CEO and Co-Founder of Big screen browsera real estate data analytics company, helps even beginners make profitable investments in minutes.
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Real estate investing has existed since time immemorial and will continue into the future. After all, people will always need a place to live, even if they can’t afford a house. They also need a place to stay when traveling, and more and more are choosing to move away from traditional hotels.
However, this does not mean that real estate investment is a stagnant industry, and it has been a decade. Rather, it has changed significantly over the years, and recent technological developments and advancements have accelerated this transformation.
If you own a rental property or plan to buy in 2023, you won’t have to run a rental business like our ancestors used to. In this article, I’ve rounded up four of the most prominent ways technology can help investors boost profits.
Investor-focused online real estate marketplace
The first step in any real estate investment journey is buying a good property in a good market. Investor experience shows that the extensive research and analysis required to select a location and property for sale for investment purposes takes an average of three months. Additionally, seasoned investors have traditionally had the upper hand when it comes to finding quality deals through their professional networks and relationships.
However, thanks to recent technological changes, real estate investors will be able to search for suitable listings for sale online by 2023. This makes it feasible to invest in remote markets where investors do not have the experience and physical presence, a major benefit for those living in cities that cannot afford it.
A technology-enhanced general search for properties for sale can be performed on marketplaces such as Zillow and Redfin. Importantly, such platforms provide individual investors with access to MLS listings traditionally reserved for realtors and brokers. Meanwhile, other marketplaces, like Auction.com, offer off-market listings.
So, all in all, by 2023, technology will help investors find potentially good opportunities from their desktop or mobile device, and each deal will take significantly less than three months.
VR-Based Rental Showcase
With a market size expected to reach $252.16 billion by 2028, virtual reality is playing a growing role in real estate. Not only is it used by agents to create virtual tours of listings for sale, it’s also used by rental property investors to provide 3D tours of rental properties. While all investors can use it to their advantage, this technological advancement is especially useful for out-of-state and short-term rental landlords. The first cannot actually show every qualified tenant their rent, while the latter has a high turnover.
Since rental property listings with virtual tours are already showing promising results, we can expect this to become a major competitive differentiator by 2023, and possibly even the norm in just a few years.
Automated rental property management
In the past, to generate passive rental income, investors had to resort to hiring a professional property manager. Many are hesitant to do so despite the fact that professionals are less personally involved in the business, do not provide the best tenant support, and neglect property damage and maintenance, resulting in sub-optimal results. Not to mention that they charge handsome commissions ranging from 10% to 50% of revenue.
However, technology now enables real estate investors to generate coveted passive income from rental properties without ceding control — and a significant portion of the income — to third-party managers. One of the most notable real estate tech trends of the past decade or so has been the boom in online property management platforms, offering solutions for both long-term and short-term rentals. Platforms such as TurboTenant, Hostaway, and Guesty allow rental property owners to synchronize and automate many processes, such as signing lease agreements, managing booking calendars, collecting rent, and more.
This is an important technological breakthrough that combines the advantages of first-hand property management and passive investing.
Dynamic Rent Pricing
Next year will see the expansionary growth of the short-term rental industry we saw before the pandemic, according to a panel of 19 real estate experts we recently interviewed for forecasts through 2023. However, investing in short-term rentals—unlike long-term rentals (traditional rental properties)—has its own unique challenges. One of these is setting the correct daily price to achieve the optimal balance between daily price and occupancy to maximize revenue and profit. Unlike long-term rental sites, the vacation rental marketplace allows investors to set different prices for their properties for each day of the week to reflect seasonality in demand. While this is an important way to improve results, providing the best rate for each day is easier said than done.
By 2023, real estate investors can rely on a variety of technological tools to do this task for them. In most cases, these tools use past and present data on rent comparisons in the area to predict future trends in demand and pricing. The Airbnb platform offers smart pricing tools, but investors can also use third-party services like BeyondPricing and PriceLabs.
However, since how you price your property is so important to the success of your short-term rental business, I recommend investors review the results provided by any software they choose to ensure the numbers make sense.
final words
While overall, 2023 appears to be a good year to invest in real estate, everyone can decide whether or not this is the right investment based on their purposes and desires. If you think this is the right choice for you, I strongly recommend that you leverage the power of technology at all stages of your investment journey.
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