Editor’s Note: Dennis Fassett is a former corporate finance executive turned real estate investing “Cash Flow Mercenary.” Dennis specializes in single-family and multi-family cash flow properties and thoroughly enjoys assisting his fellow investors with their own strategies, including how to buy your first apartment building.
As an ongoing contributor to Mogul’s “Market News Updates,” Mr. Fassett provides us with his own unique, lively, and thought-provoking commentary on the timely industry news and events of today that are impacting our industry. And be sure to check out his other super-helpful Market News Updates. For now, enjoy...
From Dennis Fassett, Cash Flow Mercenary...
It’s been kind of boring in the real estate tech space lately.
Aside from the launches of big online sites like Roofstock and the semi-recent IPO for Redfin, nothing much has happened.
So I went searching around to try to find out what’s on the horizon and see if it’s relevant to our investing businesses.
After searching high and low, I found a piece that talked about 5 areas of tech that we should see substantial progress with in terms of real estate.
Some of them are interesting, but none have the “wow” factor that I was hoping for.
Also, they’re focused on agents, but I can see how some of them could be successfully applied to the investing side of the business.
Here are the 5…
Artificial Intelligence
The first prediction is that AI is going to see increased usage by real estate agents.
They say that it’s because an agent’s success relies upon their ability to nurture existing and new client relationships. And because they’re helping folks make one of the biggest financial decisions of their lives. And because the process can be overwhelming, it’s important that real estate agents answer questions in a timely manner.
But that’s extremely time-consuming.
So they’re suggesting that we’re going to be seeing the use of more chatbots, where agents can utilize virtual customer service agents and chatbots to help field questions and automate discussions with clients.
This would free up the agent’s time to address more complex issues.
This makes a lot of sense, and I can see how using chatbots and similar AI applications could help with real estate investor funnels as well.
Big Data
Ever since the Zestimate was born, big data has been a part of real estate.
The author predicts that the application of big data is going to increase and that it’s also going to get within the reach of individuals like agents and investors.
They believe that big data is going to transform the real estate industry by making it more transparent, with more and more home evaluation reports, sale prices and demographic data being available and aggregated in the cloud.
The interesting thing about big data is that the author believes that agents (and investors) are going to have the ability soon to turn customer data from sources like social media into targeted marketing that delivers the right message to the right customer at the right time.
Drones
To be honest, I’m skeptical that drones are ever going to be an integral part of either the investing or agent side of real estate.
We already know that drones enable agents to integrate dramatic camera photography and video tours into online listings.
But beyond getting an aerial view of a property, what are they good for?
The author is bullish on the increased use of them for everything from neighborhood views to virtual open houses. But who buys a house strictly by looking at the outside?
That’s borne out by a study the author quoted that stated that fewer than 1 in 5 buyers makes an offer without first seeing a house in person.
To me, that makes drone footage a nice to have rather than a critical need. Time will tell, I suppose.
Mobile Devices
Well, well, well. It seems that an NAR study stated that after sitting on the sidelines for some time, millennials and Generation Y make up the largest group of homebuyers.
This means that the real estate industry will continue to become more and more millennial-friendly, which means more mobile-friendly.
This should bode well for real estate investors as well, as a lot of the mobile tools that get developed will be useful for us.
Bitcoin
What would a tech list in any sector be without a mention of cryptocurrencies?
The author believes that since the technology is redefining how money is exchanged, it eventually will have a big impact on real estate.
More buyers are interested in paying with cryptocurrency, which is leading some building owners to accept bitcoin as a way to gain a competitive edge.
There are also emerging services that provide landlords and tenants a way to pay and receive rent in Bitcoin.
It will be interesting to watch the cryptos and see if they survive the downtrend and do, at some point, become widely used.
So…
The author is predicting a “big year” for tech in real estate. While I can see that we’ll make progress in some of these areas, like I said before, there’s no real “whiz bang” tech that we can see on the horizon.
Talk Tech
Do you have a tech piece to add to this list? Share below.