The real estate technology industry is a nascent one, but it has the potential to transform one of the biggest sources of wealth in the world. Currently worth about $18 billion, real estate is nevertheless a tough technology sector compared to FinTech and other opportunities for investors.
But consumer behavior is shifting, and both home buyers and sellers want more control, more information, and more say in the process. Real estate transactions are disproportionately important purchases for the average household, and consumers are highly motivated to find the best tools available and save on costs wherever they can.
The key to investing in real estate technology is finding those products and services that provide real solutions for consumers. These are going to be the fastest-growing companies in a sector that can be tough for start-ups.
Digital Marketplaces
The digital marketplace model is the Uber model of disrupting business. A digital marketplace is a third-party platform that connects clients with service providers, usually adding some kind of value for consumers that attracts them to the platform.
A company like Nobul is a great example in the real estate sector. The marketplace connects consumers with real estate agents, giving them an unprecedented amount of information about agents, including verified reviews, transaction history, and clear outlines of their services and fees.
Nobul is rapidly expanding, too. Already available across Canada and major U.S. markets like Florida and Texas, Nobul is scaling across the United States as it builds recognition with both consumers and major real estate players.
In the words of Founder and CEO Regan McGee on Yahoo! Finance, “We have thousands of agents already on our platform, which is the supply side of our marketplace. The demand side is consumers, the buyers and sellers, so when we open up a new territory, we need to let consumers know that we’re out there, we exist, and that they should come on our platform and get the best possible experience that they can have.”
Real Estate Crowdfunding
Owning a rental property is a major commitment, not just financially but in terms of time and stress. Nevertheless, real estate can be a very lucrative investment. Real estate crowdfunding platforms open up opportunities to invest in residential real estate with the resources of many different investors.
Real estate crowdfunding is a quickly-growing area because of its appeal to investors who want the benefits of real estate without over-committing their portfolio or taking on the responsibilities of property management.
Property Management Software
As more investors pile into real estate, largely driven by a housing supply shortage that has made rental income a reliable bet, they’re also discovering the pitfalls of becoming a landlord. It takes a unique set of skills, including screening tenants, accounting, rent collection, and managing maintenance people.
New property management software aims to automate and streamline many of the processes involved in rental property management. A number of new tech start-ups are aiming to provide one-stop shops for landlords and property managers who are looking to make their jobs more efficient and profitable.
Property management software promises growth as more investors take advantage of real estate opportunities.