Disruption Brought by Property Technology in the 21st Century
With a more globalized world ‘Crowdfunding’, real estate is an interesting proposition for investments abroad, where the knowledge might be especially lacking for the specific market and managing the property is a cumbersome and expensive proposition for individual investors.
There are really very few sectors, if any, that remain isolated from the impact of technology and advancements in areas such as Big Data Technology, Machine Learning, and Artificial Intelligence. Whilst from the outside looking in, it might appear that these technology buzz words and their impact is expressed loosely in our world; however experts in each domain know and understand that the businesses will continue to witness the wave of disruption and the businesses that will thrive are the ones that will adapt and are agile in their business processes.
The Turning Point – From Physical to Virtual
Property or the Real Estate industry has been one of the key components of economic growth in any part of the world and whilst the real business is concrete brick and mortar but there have been numerous ways how this industry has seen the impact of technology on the way things are done, and will continue to be impacted by the rise of technology and innovation. A decade or more ago, marketplaces for real estate started cropping up all over the world and sites such as Rightmove (UK), Zoopla (UK), 99 acres (India) disrupted the model of Real Estate agents by creating an online marketplace where sellers and buyers can meet. Of course, the online model doesn’t entirely replace the offline model, where buyers are used to an agent showing them around properties and to consult on various other matters related to property purchase; however it has created a massive impact on the traditional model of real estate brokerage by bringing more transparency in the marketplace and reducing reliance on property agents.
A Distinctive Evolution in the Accommodation
The second wave of innovation in the real estate industry started with sites such as Air BnB, which have democratized the short stay model and created numerous ‘apart hotels’ all over the world. Based on Market Capitalisation alone, Air BnB’s worth is $31 Billion, and $5 Billion or more of Hilton Worldwide Holdings Inc., which operates and owns more than 5000 hotels worldwide, and Air BnB doesn’t even own a single piece of real estate that is advertised on its platform. This is the power of technology that allows firms with the right creative bent, technology prowess and market timing to scale at levels that have not been witnessed historically. Air BnB has allowed everyone with a spare room or flat, to operate his or her own bread and breakfast service and become a part of the booming sharing economy.
Whilst this change has not been easy and there have been numerous incidents and controversies around the globe on the ‘apart hotel’ model however it still remains buoyant; despite being plagued by regulations and tightening of government controls, Air BnB still thrives and given the size it has, access to cheap capital and the political clout it now commands, it is more than likely scenario, that the platform will continue to thrive.
Crowdfunding – A New Chapter in Realty Business
The new theme of the Property Technology sector is the Crowdfunding in real estate sector which allows investors with smaller sums to participate in the real estate sector and not have to deal with the troubles and hassles of legal paperwork, tenancy agreements and other maintenance issues that are generally associated with this sector. Using technology such as the platform for making these kinds of payments, streamlined process for generating rental yields on the properties and eventually the profit share at the end of the term, creates lucrative opportunities for people to enjoy the upside from real estate investments. These investments are generally held in a limited company structure where the investors become shareholders of the limited company; so offer protection in case of any issues with the platform, as the investors remain the shareholders of the limited company that owns the asset.
Moving into the Future with Futuristic Innovations
With a more globalized world ‘Crowdfunding’, real estate is an interesting proposition for investments abroad, where the knowledge might be especially lacking for the specific market and managing the property is a cumbersome and expensive proposition for individual investors. The changes seen over the last one decade or more in the property sector, it is safe to say that this sector will continue to see disruption, whether it’s crowdfunding, legal titles of properties being maintained via the blockchain technology or perhaps using Bitcoins for property investments; the sector will be no short of innovation in time to come.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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