Digital Innovation in Homebuying and the Rental Market
Prior to the rise of technology, the real estate market served a small percentage of people when it came to purchasing property. Before the internet, people would most likely look at ads in newspapers or magazines in order to find houses. Most real estate investing would come from a referral or word-of-mouth either from an agent, who most likely was already known by the consumer, or a friend. Additionally, it would not have been as easy to manage properties or even purchase properties that were far from the investor. If somebody lacked access to an agent referral or an abundance of homes available in their area, their market would be very competitive and not as easy to enter.
Now, with the click of a few buttons, consumers are able to view all of the details of a home virtually. There are many more resources and tools available, eliminating many of the previous barriers to entry. Online real estate listing websites make it possible to post advertisements for rental units, further widening the opportunities available for landlords, as well. The times of calling real estate agents for prices is close to over, and the power of information is on the consumer’s side.
This is transforming the way we look at real estate and who has access to purchasing real estate or even renting. Renters and landlords no longer have limited options; these digital innovations allow people to connect from different cities and sign leases before moving. Technology is allowing real estate to be looked at from a global perspective, rather than from a limited view of the traditional market.
This digital innovation can prove to be incredibly impactful on the entire population, but especially young people. Millennials and Generation Z grew up with technology, and it plays a pivotal part in their daily lives. Most people have smartphones and apps on those devices that allow them to do a wide range of activities. By utilizing apps in the real estate market, young people can find new tools to educate themselves on personal finance and investing. Furthermore, these tools are familiar to younger audiences, allowing them to use these innovations with ease and short learning curves. Digital innovations in real estate will allow for more young professionals to invest without the hassle and better manage their future properties.
In the past 10 years, apps like Robinhood and Acorns have given the everyday person access to the stock market. This helped countless users to grow their wealth in ways that seemed unimaginable previously. The access to information on various investing strategies and risk analyses became open to the masses, and the mystery surrounding the stock market is now a barrier that is fairly easy to cross. The technology to make this phenomenon happen in real estate investing is available. Real estate investor secrets are now becoming popular online as people search for ways to house hack themselves.
Apps like Tellus are early pioneers in this market. They saw the traditional nature of the current real estate market and decided to modernize the entire process. This can be split into a few different categories: saving, buying, and managing. Online banking has seen a rise in popularity for their higher-than-average APY and rewards. Because online banks do not need the capital to run brick-and-mortar storefronts, they don’t need to collect as much in fees from their customers. Oftentimes, online banks don’t collect fees at all and can often serve their customers more quickly and efficiently than their traditional competitors. As executive of Tellus, Jeromee Johnson stated, "Users will have a space to park their cash and earn interest on their savings as they are reaching their goals.”
In terms of buying property, digital listings have been a game changer. It is now easier than ever to compare prices and features without having to visit each property. The pressure of an open house can be overwhelming, especially when you see multiple potential bidders that can sometimes lead to you placing an offer simply out of peer pressure. With online listings, you can see price ranges of neighborhoods to make sure you are getting a reasonable price and are happy with the features in the house. This saves you time as a buyer and gives you more confidence in your decision.
Managing real estate, or breaking into investing, used to be for the elite. The idea of getting a mortgage and all of the stress that comes with it used to be reserved for buying your forever home. With increased access to information online, more and more young people are able to wrap their head around the prospect of making money off of real estate and are ready to take the plunge. The process is, however, still dated in many ways. There is endless paperwork when you are purchasing, renting, and improving a property that can get scattered or lost without immaculate organization. This is where technology comes in. Apps like Tellus are there to keep all of your documents easily accessible and can even help with landlord-tenant relationships.
One of the drawbacks of the stock market is the sheer amount of risk associated with trading. Prices fluctuate on a daily basis, depending on various factors, and are sometimes hard to predict. This can lead young investors to giant losses and an unkeen attitude towards investing again.
Real estate, on the other hand, is relatively stable and almost always appreciates over time. Real estate investing could be a perfect solution for young, curious minds who are looking to grow their wealth in an environment that is more fast-paced than a typical savings account but less risky than the stock market. The younger generation might even have an upper hand in this new style of investing because of their familiarity with technology and resources on the internet. Another big plus is the ability to forget about it. You can invest in real estate and leave it be instead of checking in on it as you would the stock market.
The real estate market is going to see some extraordinary changes in the coming years. With advances in technology, buying a home is becoming accessible to everyday consumers, and the process of saving for a home will become easier than ever before. If you would like to learn more about FinTech4Good's efforts in applying digital technology to affordable and sustainable housing or would like to join us in our efforts please sign up here Digital Innovations For Affordable and Sustainable Housing Interest Group. For more information about Tellus, visit https://get.tellusapp.com/Fintech4GoodSustainableHousing