly due to the emergence and increasing importance of property technology, known as  “proptech.” Proptech offers entrepreneurs and investors a vast array of opportunities, as it has the potential to address the traditional inefficiencies that have plagued the real estate industry for years. Given that real estate is the world’s largest asset class, tech-driven companies have a unique chance to innovate in a relatively underdeveloped field.

Being one of the leaders in proptech software development, Leobit understands the challenges real estate businesses may face when adopting proptech solutions and how to overcome them. In this article, we’ll draw upon our experience in proptech development and share valuable insights to help boost your real estate business growth.

But first, let’s explore why investing in proptech software development is a wise decision.

Growing Importance of Proptech In Real Estat

Proptech refers to the innovative use of technology in the real estate industry to improve processes and enhance efficiency, sustainability, and overall user experience. It encompasses various aspects, including property and facility management, property finance, property transactions (i.e., buying, selling, and renting), and more to address the needs of the real estate industry.

Custom proptech solutions

The importance of proptech in the real estate industry is constantly growing, driven by several key factors.

  • Customer expectations. The importance of digital solutions is growing as they become an integral component of the real estate market. Considering that the market has been historically slow to adopt technology, there are numerous areas where digital solutions can be implemented to improve processes, many of which still rely on paper or spreadsheets and allow interoperability.
  • Tech progress. The rapid advancements in technology, particularly the democratization of GenAI and big data analytics, can revolutionize the real estate industry. These innovations can make it easier to predict market trends, streamline mortgage approvals, automate underwriting processes, and enhance risk assessments. 
  • Globalization. The real estate market is becoming increasingly global, with investors and customers looking beyond their local markets. For instance, digital lending platforms can democratize access to real estate financing, allowing a larger pool of investors to participate in the property market and make cross-border transactions.
  • Sustainability concerns. While 11% of carbon emissions in the built environment are attributed to embodied carbon, a significant 28% stem from operational emissions, like lighting, heating, and water overuse. Proptech offers solutions that can help make facilities management more energy-efficient and environmentally friendly.  A custom software solution can aggregate data from various sensors and optimize energy use, reduce waste, and contribute to a more sustainable future.
  • Economic efficiency. Proptech platforms can automate many tasks traditionally performed by humans, such as document processing, data analysis, and customer service, leading to cost savings and improved service quality.

Despite the significance that proptech solutions can bring to the real estate industry, it’s essential to acknowledge the challenges accompanying their integration. Let’s explore hurdles real estate companies may encounter and discover effective strategies to overcome them.

Challenges in Proptech Software Development and Ways to Solve Them

As the examples above show, integrating technology in real estate processes goes far beyond mere automation or performance boost. Yet, despite the numerous benefits proptech technologies offer, real estate companies may encounter several challenges when adopting new tech. 

Let’s examine each challenge and discover ways to overcome it.

Challenges in proptech software development

Legacy systems

One of the biggest challenges facing the real estate industry is the prevalence of legacy tech stack and software. According to Deloitte’s 2024 commercial real estate outlook, 61% of respondents acknowledge that their company’s core technology infrastructures still rely on legacy systems. Surprisingly, less than half of them are actively working towards modernization.

Even more striking is the continued reliance on old-school methods for critical functions within the industry. On average, real estate companies still use spreadsheets 60% of the time for reporting, 51% for property valuation and cash flow analysis, and 45% for budgeting and forecasting.

The prevalence of legacy systems in the real estate industry

Transitioning from traditional real estate software to proptech requires embracing a broader perspective of technology and innovation within the industry. To fully adopt and benefit from emerging digital technologies, real estate companies must first address years of amassed technical debt by bolstering their technology capabilities.

Tech talent gap

While recent layoffs in the tech sector might offer hope for industries struggling to attract top talent, finding suitable candidates remains challenging. McKinsey’s Technology Trends Outlook reveals that most fields related to tech trends require skills for which the talent supply is low. For example, the study states that only five qualified Azure cloud development professionals are available for every ten job postings.

Recent studies show that real estate and proptech companies plan to solve tech talent challenges by outsourcing software development. Their primary goals are:

  • Gaining technological capabilities and streamlining processes (42%)
  • Adding agility and resilience to their operations (39%)

Outsourcing is a good option for overcoming the tech talent gap and partnering with companies experienced in real estate and proptech software development.

