PropTech vendors make compelling promises. Time savings, efficiency gains, improved results, competitive advantage. The pitch is polished, the demos impressive, and the case studies persuasive.

But most agencies don’t actually measure whether their technology investments deliver. Subscriptions accumulate, budgets grow, and the assumption is “this must be helping.” Assumption isn’t analysis.

Here’s a practical framework for calculating PropTech ROI—before you invest and after.

The ROI Calculation Challenge

Technology ROI is harder to calculate than it appears:

Benefits are often indirect: A CRM doesn’t directly close sales—agents do. Attributing results to technology requires careful analysis.

Counterfactuals are unknowable: What would have happened without this tool? You can’t run the experiment both ways.

Multiple tools interact: Was that efficiency gain from the new CRM or the automation you added simultaneously?

Time horizons vary: Some technology delivers immediate returns; others take months to show value.

Cost accounting differs: Direct subscription fees are easy to track; implementation, training, and maintenance costs often aren’t.

These challenges don’t make ROI analysis impossible—but they require thoughtful approach.

The Basic Framework

Start with this structure:

Calculate Total Costs

Direct costs:

• Subscription fees (monthly/annual)
• Implementation fees
• Customisation costs
• Integration expenses

Indirect costs:

• Training time (hours x effective hourly rate)
• Learning curve productivity loss
• Ongoing maintenance effort
• Administrative overhead

Opportunity costs:

• What else could this budget fund?
• What could staff do with the time spent on this tool?

Sum these for total cost of ownership.

Quantify Benefits

Time savings:

• Hours saved weekly per user
• Multiply by number of users
• Multiply by effective hourly rate
• Account for what saved time is actually used for

Revenue impact:

• Additional listings attributable to technology
• Improved conversion rates
• Higher sale prices achieved
• Faster transaction completion

Cost avoidance:

• Errors prevented
• Staff not needed to hire
• Other tools replaced

Intangible benefits (harder to quantify but real):

• Improved vendor/buyer experience
• Better data for decision-making
• Competitive positioning
• Team satisfaction

Compare and Decide

Simple ROI: (Total Benefits - Total Costs) / Total Costs

Payback period: Time until cumulative benefits exceed cumulative costs

Net present value: Benefits and costs adjusted for time value of money

Different measures suit different decisions. Quick payback matters for uncertain investments; NPV matters for long-term infrastructure.

Practical Examples

Let’s work through specific tool categories:

CRM System

Costs:

• Annual subscription: $6,000 ($500/month)
• Implementation: $5,000
• Training: 20 hours x 10 staff x $50/hour = $10,000
• Year 1 total: $21,000
• Ongoing annual: $6,000

Benefits:

• Automation saves 3 hours/week per agent (10 agents x 3 hours x 48 weeks x $50/hour = $72,000)
• Improved conversion adds 2 additional listings annually ($30,000 commission average = $60,000)
• Annual benefit: $132,000

ROI: Year 1 = ($132,000 - $21,000) / $21,000 = 529%

This example illustrates why CRM investment typically shows strong returns—the efficiency gains alone often justify the cost.

AI Prospecting Tool

Costs:

• Annual subscription: $4,800 ($400/month)
• Training: 5 hours x 10 staff x $50/hour = $2,500
• Year 1 total: $7,300

Benefits:

• AI identifies 50 leads monthly (600 annually)
• 3% convert to listings (18 listings)
• Average commission: $25,000
• Attribution adjustment (AI contributed but didn’t solely cause): 50%
• Annual benefit: 18 x $25,000 x 50% = $225,000

ROI: ($225,000 - $7,300) / $7,300 = 2,984%

Even with conservative attribution, prospecting tools often show exceptional returns—when they work.

Virtual Tour Platform

Costs:

• Annual subscription: $2,400 ($200/month)
• Equipment: $3,000 one-time
• Training: 10 hours x 2 staff x $50/hour = $1,000
• Year 1 total: $6,400
• Ongoing annual: $2,400

Benefits:

• 50 listings annually use virtual tours
• Tours improve engagement, contributing to 3% price improvement on 30% of listings
• Average sale price: $1.2M, commission 2%
• Annual benefit: 15 listings x ($1.2M x 3% x 2%) = $10,800

ROI: ($10,800 - $6,400) / $6,400 = 69%

Virtual tours show positive ROI but more modest than other tools. Benefits concentrate in specific property types and markets.

Common Pitfalls

Avoid these ROI calculation errors:

Overstating Time Savings

“This saves 10 hours weekly” sounds great—but what happens with that time? If saved time gets absorbed by low-value activities, the economic benefit is limited.

Be realistic about whether saved time converts to productive use.

Ignoring Implementation Reality

Vendor demos show tools working perfectly. Reality includes:

• Features that don’t work as advertised
• Integration problems
• User resistance and partial adoption
• Ongoing maintenance requirements

Discount promised benefits by realistic adoption and effectiveness rates.

Assuming Full Utilisation

Most agencies use 20-40% of their technology capabilities. ROI calculations assuming full utilisation dramatically overstate returns.

Base calculations on realistic utilisation patterns—or commit to achieving higher adoption.

Forgetting Opportunity Cost

Every dollar spent on one tool can’t be spent elsewhere. Every hour training on Platform A isn’t spent on Platform B.

Compare technology investments against the next-best alternative use of those resources.

Measuring After Implementation

Pre-investment ROI calculations are estimates. Post-implementation measurement reveals reality.

Track Specific Metrics

Before/after comparisons:

• Time spent on tasks the tool addresses
• Conversion rates for relevant processes
• Volume and velocity of transactions

Attribution tracking:

• Which outcomes trace back to the tool?
• What would have happened without it?

Utilisation data:

• How much is the tool actually used?
• By whom, for what purposes?

Regular Review Cadence

Schedule ROI reviews:

• 90 days post-implementation: Early indicators and adoption tracking
• 6 months: Initial ROI assessment against projections
• Annually: Full ROI review and renewal decision

Tools that aren’t delivering should be reconsidered at each review point.

Honest Assessment

When tools underperform:

• Is the tool the problem, or is implementation/adoption?
• Can changes improve returns?
• Should you cut losses or invest in better utilisation?

Sunk cost fallacy keeps agencies paying for tools that don’t work. Regular honest assessment enables better resource allocation.

The Decision Framework

Use ROI analysis to guide technology decisions:

High ROI + High confidence: Strong candidate for investment High ROI + Low confidence: Consider pilot or phased approach Low ROI + High confidence: Probably pass or find alternative Low ROI + Low confidence: Definitely pass

Not every technology needs positive ROI in isolation. Infrastructure investments may enable other tools or capabilities. But those strategic arguments should be explicit, not excuses for poor returns.

Building ROI Discipline

For agencies wanting to improve technology decision-making:

1. Establish baseline: Document current state before any new tool
2. Require business cases: Every technology request needs projected ROI
3. Track actual results: Measure reality against projections
4. Review regularly: Annual technology budget review against ROI
5. Share learnings: Build institutional knowledge about what works

This discipline prevents technology accumulation without accountability—and ensures resources flow to tools that actually deliver value.

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Linda Powers consults with real estate agencies on technology strategy and investment decisions. Her framework for ROI analysis draws on working with agencies across Australian markets.