Fintech, short for financial technology, has changed a large variety of industries, but the real estate market has seen a serious increase in efficiency and innovation in the last few years. While not all areas of real estate fintech apply to the everyday person, there are some things that have made buying a home and investing in real estate much easier.
Reduced Friction in the Mortgage Process
It can be very tedious and time-consuming to qualify for a mortgage and buy a home. Anything that can be done to reduce the friction of this process is something worth looking into. Rather than sitting down at a desk and filling out multiple copies of the same paperwork, mortgage lenders have invested in technology that allows you to apply via a website or smartphone.
This streamlines the application process. While not noticeably different than a traditional mortgage once you are approved, using a fintech lender makes everything much less stressful along the way.
When it comes to buying and selling homes, you want to make sure that your home and any other property are properly evaluated and that you know you are working with good data. Rather than complicated equations that are easy to make mistakes on, fintech has introduced algorithms that can simplify a lot of the real estate process.
Online appraisals use an algorithm to value your home. You can also use it to evaluate any properties that you are interested in investing in. Home buying companies use algorithms to find areas where property is a hot commodity and homes that they can buy at a good price to flip for profit.
Reduced Investment Risk
Real estate investment has long been touted as one of the more stable ways to diversify your investment portfolio, but that doesn’t mean that it is without any risk at all. While there is little that can be done about the risk that comes from things like natural disasters and property wear and tear, you can look into the risk that comes from market conditions and other factors. Fintech companies have developed software that can quickly assess risk in a faster and cheaper way than traditional manual research.
While the real estate market is unpredictable, one of the most predictable things about it is that technology plays a much larger role these days and that role is only going to continue to grow. Rather than sticking with what you have always done, now is the time to adapt and change so that your real estate ventures are much easier and more profitable than ever before.
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