Some people are slower to embrace change than others—And that’s not necessarily a bad thing! In real estate, change tends to come slow. For the most part, the same rules have governed how we’ve done things for decades, with a few adjustments here and there.
But as technology changes, real estate does, too.
Now more than ever, we have data at our fingertips and ways to manage our finances, properties, and day-to-day businesses through technology. It’s not so much about the newest app or the newest model of smartphone, though those do offer brand new resources for real estate investors to increase their efficiency. It’s about how technology creates opportunities to innovate—ways that weren’t there before.
The changing landscape of real estate technology is something investors should think about on a bigger, broader scale: how are new innovations, new startups, and new technologies changing how we do real estate on a grand scale?
New Technology, Methods, and Why They Matter
The worst thing real estate professionals can do is ignore emerging trends in real estate: whether that’s pretending real estate crowdfunding is a trend that has no consequence, or that technology’s increasing push towards transparency doesn’t affect the industry.
We see it happen in other businesses. Hotels won’t utter AirBnB. Taxi services begrudge Uber. High-end clothing companies blame low sales on society rather than pointing to emerging and innovative online rental services like Rent the Runway and Menguin.
These industries want to make excuses for falling behind rather than keeping up with the innovations that are right in front of them.
The fact is, the world is changing, and real estate is no different! So how do investors navigate the changing landscape? What trends are worth getting on board with? After all, we don’t want to just jump on the bandwagon. Not every trend will be successful or sustainable.
3 Ways to Embrace Real Estate Innovations and Maintain a Solid Strategy
1. Go in with a Game-Plan
If you’re interesting in tapping into a new real estate trend (crowdfunding, for example), a plan is your best friend. Innovations are exciting because they’re new, but that also means they come with a lot of risk, and a much of it is probably un-calculated and unforeseen.
Innovations are best tested by experienced investors who have a the cushion and the means to recover should things go south. You don’t want to sink your finances into a gamble like that—not until this new strategy can prove itself. Don’t play with your real money. At least, not at first.
Set limits for yourself and know what exactly you’re going to do if things don’t pan out the way you’d like. Can you absorb those losses? What are you next steps in face of success?
2. Don’t Jump on Every Trend
Let’s keep using crowdfunding as an example. We can agree that things like apps and programs are all pretty harmless to test out and try for your investments, even if they cost you a little bit. But when it comes to your actual investments, not all platforms are created equal.
For example, the concept of crowdfunding has proven itself to be profitable in real estate, but thousands of platforms and startups for real estate crowdfunding are cropping up to capitalize on the trend. Not all of them have a sustainable model. In the same way, not every trend or every one trying to make money off of that trend is going to be successful. You don’t want to hop on every trend or just anyone capitalizing on it.
As investors, we have to use our discernment. How? We turn to the proven strategies of the real estate business and time-tested knowledge. Yes, new things can work. But even new things still need to pull and build on old wisdom.
Do your research. Wait to see is these fledgling ventures can hold their own, or at least if their strategy makes sense in the broader context of what we already know about real estate investing.
3. Keep an Open Mind
Do a lot of these ideas sound off the wall to you? Plenty of them do! The best way to embrace new trends in real estate technology is simply to accept that these new ideas could work. They might not, but there’s a possibility that they could.
Keep up with these trends. Read up on them, accept the possibilities. It’s about keeping an open mind to what could be while also staying grounded in what we already know works, and what strategies have proven to stand the test of time.