Real estate is just one of many industries that will go through big changes in the next few years. These changes will be caused by advanced technology that will enable even the smallest startups to offer valuable propositions to their clients.
New real estate companies completely changed their business model. They use social media and SEO as their prime marketing channels and often the whole company is made around one successful mobile app, made for connecting buyers and sellers, or renters and leasers.
In this article we will investigate business models that new real estate companies use, and the ways they are changing the real estate market. In addition to this we will pay close attention to startup eco-system and changes in commercial real estate market, which are caused by emergence of hundreds (if not thousands) of these fast growing companies.
Use of latest technology
One of the main goals for most startups that are doing business in real estate field is to upgrade client’s experience and make real estate purchases or leases much less difficult and time-consuming. Many of these companies tend to automate the process of property search.
One of the most important ways new startups changed real estate market is by enabling buyers and leasers to find properties online. This way they make buying and leasing processes much less time consuming. Real estate apps often provide detailed imagery and a lot of information about the property, which means that buyers and leasers can only visit properties they really like.
Even with all this information, real estate buyers and leasers still hire buyers agent companies. Since they are already browsing properties on their websites and apps, buyers are usually choosing companies that developed these smart real estate catalogs, which turns these apps and websites into one of the most important promotional tools for real estate companies. In some cases real estate companies put all of their time and expertise into developing smart real estate apps, and then add mediation services as a side-product.
Coworking is shaping commercial real estate market
In the last decade we are seeing a huge increase in the field tech-related small business enterprises. New companies don’t need huge office-buildings with long hallways and conference rooms. In most cases one or few desks with computers and one meeting and projector room on a dozen startups will do the trick. Most of these firms start working from entrepreneur’s homes, but since this type of work environment comes with many disadvantages, entrepreneurs decide to shift their companies to co-working places.
Currently commercial real estate is surviving co-working renaissance, where many real estate companies are mediating between landlords and co-working companies. Since most co-working companies are signing expensive long-term leases, real estate agencies can earn huge commission on these types of business deals. There is also a large investor interest in building and renovating future co-working spaces, and some real estate companies even decided to renovate and equip spaces on their own and sell or lease them to various co-working clients.
This type of leasing arrangements will definitely change future leasing contracts and disrupt traditional leasing standards and methods. Soon enough, co-working companies will start offering value proposals to property owners and start partnering with them on a large scale. In these deals real estate agencies will become mediators and sometimes even partners and investors, which will further diversify their portfolios and bring them additional sources of income.
Although democratization of real estate information was seen as a disaster by traditional real estate agents who still rely on pen, paper and Excel, new real estate startups see it as a huge opportunity for gaining commission profits by providing top-quality customer oriented service. Real estate market is currently opening to the public, and only the companies that are able to follow new tech trends and provide the best customer service will make use of opportunities that follow this process.