Investment opportunities in real estate have become more challenging to identify and manage in the wake of the Covid-19 pandemic. Some real estate segments, like industrial and residential property, benefited tremendously from the pandemic but have since become more expensive and potentially less attractive to others. Others, like offices and retail property, are gradually starting to recover.
However, with the uncertainty of rising interest rates and a deteriorating global economy, it’s not easy to know where to invest in real estate. But savvy investors who do manage to identify the opportunities stand to make a lot of money.
Commercial real estate professionals interviewed for a PWC Emerging Trends in Real Estate 2023 research report were cautiously optimistic about the longer-term prospects for real estate. They are prepared to ride out any near-term slump in property markets to ensure they are well-positioned for what they expect to be another period of sustained growth and strong returns.
PWC noted that a reset in real estate presents new opportunities for investors, even if it does introduce uncertainty. Identifying those opportunities is made easier by fintech, which is revolutionizing the real estate investment industry at many levels.
How technology can change real estate investment
Fortunately, fintech solutions in the real estate industry have the power to upend the traditional way of doing business and help investors navigate the short-term uncertainty and seismic shifts in the industry, ultimately achieving sustainable long-term returns.
Fintech has been disrupting the real estate investment business as it has the banking sector. Traditional real estate has always been labour intensive and price discovery has been opaque because the physical property doesn’t trade on an exchange. Shifts in the different segments of the real estate market and property valuations are also extremely complex and difficult to monitor.
Fintech is changing that by tapping into technology like AI, machine learning, big data and cloud computing to resolve these challenges. In doing so, it is paving the way for real estate investors to make more astute, lucrative and sustainable investments in the industry.
Benefits of fintech integrations for real estate investment funds
The technology that underpins Fintech solutions, namely big data, cloud computing or artificial intelligence, matches the functionalities needed for a future-fit real estate industry.
Crowdfunding
Crowdfunding has profoundly disrupted how investors raise capital to make investments across asset classes, including real estate. Investors can now pool their funds on a fintech platform, which leverages the amount individuals or groups of individuals can access to invest in real estate, be it multi-family dwellings, industrial, office or retail property.
With interest rates increasing significantly and the US banking system, particularly bank lenders that specialize in funding commercial real estate, under strain, crowdsourcing promises to provide much-needed access to funding for real estate investors.
Underwriting
Fintech machine learning and AI capabilities are put to good use in the underwriting process, during which real estate investors verify income, assets, debt, and property values before they approve a deal. Not only does the technology provide an accurate assessment drawing on extensive data sets, but it also reduces the time and costs typically incurred in a traditional real estate setting.
AI-powered analytics
Accurate analytics allow investors to monitor their investments, gauge if they are performing as expected, and use this information in real-time to make decisions that determine whether they profit from the portfolios. Fintech enables this process, again, by pulling all the required data together in one place where the investors can make the necessary assessments and judgement calls.
By integrating the real estate fintech tools available, traditional real estate companies are much better placed to achieve operational efficiency, move quickly and proactively on opportunities few others would identify, diversify their business and generate new sources of revenue off highly reliable sources of information that are not available to competitors.
Case study: empowering real estate investment companies with modern edge technology
To achieve the full benefits of these fintech functionalities, you need to choose the right technology vendor, one that can customize the real estate investment technology platform to the customer’s specifications and integrate the different technology components seamlessly.
The system needs to have state-of-the-art security and be highly scalable to give real estate investors the flexibility to adapt to any changes in the economy or industry landscape and/or customer preferences. The vendor should also be able to build the fintech platform quickly so the customer can benefit from its functionalities as soon as possible.
One customer that has recognized the power of incorporating fintech capabilities into its investment offering is ResClub. ResClub is a membership-based investment company that provides members and investors with a fixed annual return and the option of vacationing in ResClub vacation homes and hotels worldwide.
ResClub has selected Velmie to launch its platform for providing fund management, payments and crypto exchange services for ResClub members.
Craig Shawn Williamson, CEO at ResClub, shared some details of the new project goals: “As an investment, travel, and marketing company, our thousands of investors and members send and receive payments with us on a weekly and daily basis worldwide. Additionally, we have observed a large and growing segment of these payments being made with Cryptocurrency. We needed a private, 24/7 payment gateway, banking and investment that serviced many needs.”
ResClub built the new platform on top of Velmie banking software, utilizing the available modules and components to fast-track its go-to-market strategy with the new product offering.
Craig Shawn Williamson, CEO at ResClub: “After speaking with many experts, we knew that we needed some fundamental banking and asset exchange systems and many custom-crafted features. The collaboration with Velmie is to address all the fundamentals like security, transactional ease, speed, and easy integration into our ecosystem. We look forward to launching this private service to our investors and members.”
Velmie was well-placed to meet ResClub’s requirements with its bank and fintech software platform, which has all the features needed to build an end-to-end next-gen real estate fintech platform that meets their specific needs.
Velmie’s technology is composable, which allows for configuring unique features and integrations that align with ResClub’s needs. Its software platform is Cloud-agnostic and can be deployed in Kubernetes clusters at any cloud hosting provider or on-premises.
Made of multiple components, Velmie allows configuring unique features and integrations aligned with your business needs. Our team handles end-to-end delivery, training and support so you can focus on your customers.
Security is assured with Velmie’s single-tenant delivery approach in which client software is run in isolated environments. Customers also get access to advanced orchestration technology to seamlessly manage API integrations, with smart routings between multiple endpoints.
Conclusion
Fintech has the potential to revolutionize the real estate investment landscape by improving operational efficiency, enhancing tenant experience, and enabling companies to diversify their business and generate new revenue sources. Velmie's expertise in fintech makes it an ideal partner for real estate investment companies looking to capitalize on these opportunities and stay ahead of the curve.
