A Timeless Truth: The right tools in your hands hold the keys to your success.
I recently read the book, Martin Luther: The Man Who Rediscovered God and Changed the World, by Eric Metaxas. It is a fascinating read and one that I would highly recommend to anyone interested in the history of organized religion in general or church history specifically.
Although I enjoyed the biographical and religious aspects of the book immensely, one of my favorite takeaways was an offhand reference to a wealthy German landowner who owned rental properties. It caught my attention as a great reminder that real estate investing has been a wealth creation vehicle for more than 500 years. Generating income and equity through real estate is a timeless opportunity, and the fundamentals of the rental business are not changing.
Of course, thinking of how things are not changing also brought to mind the ways in which things are changing. Technological advances are the most glaring example.
Even though investing and landlording are ageless concepts, technology constantly makes our industry more effective and efficient. New inventions, gadgets, and devices make it much easier to invest in property and to serve as a landlord. We can do things better, faster, easier, and cheaper, but never forget, as Bill Gates famously said, "Technology is just a tool."
In my experience, successful buy-and-hold investors have three tenets that drive their success: deals, financing, and management. Indisputably, technology makes the effective, profitable management of these three facets less burdensome for a real estate investor. However, without the investor, all the tech in the world is just a tool with no one to wield it.
Technology Improves Our Access to Deals
Technology provides broader, deeper, quicker access to deals. Tools such as Zillow, MLS, Craigslist, Redfin, and Trulia make finding properties very simple. Roofstock is a recent addition to this crowded field and is continuing the pattern of advancing the ease with which investors can buy rental property.
Evaluating deals is now cheaper, easier, and faster thanks to technology. Online data sources such as House Canary, RentRange, and CoreLogic make comparing properties much easier than driving by them or relying on real estate professionals or public record sources for information.
Closings are simpler than ever before thanks to technological advances such as email, wires, dotloop, and DocuSign, which allows electronic signatures.
There is no doubt that technology will continue to make the deal side of real estate more and more efficient for investors.
High-Tech Financing Improves Our Access to Funds
It is much easier to find lenders through websites, online advertising, and social network recommendations. Similarly, online applications make the approval process very user-friendly.
Once a closing takes place, monthly payments can be made through various channels as well.
In summary, we live in one of the greatest times in the history of mankind. Technological advances are happening all around us, which helps get things done more efficiently and more effectively. But, the fundamentals of real estate investing are not changing nor are the key components of property management.
Remember, technology is simply a tool to assist you in accomplishing your wealth creation and wealth preservation goals. I am sure that is exact message that a 16th-century German landlord would share with us today.
Tech and AI are Changing the Face of Real Estate Management
For buy-and-hold investors, the four fundamentals of property management are always going to be:
The two biggest technologies affecting leasing are self-showing providers like Rently, ShowMojo, and Tenant Turner as well as virtual assistant companies like Virtually Incredible and YesVIRTUAL. These technologies are making the leasing process incredibly easy for prospective renters and making leasing agents a thing of the past.
As for collecting rent, payment options now abound thanks to technology. Tenants can pay their rent online directly through processors such as Cozy or they can pay cash at their convenience using options like PayNearMe. These improvements are giving renters more flexibility and landlords more time.
On the maintenance side, the introduction of 3D camera companies like Matterport are making the management of properties easier than ever. Similarly, the Internet of Things (IoT) companies like Nest are drastically changing home features such as thermostats and alarms. IoT is going to continue to make life better for property owners as well as their residents.
Lastly, property management software platforms such as Propertyware, AppFolio, Rent Manager, and Buildium have made the administrative burden of property management much less cumbersome. Workflows, documentation, communication, and data are all stored online and in the cloud. It has never been easier to be a landlord.