Augmented reality is the latest tech innovation that enables someone in front of a device screen to feel like their physically inhabiting the image they’re running their cursor over. It’s brought new depth and excitement to gaming, but it’s also transforming the way advertisers connect with consumers. While some Industries are deploying it like wildfire to enable potential customers to test-drive the products they sell, some say commercial real estate is lagging and needs to incorporate more AR into its sales strategies.https://plnar.co/blog/the-growth-of-virtual-and-augmented-reality-in-real-estate/
How does it work?
An augmented reality ad isn’t simply a flickering image or video that shows shoppers products. It deploys the same technology used in video games, permitting them to roam imaginary worlds as if you were really inside them. AR is as close as a viewer can get to navigating a space that they’re not really in.
What industries have been successful at using AR to sell their products?
Williams Sonoma, IKEA and Lowe’s have been successful at using AR ads that enable prospective shoppers to browse furniture as well as entirely decorated rooms. Education is using augmented reality to reach students who respond to more dynamic learning activities. Retail is enabling clothes shoppers to check out apparel up close just by swiping a handheld screen. Travelers planning trips can walk through resorts or virtually experience hotel rooms and pool areas.
Where does the commercial real estate market stand regarding such a cutting edge way to reach new buyers?
No one can deny that giving users the ability to digitally interact with properties that interest them, is a winning idea. Buyers who want to save time before setting out with a realtor to visit a property or just look at images of it, can visualize a space using AR to decide if it’s something they’d like to tour further https://plnar.co/blog/the-growth-of-virtual-and-augmented-reality-in-real-estate/ The AR tour they take, will satisfy their curiosity as much as a physical one.. Those who intend to renovate to great extents, can use AR to forecast how a space they’re considering purchasing will look with the changes they anticipate before they even make them. Many predict that open houses will become obsolete once real estate fully incorporates AR into its paradigm, but commercial realtors are not using AR yet as much as other industries. Some say commercial realtors still need to adjust.
The commercial real estate industry is never always straightforward. Before working with developers, clients must know what they specialize in and how much expertise they have in their fields. There are many crucial facts to know about commercial real estate development.
The Process Could Take Years
The process from conceiving the idea to finishing the construction could take years. The commercial real estate industry is unpredictable. It takes two to three years for some development plans to reach the first step, which is to purchase the right amount of land. Some plans become legal cases that get tangled up in courts for years.
In other cases, it takes years to finish constructing the building. This delay may be the result of budget deficits, inclement weather, manmade or natural disasters, shortage of materials or workers, etc. Overall, professional real estate developers are hired to handle a project from start to finish.
Different Developers Have Different Duties
The types of real estate properties determine the types of developers’ jobs and tasks that exist. Commercial condo developers are tasked with selling individual condos within a building. Developers of apartment complexes focus on leasing apartments. Other developers focus on constructing office buildings, school campuses or industrial facilities.
Commercial real estate developers have various specializations. Some specialties are determined by the type of building, such as residential buildings, commercial buildings or buildings for lease. Some developers specialize in constructing energy-efficient buildings. Others are knowledgeable in purchase and building on raw land while others understand finance and the steps to obtain funding for projects.
Site Selection is the Most Crucial Step
Many developers agree that the most important step is selecting the site and buying the right amount of land. The success of any business depends on its geographic location and proximity to customers. Similarly, a residential building is effective only when its homes or apartments are located in a safe, comfortable area.
Commercial real estate development includes good ideation, planning, designing and manufacturing. Some facts are obvious, such as the importance of choosing the perfect location. Other facts take some research to learn more about. Not every project can be completed on time because legal challenges may arise. Clients who are planning to work with developers need a good overview of what they’re facing.
There can be little doubt that 2020 was a watershed year for commercial real estate; in the fallout from the COVID-19 pandemic, it is unlikely that the work culture of the United States will ever be the same again. To wit, the concept of work-from-home as a functional business strategy went from the stuff of fantasy to reality in the space of only a few months last year. Anyone in the field of commercial real estate must be aware of this change to plan for the future.
Moving With the Curve
With that being said, there are a few things to consider when analyzing market changes in real estate in 2021. Firstly, expect rent costs to fall in areas such as Silicon Valley and New York City. These areas are still major centers for tech and investment companies; however, locations such as these are seeing mass exoduses of workers who favor home offices to office buildings. If you want to get a foothold in these areas, however, now is a great time to find a bargain.
