PropTech Advancing Towards High Returns Zone

By StartUp City | Tuesday, October 08, 2019

A mine of opportunities is the sector of PropTech. With informed decisions and some development, the field will reap more than what has been sown

Fremont, CA: $20 million was the number of investments PropTech had in 2008; after only a decade, the sector now has a whopping $12 billion investments. With the introduction of highly valued apps attracting the major venture capitalists, the buzz around PropTech is becoming more frequent with each passing day. 

The latest wave of PropTech 3.0 has presented opportunities that are disrupting real estate and its underlying fundamentals on which the industry functions. The third wave is the most exciting phase of Proptech, which has enabled growth among startups to a level where it stands challenging the very fundamental principles. With the future dependent on it, the prospects the industry brings are countless. Some of its popular openings for solutions are:  

• Mortgage Tech:

Mortgages are time-consuming, complicated, and extremely paper-oriented; it is ready for a tech intervention. By bringing together the buyers, sellers, agents, lenders, and property valuers into a common platform, the lagging in the loan process can be reduced significantly. It is a great time to start digitizing the process, as several thousand vendors across the globe are started embracing the change.

Between the tedious process of renting and owning, the co-ownership models can disrupt traditional mortgages. These models dictate some changes like the occupier can deposit some equity to own a percentage of the house and will pay rent proportional to the remaining capital. The homebuyer has the option of investing more in the house in comfortable factions, and the tech associated with it will automatically facilitate valuation. By conducting the automated valuation process immediately, human errors can be avoided, and the transparency in the percent of ownership is assured. 

Check Out: Top Construction Technology Companies

• Tokenization:

Tokenization of real estate involves fractionalizing the ownership of physical assets digitally on to a blockchain. The benefits of this process are innumerable, with the most important one being the ease of liquidation. By implementing tokenization, the assets will be open for investments in retail, allowing revenue flow. The investors can invest in a part of the building, without having to shed more equity. With increased transactions of lower amounts, blockchain can adequately handle the finances. 

Crowdfunding platforms have been around in real estate for quite some time. It has catered to the niche accredited investors only, with the increased attention on the sector, the idea has the potential to build interactive public real estate startups. These exchanges encourage more participation, allowing quick ownership transfers at the end of the fingertips and a low cost. The crowdfunding platform will not only enable the creation of an enormous, liquid, and highly transactional market of real estate interests but also radically alters the perception of the industry. 

• Housing as a Service:

A refreshing tide of technology-based platforms will facilitate the implementation of real-estate as a service. The service efficiently utilizes the living and working spaces while also increasing the connectivity and social collaborations. Co-living is a new way of living among students, young professionals, and first-time renters. The trend of independent living without restraints have increasingly resulted in abandoning the idea of asset ownership to move towards an on-demand economy. Housing is continuously transforming from a valuable asset to a product, and lately, it is a service, which the tech companies are eyeing on. This acquisition will optimize the processes in real estate in the same way e-commerce optimized shopping. 

Weekly Brief