Wednesday, 13 December 2017

Five Trends That Are Reshaping the Real Estate Industry

Written by Posted On Wednesday, 06 December 2017 17:32

Technology is transforming the current world of business, and real estate is not an exception. Most of the trends sweeping across the sector are technology driven and are a force to reckon with. The following are five of the major trends that are reshaping the industry.

1. Smartphone applications

Modern technology is slowly getting rid of older software that was used to market businesses. Smartphone applications are now embraced by a majority of the people who use them on a daily basis. Real estate is a mobile industry whereby leasing agents are known to spend most of their time in their field. There is demand for an increased mobile support to enable them to manage their businesses. Even though there has been no dedicated mobile technology to be used for the commercial real estate industry, developments have been made in the past year. The past 24 months have observed a wave of mobile applications in an attempt to improve the business. Home automation is one of the technologies that have been invented to enable homeowners to manage their property without the inconvenience of their location.

2. Short term rental investing

The profits being made by local hotels and motels has contributed to the rise of short-term rental investing. Investors, however, need to calculate their decisions before embarking on such risky business. Revestor is a search engine that has been developed for calculations such as potential returns, giving predictive analytics to the investors. The engine compiles historical data, trends and predictions for the future to help potential investors in decision making. The information is similar to that of buying stock as it gives an equivalent of p/e ratio, dividend and market cap.

3. Use of social media for marketing

In the past, business owners have had few avenues to advertise their products. Today, social media presents an effective and inexpensive platform to reach a multitude of potential customers. Any business that plans on being successful cannot ignore the power of Facebook, Twitter, Instagram and Pinterest. Blogs are also becoming a significant platform to interact with consumers. The current consumers prefer simplicity in accessing information. The old software that was used to manage websites is bound to be forgotten in order to cater for this new generation.

4. 18-hour cities

The millennial generation is estimated to opt for 18-hour cities as they offer a lower cost of living for job-seeking individuals. The latter is also the primary potential buyers of new homes in 18-hour cities. The cities, therefore, offer real estate investors an affordable means of investment compared to that of broader markets. This trend is bound to be popular as the 18-hour cities feature lower cap compression. The value of such property tends to remain stable and does not spike up and down significantly.

Despite the widespread perception, not all millennials seek to live in high rise downtown apartments. Some of them prefer suburban environments that offer both work and leisure without the downsides of 24-hour urban cities.

5. Rise of competition from other businesses

Both traditional and emerging real estate investments are bound to face stiff competition even as the market expands. There is a demand for walkable neighbourhoods where food, shopping and entertainment are quite accessible. Top-tier amenities are therefore needed in these new housing constructions and development. This type of competition is bound to increase as there are limited partners who emphasize better tools and enhanced visibility.

In conclusion, investors should consider how these trends the industry benefit the industry and take advantage of them. Technology, for instance, needs to be continuously upgraded to keep up with societal expectations. As seen before, the future of commercial real estate is going to be more dependent on data and technology. The focus is going to be on giving the consumer easy access to information. It is also possible for new tools to be invented in order to reduce the challenges being faced by commercial owners and investors.

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