Real Estate Hot Spots
Secondly, investors should be aware of real estate “hot spots” currently emerging around the country. These are regions where real estate investing is extraordinarily competitive and by extension extraordinarily profitable. Austin, Texas made headlines in 2020 after entrepreneurs like Elon Musk announced that they were moving their corporate operations to this up-and-coming city. Expect a boom in real estate prices in Austin in coming years as Texas becomes a haven for big tech companies keen to take advantage of the state’s generous tax policies.
Other “hot” cities include but are not limited to:
- Portland, Oregon
- Birmingham, Alabama
- Boulder, Colorado
- Louisville, Kentucky
- Missoula, Montana
- Atlanta, Georgia
- Boise, Idaho
Most importantly, however, real estate aficionados should know that the work-from-home trend doesn’t apply equally to every industry across the board. Tech companies employ armies of computer science grads to perform important coding work; certainly, for the most part, it is not necessary for these workers to stay in office buildings to complete their tasks. Consequently, tech real estate may see remarkable changes in the next five years.
Playing Against Type
Despite a shift towards work-from-home thinking in the tech world, however, there is still a lot of office-based work that needs to be done across a variety of industries. For example, most doctor appointments still need to be completed in person; real estate space for healthcare clinics will almost certainly be in very high demand in coming years. The same principle holds for sectors of the economy related to lab work and wholesale supply chains.
To wit, there is still life in the commercial real estate market yet. It is true that investors will need to stay on their toes in coming years as America transitions to a new stage of work culture; however, the benefits will be numerous for investors who can adapt to changing times and changing business needs.
The real estate sector is a crucial pillar of the global economy. Whereas it has taken a major hit thanks to the Covid-19 pandemic, the real estate industry is increasingly getting transformed by adopting new trends. There is a wide range of opportunities ahead of us as far as the industry is concerned. Analysts project that the industry’s future is highly likely going to be defined by certain characteristic trends consistent with response to the identified market gaps.
The future of the real estate industry will undoubtedly focus on adopting technology and integrating it into real estate constructions. The need to have smart homes and offices will drive up the demand for smart homes where technology is integrated into every aspect of home living. This includes home security systems and remote controlling of smart home devices.
Lesser demand for commercial space
The Covid-19 pandemic has taught us one thing – that we can productively work from home. Large businesses are expected to scale down their demand for commercial office space, even as they work towards reducing the number of office workers. As more workers work from home, there is expected to be a gradual decline in the demand for large commercial office rooms. Businesses will leverage the virtual workforce as part of the strategy of reducing overhead costs associated with the ownership of physical office spaces.
Priority in property maintenance
Consumers of the real estate industry are generally more concerned about keeping their spaces in good sanitary conditions. This comes at a time when the pandemic has elaborated the need to keep our environment clean and disinfected. The underlying concept of cleanliness is expected to extend into ensuring that our homes look physically appealing. This is expected to be accompanied by fresh landscaping ideas so as to keep real estate properties attractive to live in.
Changes in property utility
Another of the most remarkable future changes in the real estate industry is expected to touch on the utilization of office spaces. More office space, for example, will go into the adoption of technological tools, such as video conferencing rooms and large television sets to facilitate video conferencing. With the idea of social distancing still fresh in our minds, the number of persons who can live in a specific office space is expected to reduce as part of the maintenance of social distance.
If you’re interested in becoming a commercial real estate developer, you have probably done enough research to know that you’ll need good credit. In addition, there are several steps to take in pursuing this type of career, and there are multiple avenues for breaking into the industry. Here are a few tips that will help your realize your dreams of becoming a CRE developer.
Choose Your Starting Place
There are many different ways to get involved with commercial real estate development, so you should choose the option that’s right for you. Most people get started by pursuing a career as a commercial real estate broker or agent. These career paths are preferable because they will help you get the necessary licenses and permits to get involved with CRE development. Additionally, these opportunities teach you the ins and outs of investing in commercial real estate before you use your own money to develop new properties.
Network With Professional in Related Industries
It’s never too soon to start networking with professionals who can help you become a CRE developer. This may involve connecting with lenders, lawyers, and other agents who are all involved in the commercial real estate industry. Additionally, you should network with general contractors, electricians, plumbers, and other skilled workers involved in construction trades. Maintaining a close connection with professionals in a wide range of related fields will give you access to their services when you may need to rely on them.
