Three Ways Real Estate Investors Can Use Technology To Make Higher Profits
Founder & CEO at CM Square, a company delivering PropTech and AI services for Asia’s customers.
One question is always at the top of the priority list for professional and institutional real estate investors: How do we make a higher profit and maximize it throughout property transactions and operations? Traditionally, real estate markets are slow-moving, and managing in scale involves a huge amount of tedious works. With the increasing use of technology in our daily lives and with more data available in the public, the real estate sector has quietly transformed into a faster-moving and scalable business where people can buy, sell and operate properties with the help of technology.
Here are three ways to make higher profits in the property market by the smart use of technologies.
Source under-valued deals every minute of every day.
There are various kinds of property listing systems or MLSs in different countries and cities, but they all have one thing in common: the openness and readiness of data are irreversible trends. Computer software can search the internet every second to identify new listings, updates to current listings and understand the details of properties on a large scale. AI and machine learning engines are able to analyze a large number of property listings, compare them with similar listings and their transaction histories and accurately estimate the market price. By using AI technology, real estate investors can search for properties that are under market price 24 hours a day and move faster than other potential bidders. The lower acquisition price certainly results in a higher profit in a transaction.
Optimize property management, maximize operating income.
Software-as-a-service (SaaS) is a lightweight, easy-to-use option for institutional investors to optimize their property management operation for a higher profit. SaaS helps investors to digitize investment and tenant agreements, set auto alerts for expirations, keep track of rental income and operating costs and optimize the use of space. SaaS also helps real estate investors to analyze tenants’ payment patterns to minimize late payments and improve cash flow. Real estate investors can now spend more time refining purchases and disposition strategies or optimizing rental prices rather than busying themselves with paperwork.
Sell and rent at a better price.
AI technologies can not only search for properties that are under market price but also keep track of the property performance along with its age and economic and financial changes over time. By learning the relationship between the property market price and the economic as well as financial data from the past, AI is able to predict the property market price and rent both now and for the future. Real estate investors can make a smarter and more informed decision regarding selling their properties ahead of the trends or adjusting rental earlier, and at the end of the day, maximize the profit. On top of that, some advanced AI technology can make renovation recommendations, by predicting the updated market price and rent with different property conditions and layout. The ROI of the renovation becomes crystal clear, before even beginning any kind of construction, so the investor can make an easy decision for the renovation before putting the property for sale or for rent in the market.
Nowadays, the above technologies and software are becoming very handy. But one thing to keep in mind is that this software is very much being built to fit the local market for better results. You should search for local providers and build your own business case for adopting some of these technologies, and be ready to win in the new digital age.
Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?