How can sharing economy boost sales and improve customer satisfaction in the Real Estate industry

Sharing Economy in Real Estate Property Management

How can sharing economy boost sales and improve customer satisfaction in the Real Estate industry?

We have all heard the phrase “Sharing is caring,” but what does that mean in our current realities, when it comes to sharing something other than a sandbox or a toy? How can sharing be beneficial to people of different roles in the community?

In this article, we’ll talk about the general business trends in the sharing economy and will focus in detail on how this concept can benefit the Real Estate industry – both on the developers’ side as well as the tenants.

What is sharing economy?

Sharing economy is a term that stands for an economic system where goods or services are shared between individuals. From a financial perspective, there are four ways this works: 

  1. Goods and services for free
  2. Goods and services for a fee
  3. Goods and services for barter or exchange
  4. Goods and services purchased together and the price of it shared

For example, you and I both decide to purchase a car. Neither of us needs it on a daily basis and therefore two cars aren’t really necessary. We decide to buy a car together and then use a Google calendar to book the car when we need it.

What are the basic benefits for us in doing this?

  1. Together we can get something better than what each one of us would get on our own (and at the same time, we have a chance to save money.)
  2. We would need less parking space.
  3. We will do something for ecology.

We’ll stop on benefits in more detail later in the article. 

The history of sharing economy

A shared economy or sharing economy has been around for millennia – people always shared things with each other for as long as history goes. However, most of the time, it was on a local level from one person to another with no system or mechanics.

As more people got access to more money, it became more popular to get something of your own rather than having to share it with others. Until the second half of the 2000s, when consumer behavior once again changed significantly, when ecologists’ and economists’ words and forecasts about the future became not very bright.

With over seven billion people living simultaneously on our planet, purchasing everything just for yourself no longer was sustainable. A growing number of people started recognizing that their consumer habits had to change in order to leave resources for future generations.

From 2009 onwards, the sharing economy was on the rise with numerous startups such as Airbnb and Couchsurfing becoming known worldwide. Since then, numerous other companies have started to pay more attention to sustainability and going green by offering shared services and goods.

PwC Report on Sharing Economy [Source]

Sharing Economy Statistics 2022

According to the PwC Share Economy Report 2021, this industry is forecasted to grow by a staggering 2,133% in just 12 years (from 2013 to 2025.)

According to Statista, the number of sharing economy users in the United States from 2016 to 2021 (in millions) is below:

Statista [Source]

Home-sharing industry has decreased during the pandemic and dropped in 2020 to 23.3 million users, as normal travel was not possible. However, this trend is projected to increase in the future, reaching 68.2 million users by 2023.

Let’s move to the real estate market and how the sharing economy can benefit all involved players in the business process. 

Sharing Economy Benefits

There are numerous benefits to share economy for everyone involved. We will stop on three main “actors” of the process: 

  1. The tenants – those who live in the apartments or houses
  2. The property managers – those who own the properties or just manage them
  3. The real estate developers – those who are building the properties and need to sell them

What are the benefits of a shared economy for tenants?

While it’s important to have a personal space to live in, many of the things we purchase for ourselves aren’t being used by us every single day. For example, a portable grill that we use once a week or so. At the same time, it was an expensive purchase at the time and we kept talking about the pros and cons, trying to justify the purchase.

The same story applies to power tools, cars, parking places, etc. Even if you are financially stable and can afford to buy or pay for all of those things for yourself, the question is more of: should you?

We have so much… stuff.

  • The average 10-year-old in Britain owns 238 toys but plays with 12 daily (The Telegraph)
  • The average British woman owns twice as many clothes in her wardrobe as she did in the 1980s, buys 59 new items of clothing every year, and has 22 things that she has never worn. (The Daily Mail)
  • 1 out of every 10 Americans rents offsite storage to put stuff they don’t need. Storage units are the fastest-growing segment of the commercial real estate industry over the past several decades (New York Times Magazine).

So… besides getting a storage unit or refusing to buy absolutely everything that isn’t strictly critical, what other option is there? Sharing economy!

Instead of buying that portable grill for just ourselves, we can buy it together with our neighbors and use it whenever we need it. Instead of purchasing all the sports equipment for our private home gym, we can find a place with a sharable gym available in the house, where we can simply book a period.

Sharing promotes community-building and nowadays community is so important. Whenever we face issues like the pandemic or the current political situation in the world, we all need to know the people living with us in the neighborhood or in the apartment complex. Such relationships are potentially mutually beneficial. 

Besides reducing the carbon footprint and going green by purchasing less stuff (because we buy one item to share instead of two for each), we also reduce our expenses and can afford to buy something of higher quality and still pay less than full price for it.

What are the benefits of a shared economy for property managers

A share economy is also great for property managers because the apps that promote co-living and community building usually offer great ways of communicating with the tenants and subcontractors. 

The implemented sharing economy also helps to manage common areas such as gyms, parking places, garages, and possible co-working areas in case they are available on-site. With the booking feature, everyone gets access to the required goods and services, everyone is happy, and management is much easier. 

Community apps also offer ways to submit tickets about various issues that crop up every once in a while at the properties and it’s important to be notified of those issues quickly, manage them in a convenient way, and store data about past issues. 

What are the benefits for developers & construction companies?

So… we have taken a look at the tenants and property managers… but how the sharing economy can be helpful to construction companies and developers? 

Well, actually, the developers also can benefit from community building software and mobile apps. It’s one thing to build a house, but it’s another to build someone’s home. Home holds a special meaning in people’s hearts.

With single houses, this might be a simpler task and with apartment complexes, you need to offer something more to improve the clients’ experience. Community and share economy apps that go together with the apartment purchase increase the interest of clients to become an owner or rent apartments. 

Therefore, there are two goals for real estate developers in integrating sharing economy apps and processes:

  1. Boost sales for new clients. When you have two apartments with similar features, it’s the small details that start to matter to the clients. If I, as a client, would know there are community services as well as a well-established neighborhood, I would much rather choose that apartment over the one with nothing of sorts, where I have to figure it all on my own. 
  2. Increase satisfaction for existing clients. Having an app where I can get all the news about the apartment complex or living area, submit tickets about maintenance things, learn about the events that are planned in the neighborhood, or have a way to share equipment without having to buy my own set of everything – that would make me happy. The mundane processes are taken care of and I can enjoy the results. 

How to choose the software your business needs?

There are numerous startups that deal with property management already – we wrote about them in our previous article. However, their majority is focused on maintenance processes or events.

To create a community with sharing economy principles, it’s better to have your own cost-effective solution that would be tailored to the needs of your real estate property – be it an apartment complex or several single-family homes located in the same area. This way you won’t have to decide how to adapt this or that feature to your property, instead, the process would work the other way around – the app would adapt to your specific needs.

We are currently working on developing a lightweight software solution that would have these community and sharing economy features in it. 

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