Reducing Real Estate Investment Risks with Technology
Technology has revolutionized the real estate industry by introducing mobile apps that allow individuals to rent out their space and find new homes through social media feeds. With the aid of these apps and other technological advancements, buyers, sellers, and real estate agents can expedite the marketing and transaction process with ease. Furthermore, technology has proven to be advantageous for real estate investors, and the industry continues to see advancements in this field.
How Technology Can Help With Investments
To prove it, a recent article from TechCrunch reported that a new SaaS startup called Sundae, which pairs sellers of old, damaged homes with interested investors on their platform, just secured another $80M in funding after seeing a 600% increase in profits over the last year.
The platform helps vet the sellers and investors, making it both easier and more reliable for all parties involved.
And, Sundae isn’t the only app making real estate investing less risky — there’s also Groundfloor, Fundrise, Peerstreet, and many others.
So, does that mean anyone can invest in real estate without a real estate agent or adviser?
And what does this mean for real estate agents who typically work with new investors?
Are Real Estate Investing Apps Reliable?
Traditionally, a lot of capital is involved in real estate investments. So, it’s reasonable to wonder if you can rely on a mobile app to navigate the process or handle that much money.
The truth?
Most of the real estate investments apps available don’t deal directly with the transaction process as much as they deal with connecting investors to opportunities, or hosting “crowdfunded” investments where investors only contribute a few hundred or thousand dollars.
Much like stock investment apps, real estate apps have low barriers to entry and make it as simple as possible for users to navigate the process of connecting with opportunities or crowdfunding with as little risk as possible.
For instance, Fundrise allows investors to start with as little as a $500 investment, while another app called PropertyFIxer helps calculate a buyer’s ROI and overall profit from rehabbing and reselling a fixer-upper.
Do Real Estate Investing Apps Take the Place of a Real Estate Agent?
The short answer: no.
While some newer investors may choose to stick with apps that offer smaller, more passive investments, it’s undeniable that having a trusted real estate agent is a smarter way to handle bigger investments and more complex transactions.
In fact, real estate investing apps may benefit real estate agents by creating a new pool of well-educated clientele who are already somewhat informed and ready to expand their portfolio even more with the help of a professional.
In other words, these apps offer a great introduction to real estate investing — or offer the occasional “quick fix,” like finding a vetted buyer for a damaged home — but they won’t replace the need for real market expertise.
