If the only constant is change, get ready for a wild ride. Market-driven disruptions were once occasional features in the real estate investment landscape, but evolving trends and transformative technologies have reshaped real estate investment opportunities much more frequently in recent years. Although most investors are now familiar with virtual showings and tools for managing rental properties remotely, here’s how other innovations are transforming the future of real estate investing.

AI for property analysis

Property technology, also known as proptech, can make the process of buying and selling real estate easier and more efficient. Proptech includes artificial intelligence tools, as well as virtual and augmented reality tools that allow investors to explore a property without stepping foot through the door.

To find lucrative opportunities in a competitive real estate investment sector, investors may spend months researching a property’s history and its potential for profit. If the market becomes competitive, spending months evaluating a potential investment may no longer be possible. Smaller investors won’t stand a chance against large companies with unlimited resources at their disposal.

AI levels the playing field and allows new or small investors to compete against more seasoned and well-resourced firms. Platforms that automate property analysis can provide just-in-time risk assessments and predict rental yields and relevant market trends.

Artificial intelligence speeds up the initial review and assessment of a property’s potential, making investors more agile and able to move quickly when an opportunity arises. But an investor’s research should not end with AI. It’s critical to combat misinformation by evaluating each property and considering whether it’s a good investment based on personal goals and risks.

Smart-home technology for greater home control

With AI habit learning and automation innovations expected to become more popular in 2024, smart-home control continues to dominate the real estate investing space.

Simple smart-home tools are especially attractive to young tenants and first adopters, but they are also great for investors who want to manage their properties but don’t have the ability, or desire, to live on-site. Smart-home tools also make it easier for investors to respond in an emergency — even remotely.

Smart locks are just the beginning. Smart security systems keep tenants safe and reduce the risk of property damage or other crime. Thermostats that can be adjusted remotely or programmed to adapt to current conditions save money, optimize the use of resources, and keep tech-hungry tenants happy. Other smart-home features, such as awnings and window coverings that open and close depending on weather conditions, provide convenience and protection for properties and tenants alike.

Blockchain for secure transactions

In 2023, 694 data breaches compromised 612.4 million records. The largest — a hack of X, formerly known as Twitter — accessed 220 million records. It’s understandable if property owners are wary of turning over their most significant investments to digital tools.

The threat of a data breach isn’t deterring people from investing, but security is always an issue. Blockchain for secure transactions aims to give investors more confidence.

The term is most recognized as a trading platform for cryptocurrency, but real estate investing uses its tools in much the same way. Using computer networks, a blockchain transaction is more secure and trackable, making it less likely to corrupt or compromise. This eliminates vulnerable digital application forms or barely secured transactions.

A typical blockchain real estate investment might be conducted as follows.

  • An investor makes an offer that’s accepted. The seller requests money over the blockchain.
  • The request is processed across a network of computers (nodes).
  • The nodes use algorithms that are predetermined to process the request.
  • The request is authenticated using verifications set by the seller and investor.
  • The verifications are completed, the request is permitted, and an additional chain in the data string is created. It’s the reason for the term “blockchain” – blocks of data are strung together and inseparable from each other.

A blockchain transaction seems arduous and time-consuming, but it occurs instantly in a much safer and more secure manner. Once the new string of data is created, it cannot be altered, hacked, or changed in any way, and it does not allow entry into any other area of the computers that created it.

Although this might be a bit intensive for new or small investors, large-scale and institutional investors benefit from this extra security. It eliminates the threat of digital invasion perpetrated through an exchange of funds. Hackers cannot get into the investor’s system to wreak havoc in all areas of their business.

Crowdfunding for hassle-free investing

Another considerable disruption is real estate crowdfunding. This type of real estate investing is akin to investing in the stock market, with each investor buying a “share” of a property. Not only does real estate crowdfunding ease the strain on an individual investor’s initial expense it also divvies up ongoing expenses and removes the need for hands-on property management. It’s an excellent option for new investors trying to determine where to start investing.

Virtual real estate for greater accessibility

The final frontier in innovative real estate investing is the metaverse, where investors own pixels and digital parts of an online world with its own communities and social interactions. Investing in the metaverse works in a similar way that investing in real life does. Investors own unique pieces of property that can be leased or used interactively for a fee. These generate income, just as a physical property would. Investments are backed by non-fungible tokens that guarantee ownership.

It’s a challenging concept — investing in something you can’t touch or move into — but the truly adventurous are jumping into this virtual investment opportunity with both feet, snapping up the currently limited supply of property in the metaverse.

  • Luke Babich

    Luke Babich is the Co-Founder of Clever Real Estate, a real estate education platform committed to helping home buyers, sellers and investors make smarter financial decisions. Luke is a licensed real estate agent in the State of Missouri and his research and insights have been featured on BiggerPockets, Inman, the LA Times, and more. Education: B.A. with Honors, Political Science — Stanford University

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