How These Five Technologies Are Shaping the Real Estate Industry

It's perceived as an industry that is slow to embrace technological change and innovation. After all, it wasn't long ago when realtors conducted transactions manually.

However, with tech advancements and the rise of Artificial Intelligence (AI), it's poised to reform and undergo a major digital transformation. Even as you read this article, the real estate industry is changing. It's starting to adopt modern operations that streamline and accelerate negotiations and transaction execution times.

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Discover Key Technological Innovations That Are Altering the Future of Real Estate

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1. Virtual Property Tours

One of the most crucial changes in the industry is the introduction of virtual property tours. Using 360-degree video technology and Virtual Reality (VR), investors and buyers can roam through residential and commercial properties without leaving their comfort zone.

Virtual tours save time and resources and offer real estate investors and buyers a more engaging and immersive experience. It allows them to explore every nook and cranny of a house, office, or facility at their own speed and without any pressure or distraction from realtors.

This type of tour is often combined with an Augmented Reality (AR) app, which can overlay digital data onto real-world items such as architectural plans and furniture. Using both enables investors, buyers, and renters to visualise better their future home, office, or income-generating property.

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2. Smart Contracts

Smart contracts have been around since the 1990s, but they gained widespread only after the emergence of blockchain technology. Today, many blockchain-based operations rely on these digital agreements to ensure correct, timely, and transparent execution.

Nowadays, realtors and other industry professionals use smart contracts to enforce agreements and different processes. For example, this type of agreement can automatically finance purchases once buyers have completed their requirements, such as passing a home inspection or procuring the money.

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3. Blockchain

Blockchain technology is changing the industry in several ways. But before we continue, let's answer the question – what is blockchain, and how does it work?

"Blockchain is a decentralised, distributed ledger system, recording transactions across many computers to ensure integrity, security, and transparency of the exchanged data."

Now that we've clarified this, let's explore how blockchain technology affects property transactions and operations.

• Property transactions – Buyers and sellers can negotiate and transact directly without involving third parties. It saves money and time and lowers the risk of errors and fraud.
  
  
• Title Management – Blockchain-based land registries are much quicker and more reliable than their traditional counterparts. They offer a safe and transparent system for recording and safeguarding real estate titles. Moreover, they keep a more accurate ownership history, which can reduce property disputes.
  
  
• Real estate tokenisation – Fractional ownership is a relatively new concept in the industry. It's a procedure where properties are digitised and divided into tradable tokens. Each token stands for a share and is stored, sold, or bought on a blockchain network. Tokenisation allows individuals and businesses to acquire shares in real estate that were otherwise unattainable.
  
  
• Rental Management – Rental payments, lease agreements, and property governance and maintenance can be fully automated through blockchain and smart contract technologies.

Blockchain-based crowdfunding and Decentralised Autonomous Organisations (DAOs) are related concepts but have their differences, which are:

• Blockchain-based crowdfunding uses the technology to gather funds for a venture or project. It involves the issuance of digital tokens (sometimes called coins) that represent ownership. Investors use cryptocurrency to buy the tokens. Blockchain is vital in managing and facilitating crowdfunding, offering security, transparency, and programmable features via smart contracts.
  
  
• DAOs, on the other hand,  are organisations represented by a set of rules encoded as a computer program that is controlled by the blockchain communities associated with them. DAOs function autonomously and rely on smart contracts to execute decisions and regulations without the need for intermediaries or centralised governance.  They use blockchain-based management mechanisms, enabling token owners to govern collectively and vote on proposals.

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4. Internet of Things (IoT)

IoT allows developers and construction companies to design and build smart properties that can be governed remotely. It's making buildings more secure, comfortable, and energy-efficient.

Smart properties rely on internet-connected devices to optimise and automate different features such as lighting, air conditioning, entertainment, alarm systems, etc. IoT technology makes real estate more valuable and sought after, which is excellent news for investors looking to build equity.

5. Artificial Intelligence and Machine Learning

Developers, property management firms, and real estate agencies use AI and machine learning to automate tasks of primary and secondary importance. They also rely on this technology to customise experiences and make better market predictions.

For instance, some companies use AI-powered chatbots to offer their clients 24/7 support. Others have deployed machine learning into their operations to generate personalised property recommendations and better evaluate market trends.

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Where These Technologies Are the Most Influent?

As you have already noticed by now, these technologies make the most significant impact on three critical areas of the real estate industry:

• Transactions – Technology has changed the way properties are sold and bought. It makes transactions more effective and transparent. This transformation improves property dealings, making them quicker, less stressful, and more secure.
  
  
• Interactions – Real estate platforms and online marketplaces considerably simplify property scouting. They enable buyers to find the house or office building they want more rapidly. Furthermore, they facilitate developer-investor or seller-buyer interactions and sometimes even eliminate the need for intermediaries.
  
  
• Management – Smart contracts, IoT devices, and smart buildings have revolutionised real estate governance. They have also improved energy and water consumption, augmented property security, and optimised income production.

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The Bottom Line

To sum things up, while it took some time for the real estate industry to catch up on technological progress, there isn't any doubt that its future is connected to it. Developers, agencies, and property owners who incorporate these modern solutions into their operations will do more than remain competitive. They'll also be more successful, offering their clients a much greater experience when buying, selling, or renting real estate.

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