Property investors used to rely on calculators. But thanks to technology, the world is opening up to them. More people in the space are discovering the incredible benefits of leveraging AI- and software-driven innovations to drive their businesses forward.
For many in the industry, these changes are a revelation. What once took hours or days now takes minutes or seconds.
“We’ve seen sweeping changes across the industry, including in our business,” digital online broker Mortgage Quote says. “The quality of the tools available to investors today is higher than it has ever been before, with new capabilities to save time and get more done emerging every month.”
Big Data Analytics
One area where AI is starting to shine is in the realm of big data analytics. Investors are using the power of artificial intelligence to tell them where they ought to invest next.
Market analysis is becoming a significant feature. We’re seeing it being used to analyse market trends and estimate property values outside of conventional datasets, like past prices.
“There’s also an element of predictive analytics entering the picture with AI,” Mortgage Quote says. “Investors are getting more of a handle on how much properties are likely to appreciate in the future, helping them get a leg up on the competition and price units effectively.”
For example, AI can use variables like rental demand and economic conditions to provide estimates of what property values will likely be in the future. It can leverage the data to discover market trends that conventional analysis might not be able to interpret.
Blockchain Technology
At the same time, there’s also the development of blockchain technology in the sector. Investors are using immutable ledgers to improve transactions and maintain transparency.
Tokenisation is a big development in the sector that allows investors who want to take less risk or have smaller funds to enter the sector. Currently, prices on Miami Beach are sky high, but with tokenisation, investors can own chunks of properties instead of having to stump up capital for the entire project, allowing them to benefit from a booming market.
“Tokenisation is an exciting technology because it means sellers can chop up their properties and sell them piece by piece to anyone who is interested,” Mortgage Quote explains. “And because it’s based on blockchain technology, there’s no doubt about who owns what. If there’s rental income from the unit, it flows to owners in proportion to how much they own.”
Property Management Software
Property management software is another exciting innovation in the space that promises to transform how investors do business. Many of these systems contain automation tools that simplify rent collection and maintenance. There are also tools for things like lease management to streamline operations and cut down on manual work.
Tenant screening is another important function. AI-based tools are getting better at figuring out whether individuals or families are good bets and the risks they pose to landlords who want to see a return on their money.
“Figuring out whether the person renting the unit is able to pay for the accommodation is a significant concern for investors. The wrong tenant,” Mortgage Quote says, “is a big problem and can lead to all sorts of issues, including costly evictions and lengthy court battles. That’s why you always want the right people in your units paying rent.”
Property management software takes all sorts of considerations into its calculation and then provides the landlord with a risk score for the tenant. It is then their decision whether they want to go ahead with the rental or move on to another candidate.
Mobile Apps
Mobile apps have been around for property investors for a long time. But because of technology advancements elsewhere, they keep getting better.
Zillow and Redfin are two such apps that are currently at the forefront of many investors’ minds, allowing them to find properties on the go. But there are many others.
For many, the main benefit is deal management. Investors are able to track properties and stay organised throughout the process, seeing where they are at any given stage. (It can be challenging to keep track of more than one deal).
Heat Maps
Heat maps and other geospatial technologies are also playing a significant role in helping property investors leverage technology. These systems often use location analysis to analyse proximity to amenities, crime rates and school quality.
Largely, these technologies emerge from improved data collection and analysis. Investors can make more comprehensive and detailed data-driven decisions about where to buy based on the factors that matter most to their investment strategy.
For many, heat maps are at their most useful when they provide information about the growth potential of a specific area. These systems tend to be good at finding undervalued properties and identifying them for potential investors and buyers.
For example, you could find a property in an area where the heat map suggests growth, but the seller hasn’t caught up with the data yet and is therefore flogging the home at a discount.
Crowdfunding Platforms
Lastly, crowdfunding platforms are helping property investors with their finances. Instead of collecting the cash themselves, they’re going in with other people and sharing the profits.
Crowdfunding works similarly to tokenisation. It’s the idea that multiple investors can work together to take advantage of an opportunity that might offer higher returns than individual investments.
What’s more, there are now specific crowdfunding platforms built around the needs of investors. These services offer unique insights, enabling them to discover like-minded individuals and form partnerships with them.
“We know that the opportunities in the online space for investors to make better investment decisions in the property space are significant,” says Mortgage Quote. “Whether it’s financing, which is what we deal with, or working with other people, new digital tools make the process so much more straightforward.”