Regulatory compliance

The real estate sector faces numerous regulatory challenges, particularly concerning sustainability. Global regulations are evolving, emphasizing environmental, social, and governance (ESG) metrics. Companies may soon be required to disclose detailed ESG data with the same transparency as financial reporting.

According to Deloitte, 59% of real estate firms lack the necessary data, processes, and internal controls to meet upcoming compliance standards. However, European firms seem slightly more prepared, with 54% expecting compliance challenges compared to 65% in North America and 58% in Asia/Pacific.

Engaging with proptech experts can help navigate these complex regulatory landscapes and ensure compliance with legal and data protection requirements, such as GDPR or CCPA.

Cybersecurity

The 2024 commercial real estate outlook study revealed that real estate companies globally are increasingly concerned about cyber risks, identifying them as one of the forces impacting their financial performance, particularly in Europe. This anticipation stems from the real estate industry’s growing integration of smart technologies while its core software remains obsolete, which exposes it to asset-level vulnerabilities.

To address this challenge effectively, we recommend the following:

  • Implementing secure coding practices, conducting regular code reviews, and performing penetration testing
  • Employing robust encryption protocols for data both at rest and in transit to safeguard sensitive information
  • Utilizing strong authentication and authorization mechanisms to ensure that only authorized users can access critical systems
  • Keeping all systems up to date with the latest security patches and updates to mitigate known vulnerabilities
  • Engaging with external cybersecurity experts to conduct audits and validate the security of your software

While these practices can help maintain system security, it’s essential to recognize that the weakest link in your cybersecurity strategy often lies with humans. Therefore, educating your team about common cyber threats and best practices for maintaining cybersecurity is crucial.

Data silos

Real estate companies generate vast amounts of data daily, including financial records, property management activities, and project management details. However, much of this data remains unused. In fact, only 13% of real estate companies have access to real-time business intelligence and analytics.

One solution to this issue is to address data silos by adopting updated technology. Instead of relying on separate solutions for managing transactions, CRM, and leasing management, companies can opt for a cloud-based software solution that seamlessly shares data across different functionalities. Moreover, it would allow you to exchange data between departments better and adopt analytics to gain deeper insights into your company’s operations.


These challenges may sound like real hurdles but don’t worry. Having a robust software development company like Leobit as your partner can help you navigate these challenges and unlock the full potential of proptech adoption. 

Actions speak louder than words. Explore our recent case studies to see how we’ve helped our clients overcome many of the challenges discussed above and stay ahead of competitors in the market.

Leobit’s Experience In Proptech Development: Real-Life Use Case

Leobit has helped numerous real estate and proptech companies build and modernize their software systems. Let’s analyze several use cases to gain insights into the challenges and opportunities that may arise during proptech development.

Use case 1. A comprehensive overhaul of a real estate investment management platform

Real estate solution

Our client, a market leader in managing investment property wealth through 1031 exchanges in the US, approached us with a pressing need for a rapid and comprehensive overhaul of their product architecture. They also aimed to migrate their infrastructure to the cloud to address scalability limitations and unlock growth opportunities. Additionally, they wanted to ensure compliance with Bureau of the Fiscal Service requirements and sought to introduce several brand-new features.

To kick off the project, we conducted a thorough product assessment to identify the most effective strategies for improvement. To simplify scaling and optimize resource utilization, our team proposed transitioning from a monolithic application to a microservices architecture and migrating the project to the Azure cloud. As a part of our well-planned migration strategy, we also employed custom scripts to synchronize the investment offerings database and seamlessly transferred users from the old platform to the new one.

Leobit developed a unique Portfolio Builder feature equipped with smart algorithms for creating customized portfolios with forecasting and risk assessment capabilities. The successful architecture redesign enabled our client to manage x100 more transactions effectively. The project’s success also contributed to the client securing $6 million in Series A funding during our ongoing technical partnership. For more insights into this project, explore our real estate investment management platform case study.

Use case 2. Optimizing proprietary lending platforms

Optimizing proprietary lending platforms

A prominent US-based real estate mortgage lender approached us, intending to develop a custom CMS from scratch and enhance three of their websites: the mortgage rate comparison web application and the broker-facing and borrower-facing websites.

