Real estate has been a constant economic factor since the time of the pyramids. But its venerable nature has also meant that it can be slow to adjust to the times.
The pandemic created a unique push that vaulted the real estate industry into the 21st century. From tokenization to remote technology and more, here are a few lessons that other business sectors can learn from how the real estate industry has adapted to the modern world in recent years.
Real estate has always had a high barrier to entry. Individual home buyers need to tether themselves to lengthy 30-year mortgages. The cost to buy, fix, and maintain investment properties is steep. Commercial real estate isn’t just expensive. It comes with significant additional environmental, appraisal, survey, and loan origination fees.
The cost of initial investments in real estate has been an issue for smaller investors for a long time. However, the walls have started to come down because of tokenized real estate. Companies like RedSwan have created digital real estate alternatives that, in effect, create a real estate blockchain. This allows investors to purchase direct shares of commercial real estate while the property owners maintain ownership.
This application of decentralization can be applied elsewhere, too. Those in industries with high barriers to entry, such as telecommunications or brick-and-mortar retail, shouldn’t be afraid to explore how to apply a tokenized approach to pooling investor funds and achieving business goals.
One of the simplest yet most profound evolutions of the real estate industry has been the introduction of virtual home tours. The need to physically visit a property can be time-consuming and difficult. If someone wants to see a listing that is too far away, they often have to lean on pictures and images, which can be deceiving.
Virtual home tours allow potential buyers to look at a piece of property no matter where in the world it’s located. As long as they have an internet connection, they can access interactive video formats that help them investigate a house or building in intimate 3-D detail.
Rex Theme points out that this has several important benefits. For instance, it creates a larger pool of buyers. Agents can also focus on streamlining the closing process without taking as much time to show houses. This concept can be applied to countless industries, including education. Several universities offer virtual college tours for potential students to get a feel for campus without an in-person visit. Whenever an in-person activity is required by tradition, it’s worth evaluating if and how remote tech can ameliorate that need.
In the pandemic era, it’s become essential for companies to show that they care about consumer safety. One key way the real estate industry is doing this is by promoting contactless interactions. This starts with things like virtual tours but has extended to other areas of the property buying process as well.
For instance, you can often conduct red-tape activities, such as setting up insurance and escrow services, entirely online. An example of this is Mercury Insurance’s partnership with the A.I. brand Flyreel. The two companies created an app-driven contactless home inspection option. This minimizes health risks by avoiding unnecessary in-person home visits during the purchase process.
Many industries remain mired in the inefficient tradition of conducting business interactions in person. Often, the need for direct, face-to-face communication is unnecessary and, as is now the case in the real estate sector, should be reserved for unique circumstances.
The real estate industry is going through a long-overdue upgrade. As it aligns itself with the times, other industries should sit up and pay attention. There are many advantages that modern technology offers to every industry. Waiting until you are forced to adopt them only means you’ll be that much more behind the competition. Proactivity is the name of the game when it comes to tech investments a quarter into the 21st century.
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