The real estate industry is evolving in response to the changing times, more recently, the COVID-19 pandemic. Recent technological changes have become the bridge between people and property by removing or lowering barriers to entry and thereby opening more opportunities for investing.
Take a look at how technology is shaping and disrupting the real estate landscape and what it means to investors like you.
1. Rise of Real Estate Crowdfunding
The Jumpstart Our Business Startups Act has allowed small businesses, usually early-stage companies, to raise capital from anyone. This became the start of crowdfunding that has reached real estate. With crowdfunding in place, investing in prime real estate projects is possible for regular people. Real estate crowdfunding leverages the internet and website infrastructure to create an accessible platform.
How does real estate crowdfunding work? It is done through a crowdfunding site. Property developers offer projects in need of capital and investors participate by putting in a certain amount of money. The minimum investment for real estate crowdfunding websites varies, but having $1,000 or $5,000 (and supposing you meet the qualifications set by the platform) can get you started as a real estate investor.
Another convenience of investing on crowdfunding platforms is that deals are supposedly vetted and sponsors evaluated, and you only need to select which ones to invest in. Nonetheless, it would be best if you did your due diligence. Research and read what investors say about Crowdstreet, Fundrise, RealtyMogul, and other popular crowdfunding websites.
2. Adoption of Fintech
Nobody really pays cash for a house, and this can’t be any more true in an era of digital banking and cryptocurrency. You can conveniently make payments online if you have an e-wallet, linked bank account, or credit card. Because mainstream digital payment service providers and banks have apps, you only need a few taps on your mobile phone to complete a financial transaction.
This access makes it convenient to move money to buy shares, fund investments in crowdfunded deals, and make mortgage payments. Accessing financing is also not that cumbersome. One can apply for a mortgage online and get preapproved without going to a bank branch. Meanwhile, you can connect with a peer-to-peer lender that transacts purely online if you need a personal loan
3. Growth of “Airbnbs”
Airbnb may have started the home-sharing revolution, thanks in part to the social-media generation. Its rise to prominence has also signaled a shift in property ownership and rental paradigm.
Renting out a room or the entire vacation home could make owners earn more money for a short period. According to the company, hosts on the platform have earned more than $110 billion.
This earning potential builds a solid case for buying a vacation rental property. However, it’s important to note that a portion of that income would go to home improvements to meet guests’ expectations and create experiences for them. There’s also insurance and whether it covers the rental property.
4. Transformation of Spaces
Technology has paved the way for telecommuting, which is expected to continue in a post-pandemic world. Property owners and developers are looking at ways to reinvent the traditional office space. The popularity of coworking spaces for freelancers and flexible workers is one indication.
Nonetheless, the COVID-19 pandemic has brought to the forefront issues, such as indoor air quality and social distancing highlighted by elevator configurations in structures. The construction industry will have to harness advanced technology to design and build safe, healthy, sustainable, and liveable structures. This extends to planning cities that integrate green spaces into urban settings.
It’s essential to study how these changes will affect your investments in the property sector.
5. Ease of Property Shopping
Looking to flip properties or buy a second home? You can check out properties for sale online. Real estate databases make property shopping easier with listings near you or your desired location.
As real estate is local, it would be more helpful to find information about the neighborhood, like nearby restaurants, schools, and facilities that could push property values upward. You can also schedule a tour, which can be in-person or virtual. And you may be able to close the deal electronically.
The Future of Real Estate Investing
Indeed, investing nowadays has taken on a personalized approach. You can’t predict the future, but you can carefully study your options, especially trends and tools and their impact on your real estate investments, and make informed decisions that can safeguard your money.
