You don’t hear about real estate startups often, but keep your eyes and ears open because that’s exactly where the next successful startups will come from. In fact, real estate tech startups are already boasting success.
One of the first success stories came in 2011 when Tom Vaughan partnered with Alex Harasic to develop Rentalita. Rentalita is a startup that provides real estate agents with a database to contact potential renters. The data is derived from a one-time form filled out by the potential renter. This eliminates the need for renters to fill out an application each time they want to apply for a property.
Rentalita was just the beginning. In 2014, fourteen new real estate startups emerged on the tech scene including one that uses high definition video tours to streamline the leasing process, and another that helps businesses book office space on a month-to-month basis with the option to expand when needed.
These real estate startups are using technology to make everything in the world of real estate easier including renting, buying, selling, and even appraising.
What is real estate tech?
Real estate technology consists of the software, applications, and tools used by people involved in the real estate industry. This can include brokers, lenders, investors, property owners, property managers, buyers, sellers, and mortgage lenders. All of these professionals have been relying on technology that works but isn’t efficient enough to meet the demands of today’s world.
While real estate professionals have been using technology for at least half a century, that technology is becoming outdated. It’s not the functionality that’s becoming outdated, but rather old and slow methods of retrieving data are being left in the dust. Technology has the power to automate almost any process you can think of, and the real estate industry is finally benefiting.
Real estate needs more automation
If you’re considering a real estate startup, you’re already thinking in the right direction. If you’re an experienced property investor, you have the experience to engineer the automation of the cumbersome aspects of buying and selling property. The best innovations really do come from people with experience because they know what problems need to be solved.
If part of your startup plan involves buying property, even as a short sale, make sure you know if you’re going to be legally considered a landlord (even for a brief period of time) so you don’t make any legal mistakes.
Automation takes the pain out of buying and selling property
Many processes in real estate are already being automated. For example, with technology like Bowery, you can leverage the power of big data to formulate accurate property appraisals faster than ever. It’s no longer necessary to manually document data and crunch numbers on a calculator. Bowery creates appraisal reports from scratch by accessing multiple data sources including public records.
Real estate tech is getting heavily funded
The possibility of automation is inviting more startups to be created in every area of real estate from property management to fintech. The best part is that they’re getting funded.
CBInsights reports, “2016 was a banner year for real estate tech with over $2.6B in funding to the category across 277 deals. At the current run rate, 2017 could very well reach another consecutive funding high, even as deals are on track to come in slightly below last year’s total.”
According to Forbes, in 2016, six real estate startups received venture capital funding, including the real estate crowdfunding platform, RealtyShares.
These startups aren’t just centralized in Silicon Valley, as one might think – they’re spread out across the world, proving their impact is going to be revolutionary and worldwide.
Real estate is a gigantic, lucrative market that will only get bigger as technology swoops in to streamline its processes. If you have the opportunity to be part of a real estate tech startup, it’s an opportunity you don’t want to pass up for anything.