expressed opinion entrepreneur Contributors are themselves.
Over the past two decades, the real estate industry has undergone dramatic changes. These changes are due to an influx of new technologies and advancements that benefit many stakeholders, including agents, brokers, developers, property managers, investors, homeowners and entrepreneurs. We collectively refer to the synergy between technology and real estate as proptech.
Here are four of the most significant ways this innovative technology is disrupting the real estate industry.
Related: Proptech is creating incredible real estate opportunities for entrepreneurs
increase transparency
Lack of transparency and accountability has been a long-standing problem in the real estate market with no easy solutions. At the same time, addressing this challenge is critical because real estate concerns everyone. We all need places to live, work, and more.
However, the root of the problem lies in the very nature of real estate.Such a large market (currently valued at $3.69 trillion), real estate has sizable capital requirements that few traditionally could afford. Also, while it may not look like it from the outside, real estate space is fairly limited and accessible only to a relatively small number of professionals. Real estate processes and transactions have always been notoriously complex and obscure to the average person.
Due to the changes it has brought to the residential and commercial real estate markets, proptech has made significant strides in this regard. Increased transparency and accountability in the industry has been largely facilitated by accelerated data access, widespread use of technological tools, and increased viability of fractional property ownership. Real estate trends, analysis, transactions and operations are much more transparent now than they were just a few short years ago.
related: New Real Estate Tech: Disruptive Ideas Changing the Industry
Provide access to real estate for almost anyone
Proptech contributions lead to another major disruption in real estate. By giving ordinary people access to data, analytics, and investments, proptech opens the door for almost anyone to enter and participate in the industry.
With the help of technology-based tools, even those with limited knowledge and experience can participate in real estate transactions. For example, advances in CRM, analytics, virtual reality, and online transaction platforms have lowered the barriers to entry for realtors and brokers.As a result, in the U.S. alone, the number of licensed realtors has grown from 1 million in 2011 to 1.56 million in 2021. This is an increase of more than 50% in just ten years.
Likewise, while investing in real estate has long been an enticing idea for millions of Americans, many have been excluded from this lucrative strategy due to lack of adequate financial resources, market knowledge, data access, or even time. outside. Over the past decade, we have seen a proliferation of technological tools to address each of these challenges and more. As a result, we can expect the number of small-scale, novice real estate investors to grow exponentially in the coming years.
Related: This technology is destroying real estate.do not miss it
Break the monopoly of big players
On the other hand, another way this innovative technology is changing the face of real estate is by ending the monopoly of big corporations. Traditionally, real estate has been controlled by a small number of large corporations and tycoons who control every aspect of the industry, such as development, brokerage, investment, market analysis or property management. The reason is simple – very large barriers to entry that only some people can cross.
As smaller players are now able to participate in different areas of real estate, this inevitably challenges the dominance of traditional key stakeholders. While it’s understandable that they might be threatened by this flipped reality, it would be better for everyone if the industry became more accessible, transparent and democratic. Entry of new players will inevitably lead to accelerated growth within the industry, thereby opening up more opportunities for all players.
Improve productivity and profitability
Last but not least, proptech has forever changed the way the real estate industry does business by increasing productivity and profitability. This is arguably the most significant advantage disruptive technology offers real estate professionals.
For example, investors previously required months of research, data collection and analysis to find a profitable deal. Now with the help of certain real estate technology tools powered by big data and artificial intelligence, they can find good deals in minutes—whether they’re interested in residential or commercial real estate, whether it’s ownership of an entire building or a portion of a property.
Likewise, being a landlord and custodian of short-term rental properties used to be akin to a full-time job, between signing contracts, dealing with tenants, setting rents, collecting rents, managing finances, and all the other tasks. Today, there are dozens of platforms that help automate and simplify the rental property management process.
The daily tasks of agents, brokers, property managers, lenders and others are similarly expedited and facilitated. The end result is that real estate professionals—and amateurs—can perform their duties faster and more efficiently while making more profitable decisions about how to run their businesses.
final words
As a firm believer in the importance of technology in every sector, especially in real estate, I believe we are far from realizing the disruptive potential of this industry. I expect these four proptech trends to continue in the coming years. , And, with many entrepreneurs eager to continue democratizing real estate, new disruptions will continue to emerge.