Prepare For the Red Tape
Once you’re ready to dive in and develop your first commercial property, you’ll have to deal with the bureaucracy involved in developing land. This involves getting environmental reports for the land in question, and submitting documentation to the city or county for the approval of your building permits. Additionally, there may be steps you’ll have to take to meet your lender’s terms. Even after you obtain the necessary approvals, you’ll have to go through the process of reviewing bids and awarding the project to the contractors with the most favorable offers.
It’s also important to remember that market research and a deep analysis of each project will play a role in determining your success as a real estate developer. In time, you’ll hone your skills and become adept at recognizing promising opportunities. In the meantime, you should accept that you’ll make mistakes, and develop a strategy for learning from them.
Hello, technology, meet the real estate industry. It seems that these two giants were made for one another, doesn’t it? In recent years, both have evolved and given rise to some amazing real estate/tech companies often referred to as ‘PropTech’. Let’s take a look at some of the top real estate tech companies, learn about who they are, what they’re known for, and how they make navigating the world of consumer and commercial real estate easier than ever.
States Served: Georgia, Texas, Arizona, Florida, Nevada, North Carolina, Colorado.
First up on our list of top real estate tech companies is consumer-centric Offerpad. With Offerpad, the process of selling a home is seamless. Simply request an offer, fill out a questionnaire, include pictures (videos too if you can), and wait for your cash offer. If the offer looks good, you’re on your way.
Offerpad Pros: The process for selling a home is straightforward.
Offerpad Cons: Offerpad serves a small relatively small number of areas in a handful of states.
Location: UK (London)
Areas Served: HubbleHQ serves 20 areas throughout London.
Next, we step into the world of commercial real estate with HubbleHQ, a top real estate tech company in the United Kingdom. HubbleHQ’s focus is on office space for not only companies in the UK who want to be in London, but also for any other company elsewhere who’s thinking of expanding. A great perk of going with HubbleHQ is that they handle the whole process from start to finish for free. Who doesn’t like a service that is free?
HubbleHQ Pros: Again, a simple process, and HubbleHQ handles all the details from beginning to end at no additional cost.
HubbleHQ Cons: There don’t appear to be much in the way of cons with HubbleHQ. The areas served might look like just a few, but London is a global destination so the number of potential customers is huge.
Location/Areas Served: Seattle, Southern California, Portland, Boston and the San Francisco Bay Area.
The final top real estate company we’ll visit today is FlyHomes. FlyHomes is a real estate brokerage that helps consumers buy and sell their homes. They work with consumers as well as real estate agents. FlyHomes was started in 2015 by a single real estate broker and they’ve now expanded to an amazing 150 brokers.
FlyHomes Pros: FlyHomes touts a guaranteed cash offer a trade-up program and an app.
FlyHomes Cons: It’s hard to find a con with FlyHomes.
So whether you’re a consumer looking to buy or sell a home or you’re a commercial client who needs office space, there are a ton of top real estate tech companies you can turn to for help. The three companies we visited today, we think, deserve strong consideration.
A commercial real estate property is an asset that generates income for its owners. The property offers favorable returns over a long time. It benefits the owners with consistent monthly rental income and adds value to the total investment portfolio. The process of commercial real estate appraisal determines the current or market value of a commercial property which in turn helps seek financing, insurance, purchase, or sale deals.
Commercial real estate investments have earned solid returns in the past. Unfortunately, these gains have dissipated due to the Covid-19 pandemic. Clients choose to move out of office spaces they no longer afford to save on rental costs as employees work remotely. Whereas there is some semblance of a return to normalcy, it will take time, and companies worldwide will have to adapt to new business models to survive the post coronavirus era.
This trend has been long in the works as the past decade will show, with brick and mortar businesses switching to digital platforms. Global brands have set up massive distribution centers across the continent to serve an ever-growing internet consumer base. Notably, the near-collapse of coworking spaces company WeWork has cast doubt over flexible working spaces options that the sector had started to acclimatize.
With global travel at less than 50%, short-term stays companies will continue to struggle in the foreseeable future casting further doubts on investments in real estate startups such as Common, Quarters, and Ollie. Deloitte projects that economic activity across Europe, large Asia-pacific economies, e.g., Japan and Australia, India, United States, and China, will face a severe downturn if the coronavirus vaccination is not practical. As it will take time to develop enough vaccines and deploy them, economists expect growth to remain constrained for a long time. Nonetheless, the economy will recover. The critical question for Commercial Real Estate owners is whether CRE companies are ready for the future.
