For more than a century, property investment has been one of the most reliable ways to generate wealth. Aggressive and persistent businesspeople could make smart investments over the course of a lifetime to become billionaires, and even investing-savvy average people with a bit of extra capital could generate an additional stream of income by purchasing a rental property or renting out their former home.
But today, thanks to new technology, it’s easier than ever to invest in property—whether you’re trying to get the latest-and-greatest smart home, or a fixer-upper you intend to flip.
Property Listings and Searches
The most obvious benefit of modern tech are the online platforms that allow homeowners, real estate agents, investors, and other professionals to list (and subsequently search for) properties. Platforms like Trulia and Zillow have come to dominate the market, allowing anyone to list a property publicly for a set price; using these platforms, interested buyers can sort houses based on neighborhood, price, year built, and dozens of other variables. They can also browse through photos and videos to get an in-depth look at the property before they ever make the journey to tour it in person. This allows people to look at more properties in less time, while also broadening the scope of where they can invest; remote property investing is becoming more popular as a result.
Learning How to Invest in Property
One of the biggest limiting factors in property investment in the past has been consumer intimidation. If you’ve never invested in a property before, you’ll likely feel uninformed and unconfident in your decisions. How can you tell if a home is worth investing in? How can you make a reliable profit? Should you outfit your rental property with better smart home technology to attract better tenants and a higher monthly rent?
Fortunately, tech has made it easier for the average person to learn the basics. Thanks to the open and wide reach of the internet, experts all over the country have taken to write articles about their insights, from the basic tenets of a successful property investment strategy to more advanced tactics they’ve been experimenting with. It doesn’t take much time to find blogs, video series, podcasts, and forums full of real estate investors willing to help newcomers. Accordingly, even average people, with little to no prior knowledge of investing, have a chance to get involved.
Investment Loan Availability
It’s also important to note that the availability of online banks and lending institutions has made it easier to find a loan—and has increased your chances of finding a favorable loan. For example, through Savings.com.au, you can quickly compare many different home loan rates from dozens of different lenders, apples to apples. That way, you can find the most favorable terms, and the lowest interest rate, all while learning more about your potential financial outcomes.
Rent Collection and Automation
If you’re managing a rental property, your responsibilities will include collecting tenant applications, managing tenant information, screening tenants, collecting rent, following up on late payments, reviewing tenant requests for repairs, and more. For newcomers, this is intimidating, and for busy professionals, this is nearly impossible to manage manually. Fortunately, over the last several years, we’ve seen the emergence of more sophisticated property management platforms, allowing landlords to collect rent remotely and automate other responsibilities—like logging tenant requests online. Overall, these new features have reduced the time necessary to manage a property successfully.
Property Management Coordination
If you truly don’t have the time to manage a property on your own, or if you’re looking to invest in a property in a different area, technology can help you here as well. Thanks to online communication, live video streaming, and internationally available websites, property investors from all over the world can contact local property management firms and get help keeping their rental properties cash positive.
With the help of a property management firm, remote landlords can keep their properties safe, collect rent, manage tenant requests, issue repairs, and take other action to ensure the property remains profitable. Property management costs landlords a bit of money per month, but with the help of these high-tech firms, the possibilities for investment are practically limitless.
REITs and Secondary Forms of Investment
Technology has also opened the door to accessibility for secondary forms of property investment. For example, rather than investing in a property directly, you might purchase shares of a real estate investment trust (REIT), which generates profit and increases in value due to its exposure to the real estate market. Thanks to the abundance of online brokerage platforms, just about anyone can buy and sell these types of investments. This allows average investors to get involved in real estate without managing any direct home or property transactions.
The Future of Real Estate Investment Tech
Tech in the real estate industry is also on a forward and accelerating trajectory. There are even more technologies due for development and/or advancement in the future, increasing accessibility even further, including:
- AR, VR, and virtual tours. Already, we’re starting to see the emergence of “virtual tours” that allow people to not only view photos and videos of a property, but explore it in a first-person perspective, as if they were touring it in person. This is done with the help of a combination of drones, 360-degree photography, virtual reality (VR), and in some cases, augmented reality (AR). The big limiting factor for development here is cost, but VR, drones, and related technologies are set to become much cheaper in the near future.
- The blockchain. We also need to consider the blockchain. Most people equate the blockchain to cryptocurrency, but in the future, it may be used for asset tokenization, the process of splitting any asset into discrete, exchangeable tokens. If applied to the real estate market, this could allow thousands, or even millions of people to invest in fractional shares of ownership in a single property. The capital requirements for a typical investment would be practically nonexistent, since you could buy as little or as much of a property as you wanted.
- Personalization. To a lesser extent, personalization could open the door to new real estate investment opportunities. Interested property investors could use professionally developed recommendation engines to find new properties to review—or even take personalized advice from professionals on how to spend their money.
- Machine learning. Already, there are several platforms dedicated to using machine learning to help average people invest in the stock market; these tools allow average investors to leave their money with bots, who take care of the actual investing. If a similar formula is applied to the real estate market, it could allow investors with limited knowledge to buy and sell real estate with the acumen of an experienced professional.
The Risks of Accessibility
For the most part, it seems like a good idea to make property investing more accessible to a wider number of people. But are there any downsides to having this abundance of real estate-focused technology?
The short answer is yes, but right now, the downsides appear limited. For starters, higher accessibility could mean a larger number of inexperienced people making bad property decisions. If it’s suddenly possible for people with no training and no experience to buy $100,000+ properties, there could be a massive wave of loan defaults and financial losses in the near future, which could have a long-term negative economic impact.
There’s also the possibility that the increased interest in buying properties could artificially drive prices up. As properties become in demand, prices will increase to match consumer interest. In the short-term, this would stimulate more activity, but if left unchecked, it could trigger the growth (and eventual bust) of a full-blown housing bubble. Housing prices have increased steadily but reasonably over the past several years, so this is not a major concern.
Overall, it’s a universally good thing that property investment is getting more accessible. Keep an eye out for even better, more widespread real estate investing technologies to emerge in the coming years.