The Real Estate-Technology Relationship

by Editor

According to Forbes, technology has transformed real estate investing in five ways:

  1. Artificial Intelligence and Big Data

Gathering and analyzing the information you need to make a smart, profitable investment takes time and work.

According to Forbes, finding a profitable opportunity takes roughly three months of investigation and analysis for a novice investor. In today’s dynamic market, an investor has only three months to make a decision since a more sophisticated and experienced investor will snare all worthwhile prospects.

Many people look for methods to use artificial intelligence (AI) to computerize massive data analysis. Several online markets and platforms are changing the way real estate investing works by making it easier to study the potential of a property.

AI made it possible for new, individual, part-time investors to compete on the same level as people who had spent their whole lives analyzing transactions and trading properties.

While AI makes the real estate investing process easier, investors should remember that technology will never be able to replace the human touch. To choose the best investments, investors should use technology to sort through their options and pick out the best few. After that, they should still do their own research and analysis.

  1. Using Technology During The Purchase Of Real Estate

Finding the perfect property is only the first step in making a lucrative investment. Purchasing real estate is equally as difficult, and it has traditionally been dominated by a few big names. In the last few decades, the number of proptech companies has grown by leaps and bounds. These companies help both homeowners and real estate investors optimize and streamline the process.

Everything has been streamlined and rearranged for the advantage of small-scale purchasers in a user-friendly and accessible manner, from seeing properties for sale to being accepted for a mortgage to signing a contract. One of the ways that technology helps with the democratization of real estate is that investors do not need strong technological skills to acquire homes.

  1. Crowdfunding for Real Estate

While rental properties can be profitable, not everyone is interested in owning and managing a large number of them. Not every landlord is referred to as an investor.

Crowdfunding for real estate has become more popular because of changes in technology, especially the rise of social media. In 2020, the crowdfunding industry will be worth $12.27 billion. We noted the success of the SmartCrowd platform that is now making its way into the Saudi market.

This modern alternative to traditional real estate investment trusts (REITs) has made it easier and more accessible for multiple investors to pool their money to own shared properties by getting rid of the need for investors to be qualified and lowering the minimum investment amount.

Crowdfunding platforms, more than AI-based analytics, have enabled individuals with only a few thousand dollars to participate in real estate transactions and reap the rewards.

When considering this method, investors should consider not only the benefits, but also the drawbacks, such as illiquidity and the loss of control. Before you participate, do your homework and make sure you’re happy with the platform and how it manages money.

  1. Rental Property Management and Technology

Returning to rental property investing, being a landlord was traditionally connected with full-time employment and was mostly reserved for individuals having many properties. Managing a rental property requires a wide range of skills and tasks, such as finding good tenants, collecting rent, keeping track of costs, and doing the books.

The surge of part-time investors made possible by AI and big data demanded the automation of the rental property management process as well, and technology was quick to respond. There are now a lot of websites that make it easy for landlords and Airbnb hosts to meet the needs and requirements of people who want to invest in long-term and short-term rentals.

Property owners should not overlook the human element as they adopt technology. Successful landlords talk to their renters well and build relationships with them to make their lives better and keep them as renters over time.

  1. Virtual Real Estate Investing

Many people find it strange to invest in pixels that represent real estate, but others are already pouring money into the metaverse, trying to be the first to create and control a parallel universe of real estate holdings. In a number of articles so far, we’ve talked about how successful metaverse investments and platforms are. Real estate professionals need to get involved right away or they’ll be left behind.

Technology has advanced to the point where it is now possible to generate revenue from virtual real estate.

Virtual real estate undermines a key benefit of real estate as an investment strategy: it is not a physical asset and can be lost overnight. Investors risk losing everything if the metaverse crashes. So, investors should think about this new way of investing as a way to diversify their portfolios rather than as their main source of investments until the virtual space has enough rules and security and becomes more predictable.

Investors should expect this tendency to intensify and extend in the future years, given how quickly and widely technology has been adopted in the real estate investing market. Real estate will continue to be disrupted by technology, and those who want to be a part of the multibillion-dollar industry’s future must accept this fact.

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