Following a detailed audit of the existing systems, our team at Leobit embarked on a comprehensive front-end overhaul. We transitioned from Angular JS to Angular 8 and introduced additional features to improve optimization. Additionally, we took charge of CMS development using Angular for the front end and .NET for the back end, creating an educational portal for brokers and lenders. 

To streamline processes, we implemented various integrations, including

  • Docusign integration for electronic signatures
  • Integration with a Mortgage Pricing Engine to present accurate mortgage pricing information
  • Mandrill integration to enhance email communication with efficient delivery and tracking
  • Integration with a quoting tool for generating comprehensive mortgage quotes and providing users with information about potential mortgage options

Following our successful partnership, our client was recognized by the US Department of Housing and Urban Development as a Top Lender in 203(k) lending for sponsored originations. Our client’s company was also acquired by a US-based and SEC-registered investment management company founded by a Wall Street veteran. For more details, check our proprietary lending platform case study.

Use case 3. Rebuilding legacy real estate search software

real estate search software

Our customer, a real estate agency based in the United States, noticed a decrease in visitor engagement due to issues with their existing website functionality. They contacted us for a comprehensive website redesign that would help them meet industry standards and future-proof their software.

To ensure a well-structured and comprehensive approach, our team devised a roadmap consisting of four crucial project stages: the discovery phase, code refactoring, website redesign, and extending website capabilities with integrations.

We assisted the client in completely redesigning a dynamic real estate search portal, upgrading its architecture, and expanding its functionality with new features. This involved seamless integration with MLS property listings, Zendesk, Amazon SES, and Google Maps. 

Furthermore, we helped configure their AWS cloud architecture, preparing it for future upgrades. As a result, maintenance costs decreased, and application loading time was reduced by at least half. For more information, check out our real estate website portal case study

Use case 4. Developing a smart home mobile application

a smart home mobile application

Our customer, a global developer and manufacturer of electronics and smart home IoT solutions, commissioned us to develop a cross-platform mobile app that seamlessly integrates with their smart home hardware components. They specifically wanted to use Flutter, a widely acclaimed technology in major IoT applications, and Leobit appeared to be a great fit.

Working closely with the client’s embedded team, Leobit developed an IoT mobile app that seamlessly integrates with the hardware components. Our tech experts used ZigBee technology to establish reliable communication between various smart devices and the app. We focused on creating features like seamless home member administration, centralized home and room management, and robust home security functionalities. 

As a part of the project, we also implemented real-time mobile app notifications and SMS alerts to inform owners about critical events. Furthermore, we ensured a secure connection with a 24/7 alarm station for emergency situations.

Since its launch in 2023, the app has been deployed in approximately 70,000 Norwegian homes and has become Norway’s #2 smart home app. For more detailed insights, refer to our smart home mobile app development case study.


Whether you are just commencing a proptech development journey or looking to enhance your existing legacy solution with new capabilities, partnering with an experienced development company can help you concentrate on the business aspects while leaving the technical complexities to the experts.

Why Choose Leobit 

Leobit is a full-cycle web, .NET, and mobile application development company with over 8 years of experience in proptech software development. Our team has strong expertise in cloud computing, IDX and MLS integration, embedded software development, and more.

Our expertise has earned us industry recognition: Leobit was named the Top Real Estate Software Developer 2023 by Clutch and is nominated for the Global Business Tech Awards 2024 in the Best Proptech Company of the Year category.

Here’s what our clients say:

David Dahill
Leobit produces excellent value for our investment. Their incredible ability to spot issues and drive improvements is truly remarkable. The team’s insightful guidance takes our solution to new heights of efficiency.
David Dahill

David D.

CFO at Real Estate Company

Conclusion

The real estate industry has only recently started its digital transformation and offers tremendous opportunities for technology, namely proptech adoption. Proptech has dozens of use cases to improve the industry’s data handling, efficiency, and sustainability and use the terabits of siloed data real estate companies have generated for years. 

Despite many opportunities, real estate companies can face challenges and roadblocks while adopting property technology. Legacy systems, absence of data interoperability and tech talent gap may hinder the digital transformation and even put valuable data at risk.

The good news is that partnering with an experienced software development company can ease this hurdle. With expertise in developing custom software solutions for the real estate industry, Leobit can assist in modernizing legacy systems, integrating emerging technologies, and bridging the tech talent gap. Contact us, and we’ll gladly consult you further on the topic.