Will Technology Make Real Estate Investing Less Risky?
From mobile apps that can help you rent out your space to finding a new home just by scrolling through your social media feed, technology is rapidly changing real estate transactions and investing.
In fact, it's easier than ever for buyers, sellers and even real estate agents to speed up the marketing and transaction process with the help of apps and other technology
, and there are no signs of slowing down. Now, real estate investors (or those who want to be) are reaping the benefits of technology, too.
To prove this, a recent article from TechCrunch
reported that Sundae, a new SaaS startup that 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.
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 is 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.
McKissock Learning is the nation’s premier online real estate school, providing continuing education courses and professional development to hundreds of thousands of real estate agents across the country. As part of the Colibri Real Estate family of premier education brands, McKissock Learning, along with its sister schools Real Estate Express, Superior School of Real Estate, Allied Schools, The Institute for Luxury Home Marketing, Gold Coast Schools, The Rockwell Institute and Hondros Education Group, helps real estate professionals achieve sustainable success throughout each stage of their real estate career. Learn more at mckissock.com/real-estate.
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