6 Ways in which technology is changing the Real Estate Investment process
Software and technological advancement have taken the world by storm. It has established its dominance over most of the industries. The real estate sector is no exception as technology has touched every aspect of the industry now. The use of technology has now revolutionized the real estate sector through automated homes and virtual reality. The use of blockchain technology has also largely impacted how real estate activities are carried out and the real estate tokenization technology is expected to bring a promising future for the sector. Let us discuss some of the prominent technologies which are revolutionizing the real estate sector.
Technological developments in real estate
Blockchain technology is a concept whereby a democratic market is created for property possessions after the ownership of the property has been broken down into small items which are represented as ‘tokens’. Blockchain technology has attracted several investors like real estate transactions have been simplified. It has also increased liquidity for real estate assets.
The use of blockchain technology is also expected to bring security, transparency, and efficiency to real estate transactions. Tokenization and smart contract are the two most important areas of real estate transaction in which blockchain is expected to make the biggest splash.
While employing blockchain technology, real estate assets are split into tokens which are then stored on the blockchain. By tokenizing the real estate asset, landlords are now able to sell just a small portion of their property. Investors can also resell their shares in an open market through the secondary market. Another benefit of blockchain technology is that it opens up a route for investments from individuals that are from different income levels and locations.
The smart contract brings the buyer and the seller together as they need not go anywhere else to complete their registration process. The buyer just has to submit their information directly to the seller through an encrypted block. By using a smart contract, you can reduce the number of middlemen involved in a real estate transaction and can also speed up the process. The smart contract also helps in reducing fraudulent activities during property transactions.
Artificial intelligence is impacting the real estate industry largely through the machine learning method of data analysis. With the help of ML, computers are now able to learn the data and not just carry out the programmed task. ML has helped in making real estate business decisions smarter through pattern recognition as it helps in determining information regarding the property such as the popularity of the locality and the reasons for the same.
Virtual reality (VR) has been instrumental in speeding up the sales cycle as it allows clients to get a good idea of the property and also puts them in contact with the agents. VR in real estate helps in trying before making your purchase decisions. This also saves up the time and money spent on travelling to the property. Using VR, the realtors not only offer you high-quality photos or 360° video, but they also provide a 3D visual tour of the property. With this technology, investors are now able to step into the property they wish to buy and check out the rooms and other promised facilities.
Technology and the changing ways of real estate investment
Technological development has impacted how real estate transactions are being carried out. Technology has revolutionized the way buyers view and buy their property. Technological developments have also opened up room for several new methods of investing as well. Let us discuss some of how technology is changing how real estate investments are made.
The Internet has been instrumental in evolving the real estate sector as now, most of the properties are being listed online. By making an online listing, the sellers are now able to provide a proper description of the property along with pictures and videos. The buyers, apart from checking these details, can also check tax implications, neighbourhood reviews, and the scale of infrastructure as well as commercial development of a particular locality.
3D Visual Tours
The technology has in itself evolved and developed. If earlier you could only view your property through photos and videos, now the technology enables investors to take a 3D tour of their property. As already stated, the development of virtual reality has also enabled the investors to visit the property virtually and take a look around the property as if they were truly present in the property.
The evolution of blockchain technology has also transformed how the investment process is carried out. Back in the day, people worked hard to earn enough money to buy a property. Some even took out large loans to finance their dream property. This is not the case now. Investors become more and more familiar with the concepts of crowdfunding and fractional ownership. By investing through these methods, you can invest with smaller capitals in big-ticket projects. Investing through these options can also help you in diversifying your portfolio.
Let’s say, you are planning your investments in Bangalore with Rs. 60 Lakhs at hand. ABC Ltd. offers you a fractional investment option whereby you are required to fund in just Rs. 5 Lakh for the ownership of a share in the property. Now you can invest in more than one share in the same property or diversify your investment portfolio by investing in different locality, sector, or other investment option.
An appraisal is also another important aspect of real estate investments. An appraisal is a process of evaluating the merits and demerits of a property to determine the actual or potential value of the property. Traditionally, appraisals have been carried out by an appraiser who could be influenced by the clients to avoid economic retribution. However, technology has played a vital role in providing a more accurate appraisal of a property to the buyers, by utilizing machine learning and large data which has been collected and stored.
The technology has also been instrumental in developing platforms whereby parties can complete a transaction by staying very well organized and saving time. The technology now permits parties to carry out secure and legal e-signing processes along with facilities such as file sharing. The introduction of e-signing facilities has not only been instrumental in bringing in efficiency in real estate transactions but also improved how the buyers and sellers communicate.
Technological advancements and developments have surely changed how real estate transactions are being carried out. It has brought inefficiency and has also increased the buyer’s satisfaction. It has also brought in several innovative methods of investing and has also helped in eliminating previously known disadvantages of real estate investments.
The introduction of blockchain technology has led to the tokenization of real estate which has made trading of real estate assets easier. This has thus helped in making real estate a more liquid asset. Crowdfunding and fractional ownership have also played a major role in reducing the capital requirements in a real estate transaction, making it more accessible.
Assetmonk is an online investing platform that offers investment opportunities in Bangalore, Chennai, and Hyderabad. We offer our properties using blockchain technology and it is categorized into Growth, Growth plus, and Yield products. Each of these categories carries both short-term and long-term benefits to its investors. Visit our website to know more details on our offerings.
Technology is changing the Real Estate Investment process FAQ's:
Some of the most commonly used technologies in the real estate sector include artificial intelligence, augmented reality, blockchain, drones, virtual reality, etc.
Blockchain, cloud computing, artificial intelligence, cyber-security, the internet of things (IoT), PWA (Progressive Web Application), mobile applications, etc. are some of the emerging technological trends in 2021.
Technology is changing the face of the real estate industry as it has changed how the properties are listed, views and purchased. By online listing, the owners are now able to provide all the necessary details along with photos, videos, and even a 3D view of the property through virtual reality. It has also made appraisal and valuation a more data and research-based function. E-signing has also increased efficiency and helped in saving time. The influence of technology is expected to increase in the future as well.
It is an emerging trend of real estate wherein the investing process of real estate assets is a combination of traditional and technological methods. In other words, companies that allow traditional real estate activities to be carried out through technology. Assetmonk is an example of a PropTech Company.