For years, the real estate industry lagged in technological innovation and adaptation, but fortunately this is changing. In an effort to bring the industry into the modern age, venture capital firms have significantly increased allocations towards property technology, or “proptech.” In fact, according to RE:Tech’s 2017 Annual Report, VC infusion of capital in real estate technology skyrocketed to $12.6 billion, representing “a 92 percent increase in global investments, the largest fiscal year in real estate tech history.” This progress bodes extremely well for both large and small real estate investors alike. Below are just a few of the game-changers in proptech, and we examine how they can help you become a smarter real estate investor.

The Hunt

When you’re looking for the perfect investment property, data is key.  In addition to what you would typically find in MLS, these online platforms provide information on comparable properties in surrounding areas. For example, they often give the price per square foot, area demographics, sales values for similar properties, and other valuable information you won’t find on Zillow.

  • Reonomy will tell you about the previous owners, recent sales in the neighborhood, the existing debt on the property, and historical taxes.  It offers a free one week trial, and plans range from $49 - $399 per month (depending on the filters and level of data you need).
  • CREXi is a virtual marketplace dedicated to commercial investment properties.  With over 65,000 listings, this platform makes it easy to pull market intelligence which would take hours to gather yourself. Access to the database is free, but for $79 / month you can access comparables for four property types across 50 markets.

Funding

Now that you’ve found the perfect property, it’s time to finance your deal.  There are several lenders with online platforms; however, it’s crucial to pick the right one.  Large lending companies typically use standard formulas to calculate their loans, and often don’t take the time to fully understand the borrower’s needs.  On the other hand, a good private lender will work side-by-side with their borrower to quickly and efficiently craft a deal that best suits their borrower’s needs.   In our opinion, there are many benefits to working with a private lender even beyond just the specific deal. Building this relationship with industry experts is incredibly advantageous as they can offer you guidance and advice that will help you grow as a real estate investor!

Construction

While most proptech companies for building and construction tend to focus on larger projects, HomeAdvisor is an excellent tool to find local professionals to help with renovations. Whether you need a bathroom remodeled, a roof redone, or a garage door installed, this easy-to-use platform helps you find and compare the top-rated service providers for any project in your area.

Rental Management

While some real estate investors focus on a quick fix and flip, others may choose to manage the property for a period of time before disposition. Once your new investment property is renovated and you have found suitable tenants, your focus shifts to asset management.  There are several platforms that will help streamline your monthly processes and manage the property with maximum efficiency.

  • Stessa is a free online tool that allows you to manage your rental properties online.  The platform includes a reporting dashboard, tax ready financials, and income / expense tracking – all with bank-grade security. Stessa offers a quick snapshot of exactly how your properties are performing, has a user-friendly interface, and has more built-in features than your Excel spreadsheet.
  • Domuso simplifies rent payments and streamlines rent roll tracking.  The platform can be easily integrated into your current property management system, and is cheaper than most other alternatives such as ClickPay, Stripe, and PayPal.

IoT Technology

When you’re building your new investment property, it certainly is worthwhile to invest in Internet of Things (IoT) technologies to create a modern, digitally-connected property. For anyone unfamiliar with the term, IoT is just a fancy way of saying that you can control your lights, locks, climate, and other connectable devices through your smartphone.

  • Nest is a hardware technology company that makes smart locks, cameras, and thermostats.  The company was acquired by Google so you can be sure that you will have top-end smart home options for your renters. Not only is this technology efficient, but also it’s easy to use with a well-designed interface.
  • Ecobee is a smart thermostat that enables users to  control the temperature of their home on their smartphone. The app uses the local weather to adjust the temperature of your home – maximizing comfort in the least amount of time. Additionally, the system notifies you when something is wrong with your HVAC and heating systems.
  • Ring is a smart doorbell with a built-in video camera.  It’s motion activated and sends alerts to your smartphone so that you can see and talk to the guests at your front door, regardless of where you are.  Of course, this may seem like a fun tool to greet your local mailman or neighbor, but it also increases the security at your property because it can identify unwanted guests before they enter your home.
  • SimpliSafe provides high-tech security through a wide range of cameras and motion detectors that are easy to install.  It is generally cheaper than most other security options because it eliminates the need for a middleman, as you control everything through your smartphone.

These are just a few of the many different proptech options that you can employ to create a more efficient project.  Please note that we are not affiliated with any of these companies, and the information above should not be viewed as a recommendation for any of the tools mentioned.  There are new proptech firms emerging every day, and you should do some research and leverage the ones that fit your needs best. That said, these tools can only be utilized once you have the financing you need for your projects.  To learn more about whether and how and we can help, contact us at contact@rdadvisorsre.com and we’ll set up a time to chat.

This article is written for information purposes only and is not intended to be relied upon by any party without their own independent analysis. The opinions expressed and other content of this posting may change at any time and without notice. This information is not to be used or considered as an offer to sell, or a solicitation of an offer to buy, any security or the provisions of an offer to provide any services. In addition, the information shall not be considered a recommendation for the content of any website or to purchase any other product, service, or investment. Nothing in the above constitutes any offer to provide a loan or other financial product or a commitment to do so or to discuss providing such products. Our loans are not for everyone. Final approval for our loans is subject to satisfactory due diligence, background and credit checks and general credit approval, which depends, among other things, on a determination in our sole discretion that the loan fits our Fund’s investment strategy and portfolio and is generally a good fit for us.

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