Real estate investing once had the reputation of being available only to the wealthy elite, but fintech’s impact is large and quickly changing the landscape for investors. Gone are the days of ultra-rich investors and developers having exclusive access to the market. If you’re looking to get into real estate investment, there are now plenty of opportunities to build wealth with the help of fintech.
REITs
REITs, or real estate investment trusts, allow groups of people to invest in a portfolio of different properties with a minimal investment. This concept makes it easy for individuals who could not otherwise afford to purchase a real estate property to invest in the market. While REITs are not a new concept to investors, fintech’s advanced investing platforms and hassle-free account access have made it easier for everyday individuals to begin investing in real estate on their own terms.
Some REITs pay out regular dividends, while others reinvest dividends throughout the life cycle of the fund to continue building wealth. REITs are designed to be long-term, low-liquidity investments, which provide a way to build wealth over time.
Crowdfunding Platforms
Real estate crowdfunding platforms work similarly to REITs, but the investors pool their money together to invest in a single asset instead of a portfolio of properties. The fintech industry has pioneered this concept by creating websites, platforms, and apps that make it easy for investors to select a property they want to invest in.
Crowdfunding sometimes has a higher buy-in than some REITs, with a host of companies requiring a minimum investment of $25,000. However, crowdfunding does make it possible to invest in large-scale assets, such as luxury high rise apartment buildings, commercial warehouses, and other high-ticket real estate properties.
Online Real Estate Marketplaces
Perhaps one of the biggest impacts fintech has had on real estate as a whole is the creation of online real estate marketplaces. Websites you may already be familiar with, such as Zillow and Redfin, have changed the way individuals purchase homes and the way individual investors look for potential properties. Before these platforms existed, people looking to purchase property could typically only access listings through a real estate agent. Now, anyone can browse online, narrow down the list of properties they’re interested in, and book a viewing with just a few clicks of the mouse. This has made it easier for families looking to purchase a new primary residence and investors looking for properties to flip on the market.
Property Management Software
Real estate investors need simple ways to manage their properties and track their investment status. Property management companies have always filled this need, but fintech’s impact with property management software innovations have significantly improved the ways properties and investment income is managed. The software can tabulate and run reports, including profit and loss statements, to make tracking a property’s performance easy. It can also improve the lives of tenants, allowing them to pay rent and request repairs online. Improved tenant experiences can lead to lower turnover and better profitability for an asset. The best property management software can make real estate ownership a hands-off investment option for individual investors and investment groups.
How Fintech in Real Estate Can Benefit You
Fintech’s impact on the real estate investment world is vast, from making it easier to invest to simplifying the process of managing an asset. Instead of having to work through a broker or agent, individuals can seek out and begin investing in real estate trusts or single assets they believe in all on their own. Online platforms and intuitive apps have brought real estate investing into the digital age, and people from all experience levels can benefit from this new technology. Whether you’re a first-time investor looking to begin building wealth or you’re an accredited investor seeking out new ways to diversify your portfolio, there’s a fintech innovation to help you meet your financial goals.