eTopical Precious Finds
Prop tech is huge in the real estate industry for a reason – it helps investors maximize profits and save time, money, and energy. Some of this tech is proving to be extremely valuable. For example, automation in commercial real estate is used by property investors, management teams, and landlords to handle the tedium of repetitive, mundane tasks.
Although automation is powerful, there are several other technologies embraced by the industry that make a huge difference.
1. Augmented and virtual reality
Augmented reality (AR) and virtual reality (VR) have been around for a while in the gaming industry, but now they’ve made their way into real estate.
Although similar, there’s a difference between AR and VR. With AR, virtual elements of reality are placed on top of a real, physical environment. For example, you may have seen mobile apps that let you superimpose new furniture onto an image of your existing living room. This is the perfect example of augmented reality. In contrast, virtual reality is an immersion into an entirely virtual, interactive world.
When this tech is used for architectural visualization, it’s powerful. Real estate developers struggle to promote properties that haven’t been built, so they usually create costly showrooms to provide a realistic experience of the interior of these buildings. It’s much cheaper to create a virtual representation of these buildings and their interiors. With a simple VR headset, potential investors can take virtual tours and it will feel like they’re really in the building.
Virtual home tours are highly effective
Another way AR and VR tech works is by creating virtual tours that walk prospective buyers and tenants through a property and explain property rules, regulations, and insights into how certain features work. This has become pretty standard in the last few years, but being immersed in a fully virtual environment takes it to a whole new level.
Virtual tours are surprisingly effective, and according to survey data, three out of five homebuyers would purchase a property after only taking a virtual tour. That’s saying a lot, and this is good news for real estate investors. It means virtual tours can eliminate a significant number of in-person showings, saving realtors time and mileage.
2. Renter rewards programs
You’ve probably participated in a customer loyalty program for a restaurant or department store. The same type of program exists for renters to earn points for paying rent. Through Bilt Rewards, points can be redeemed for air travel, hotel stays, collectible art, and even credits toward a down payment for a home in the future.
Bilt has an impressive line of partners, including World of Hyatt, Aadvantage, and American Airlines, making this a truly unique rewards program. And although they’re still new, the company is already worth $350 million.
People can earn points through Bilt credit cards or just by paying rent. For instance, without the card, each on-time rent payment will net 250 points, which adds up to a total of 3,000 points per year. The downside is the redemption value. Ten thousand points will only get you $125 toward a travel purchase. Although it’s not much, for anyone who has to pay rent no matter what, it makes sense to join the program.
Those who use the Bilt Mastercard can earn one point per dollar on rent paid with the card, up to 100,000 points per year. The card also earns three points per dollar on dining, two points per dollar for travel purchases, and one point per dollar for everything else.
3. Curated real estate assets
Every investor would appreciate being given a list of expertly curated real estate investment opportunities that have low fees, lower minimums, and a higher potential for liquidity. This is possible through a prop tech company called Cadre.
Cadre is a real estate crowdfunding platform for accredited investors with a net worth of at least $1 million and $200,000 in annual income.
The company was created to fill a gap in the real estate crowdfunding market to generate higher returns. The return rate is significantly higher at 18%, compared to other platforms that generate between 8%-12%. The reason Cadre gets higher returns is they focus on commercial real estate, like office buildings, industrial properties, multifamily, and hotels. As such, the minimum investment is usually $25,000.
Prop tech is still evolving
Technology is disrupting real estate, but still hasn’t reached its full potential in the industry. In the coming years, there will be many more prop tech startups that fill existing gaps and provide truly unique benefits to investors.
