Real estate is one of the biggest commodities in the world. A report by London-based real estate advisor Savills pegs the value of all global property at a whopping $217 trillion. To put this into context, the value of all the gold ever mined is approximately $6 trillion, meaning today’s global real estate value is 36 times larger.
In spite of its value, the real estate industry has lagged behind in the arena of technological trends. Many real estate practices are antiquated. Still, the industry is slowly integrating advances in technology to transform how it functions. One of the most important technological advancements that influence real estate is financial technology or fintech.
From Traditional to Technological
Acquiring investment properties, especially in top real estate markets like Miami, can be difficult. Sometimes, people need to apply for hard money loans to close on the property they want. Now, many real estate investors turn to crowdfunding.
Generally, the idea behind crowdfunding is to find funds for a project through the use of online sites, primarily on social media. This technique advertises real estate projects to as many people as possible. Through crowdfunding, real estate investors and developers can advertise their projects to people who would have otherwise had no clue those projects existed.
With the World Bank predicting that crowdfunding will become even bigger in the coming years, traditional real estate companies will soon see the value of fintech.
A Change in Customer Behavior
One of the most exciting aspects of fintech is how it’s changing customer behavior. Now, there are services that allow people to easily participate in bids and draws for attractive properties. This gives both beginners and professional investors equal opportunity on real estate investment properties.
Fintech also makes way for lower-cost real estate solutions that traditional real estate companies do not or are slow to offer. After all, buying a home in 2018 is way different than at the turn of the century.
Artificial Intelligence and data-driven recommendations turn real estate investing into something more similar to stocks investing, making the process easier. Through fintech and its various payment and transaction methods—online payment, blockchain, cryptocurrency—it’s now possible for real estate buyers and investors to purchase properties without leaving their couch.
A Home in the Cloud
The rise of cloud computing has created an opportunity for bankers to connect directly with their clients. Cloud computing is also an easy technique that easily deploys bank services which decreases the time and effort that users spend on transactions.
The cloud is also a platform with a wide-reaching impact on real estate, especially on the closing process. If you’ve ever bought a piece of property, you’d know how long, tedious, and inefficient this process is.
With cloud computing and other forms of data management, closing on a property can now be streamlined. From contracts to electronic signatures, the once-long process of closing a deal on a property can now take just days.
Finance and real estate have always gone hand in hand. Now, with the advent of financial technology, this mutually beneficial partnership has become even better, both for the industry and the people involved in it.