In the U.S., 11 million independent landlords and individual real estate investors own 20% of the national housing supply.
For them, managing property finances can be a difficult and fragmented experience. It requires at least 5-7 different software tools to stay on top of routine tasks like processing security deposits, collecting rent, and completing tax forms.
It can also be difficult to understand how individual properties are performing; many landlords don’t even know whether they’ve made or lost money until it’s time to pay their taxes.
Embedded finance solves these problems by transforming proptech platforms into a one-stop shop for landlords and property managers. When you embed business bank accounts and payment cards directly into your platform, landlords get access to a centralized place to manage their properties, do bookkeeping and tax prep, automate routine tasks, and easily understand the performance of their investments.
Embedded finance transforms proptech platforms into a one-stop shop for landlords and property managers.
If you’re a leader at a proptech platform who’s thinking about how to become a one-stop shop for your customers, this guide is for you. In it, we’ll explain:
Editor’s note: In this guide, we use the term “proptech” to mean platforms that help landlords, property managers, and real estate investors manage their properties. Many of the features and benefits discussed here also apply to other types of proptech companies such as construction management. We look forward to covering those use cases in similar detail in future guides.
When a tech company works with a financial-service provider to build financial products (e.g., rent collection, bank accounts) into their offering—that’s embedded finance.
By launching embedded financial products, proptech platforms can provide the following benefits to their customers:
Embedded finance isn’t just valuable for landlords; it also generates the following benefits for your business:
To illustrate what embedded finance could look like on your platform, let’s use an example. Say you’re the VP of Product at Lando, a rental-property management platform.
When a landlord signs a new tenant, they simply send them a link. The tenant connects their bank account using Plaid, then authorizes a monthly recurring ACH payment. If you also make bank accounts available to tenants, you can enable rent payments that are instant and free to landlords via book payments.
When landlords bank with Lando, they can see all their accounts on a single screen—clearly labeled and organized by property. Creating a new account (each with a unique set of account and routing numbers) is as simple as tapping a button; it can be done as often as needed.
With embedded finance, landlords can create numerous virtual and physical debit cards; each will automatically be nested under the account it is associated with. Cards can be programmed with limits on spend, merchant categories, and geographies; they can also be printed with the nickname of their respective properties.
With embedded finance, sending checks is a breeze. Landlords simply specify the recipient’s name and address, amount, date, and add an optional message. Landlords can also get checkbooks if they need to use physical checks. Additionally, it’s easy for them to deposit checks, if that’s how they receive rent payments.
Landlords often use software like Quickbooks, Hurdlr, and Plaid to manage property finances. WIth embedded finance, you can make integrating with these tools a seamless experience.
For example, with a Hurdlr integration, landlords can easily track expenses, record mileage, and set aside funds to pay taxes. Accounting, bookkeeping, and reporting on finances are streamlined as data is automatically synced and categorized.
Landlords can easily wire money or send ACH payments—for example, to pay a roofer or refund a security deposit.
When you embed banking and lending products, you become a complete solution for your customers—a single source of truth that makes it easier to understand cash flow, manage taxes, and administer data-related activities.
Unit is a financial infrastructure platform that helps tech companies make embedded accounts, cards, payments, and lending products available to their customers.
That means we help proptech platforms like yours launch rent collection, bank accounts, and debit card functionality, and more. To date, nearly 200 leading platforms and marketplaces have trusted us to help them launch and scale their embedded-finance programs.
Unit is also the only platform to offer a no-code and low-code solution to easily build and launch banking and lending with minimal engineering resources. We help support you with compliance requirements and bank relationship(s) so you can stay focused on scaling your business.
With Unit, you get the following:
If you’re thinking about how embedded finance can help you offer your customers a one-stop shop, please reach out. We’d love to brainstorm with you.
December 13, 2023
Check out our guides page to learn more about embedded finance