Economist, Edward Learner, once said that housing IS the business cycle. Yet, despite the centrality that housing, and more generally, the real estate market, has, the real estate market is not often a major source of innovation. The pandemic changed all that, as it forced the real estate market to embrace some very bold innovations. Here are 3 innovations, tokenized real estate investments, virtual tours and contactless interactions, that other businesses really should learn from.
Tokenized Real Estate
Blockchain technology is one of the most disruptive technologies of our time. Blockchain is particularly linked to cryptocurrencies, some of which, such as bitcoin, have earned investors incredible returns. However, investing in cryptocurrencies means accepting never having any cash flows unless you decide to sell some of your cryptocurrency. Tokenized real estate investments provide investors with the same security and privacy of blockchain, with the cash flows associated with traditional investment vehicles. In exchange for an investment, you’re given a token representing a portion of a real estate deal. The token is stored on a blockchain and is easier to trade than a traditional syndicated real estate deal. The liquidity of these tokens has made real estate investing much more accessible. For industries looking to expand access to their investment opportunities, tokenized investment deals offer a path forward.
Virtual tours of homes and commercial properties allowed the real estate market to continue operating throughout the dark days of the pandemic. Although the technology had existed for at least a decade, it took the pandemic to get people to use the technology that made virtual tours possible. Virtual tours mean that buyers only need to travel for the last mile of a deal, when they want to get a feel for a place, imagine what it would look like with new Full Coverage Painting & Flooring, walk through the rooms, and verify everything they saw on the tour. Even as the pandemic fades, virtual tours are still useful, with potential buyers realizing that they don’t have to travel long distances to see properties. The result is that there are more buyers that real estate agents can reach out to, and they can turn their focus away from arranging visits, to more value-creating activities.
Health concerns brought about by the way that Covid-19 was transmitted, forced businesses to put their consumers’ health and safety at the center of their business model. One key innovation to mitigate risk was the development of technologies that made contactless interactions possible. Virtual tours are, of course, one aspect of this, but the range of contactless technologies extends far beyond virtual tours.
For instance, you can now fulfill most if not all of your regulatory and contractual obligations online. For example, Mercury Insurance partnered with Flyreel to develop a contactless home inspection app to its policyholders in New York, and New Jersey. Not only has this reduced the health risks associated with contact, but, it has also shown that meaningful economic activity can be undertaken without having people meet in person.