Authored by: Linda S. Koffman
The commercial real estate industry is on the brink of disruption. Even though it is one of the oldest industries in the United States, it has lagged behind other industries in terms of innovation. This is particularly true when it comes to adopting technology. Internet and mobile technology is reshaping the real estate industry and this is a huge opportunity for innovators. The size of the commercial real estate industry is roughly the size of the U.S. stock market (estimated at $15 trillion dollars). Real estate investors rely on the Internet daily, yet many have been reluctant to take the time to understand how they can integrate technology innovations into their real estate investment business. Virtually every segment of the real estate business (including identification, analysis, acquisition, financing, maintenance, repositioning, disposition, property management, and investment) have been significantly impacted by technology – positively for those who choose to take advantage of technology, and negatively for those who don’t.
For example, Domuso.com launched an online platform to streamline the rental process for the multifamily industry. By using this platform, the owner can now act as a direct lender to their renters by covering their move-in costs, which can include first month’s rent, security deposit fees, pet rent, last month’s rent and any other related charges. Most of the time move-in payments are required to be by cashier’s check or certified funds, which means a trip to the bank. For some renters, it isn’t easy to come up with these initial payments. There is a large portion of renters who can afford the rent but can’t afford the actual move. Domuso.com’s software allows renters the convenience of financing their move at a low rate, without the unnecessary steps in a cash-based transaction.
Domuso.com is a concrete examples of how real estate investors are leveraging technology platforms to identify and invest in quality deals, manage investments, mitigate loss and risk, develop more accurate financial and risk analysis, and apply predictive modeling for investments and portfolios to achieve higher returns. Companies and individuals that are not aggressively leveraging technology in their real estate investment businesses cannot compete with the companies and individuals that do. Some real estate investors think that because they are dealing with a piece of real estate, and that because they have a track-record of “picking winners” that they can get-away with not actively using the latest tools in the operation of their investment business. (Commercial real estate is, after-all, a “relationship-based” business.) Sadly, they cannot. In reality, they are losing deals to the investors that are leveraging technology to gain competitive advantages.
Are you a real estate investor or property owner? If so, are you leveraging these technological resources?