By tapping into tenant data, commercial real estate companies will become more resilient. IoT sensors collect proprietary information about the behavior of users in multiple real estate properties. This data provides a valuable commodity that could help technological and marketing companies build trust and increase user engagement. These observed trends are bound to take commercial real estate to a whole new competitive phase.
The real estate industry was already undergoing historic disruptions thanks to an array of new technological applications for the basic practice of buying and selling property. Everything from blockchain and AI to the showing of homes via virtual reality platforms makes this sector a Brave New World indeed.
But just when you thought there was enough tech changing the game, a new phenomenon of the Digital Age is turning real estate on its head once again. It’s called iBuying, and it may be the hottest trend in real estate.
What is iBuying? This is when an individual or company buys and sells real estate assets strictly through connected digital platforms.
This new way to trade is being done by entrepreneurial, independent and self-employed speculators — but iBuying has also been embraced in a big way by both emerging and established companies, such as Zillow, OpenDoor, Knock, Offerpad and RedfinNow.
iBuying is actually much like house flipping, except the strategy is different. Operators don’t seek run-down fixer-uppers to remodel and sell at a sweet mark-up. Rather, they search out homes in good to excellent condition. They buy at a fair market value and then attempt to resell for a profit. That obviously means much lower margins than traditional house flipping. Thus, iBuying is high-volume trading at low margins.
The iBuying concept has not penetrated all areas of the U.S. as of yet. Most of the activity is seen in locations where average properties run in the $250,000 range.
Homeowners can get involved in iBuying. They start by going online to seek offers for their home. The first step is filling out basic information, such as the appraised value of the home, features, information about location, any recent remodeling that’s been done and so on. The homeowner hopes a company like OpenDoor or Knock will like what they see and make an offer.
The professional iBuyer has incredible tools at his or her disposal. For example, they deploy an Automated Valuation Model (AVM) which will provide an estimate of the home’s value. They also use AI applications to pour through hundreds of prospects and ferret out the promising deals while rejecting the marginal ones.
An iBuyer can sit back in his chair in a home office and ply the nation for real estate opportunities while never having to pound the streets, go out and show a home, talk to clients, tack up advertising signs or perform any other of the trappings of traditional real estate activity.
Whether you are looking to purchase or sell a property, commercial real estate appraisals are key to determining the price or value of the property in question. Appraising commercial real estate is beneficial to a seller and a buyer as it helps identify the comparative value of a particular property against other available properties in the market. Commercial property is defined as a property used exclusively for business-related purposes or to provide workspaces rather than private living spaces.
Commercial real estate should not be confused with residential real estate appraisals, which looks at the value of single-family homes, condominiums, or townhouses mainly used as private living spaces. Whereas commercial real estate properties are typically leased by tenants who conduct income-generating activities, residential properties are purchased for personal use. Knowing the distinction between the two will help you choose the right valuation approaches when you are buying or selling.
Commercial real estate appraisal is the process of identifying the current value of a commercial property. It is mainly conducted by sellers to identify the market value of their property when considering selling it to other parties. In other cases, buyers undertake a commercial property appraisal to verify whether the asking price is competitive against other options in the market. In both instances, the derived value of the property acts as an unbiased, fair estimate that sets a foundation for negotiations, financing, restructuring or insurance purposes.
The current market value of a real estate property helps banks determine how much financing they can safely lend against such assets. Financial institutions provide capital to investors, individuals and businesses against assets that can be sold off to recover the total sum of principal and interest accrued on loan should the borrower fail in their obligations to repay. In the case of real estate, the current market value forms a basis for calculating the maximum mortgage value a bank can lend safely.
Further, insurance companies use commercial real estate appraisals to determine how much you should pay to insure the commercial property’s value against such perils as fire, theft, and natural disasters. Whichever the case, it is essential to identify the exact purpose of the appraisal report to determine the correct method of undertaking commercial real estate valuations.
Although real estate investing can be extremely lucrative, it’s also easy to get it wrong. When dealing with properties that can have valuations into the multiple six-figures, a single mistake can end up costing you huge amounts of money. Here are three of the most common mistakes made by real estate investors that you should try to avoid at all costs.
Underestimating Maintenance Costs
When you’re looking at a rental property, it’s all too easy to take too optimistic a view of its potential cash flow. While the income will likely look very attractive once you subtract the mortgage, insurance, and tax payments, you also need to factor in the cost of maintenance. Underestimating this expense is a huge mistake that can turn a property that looks like a huge win into a major loss. Knowing your real expenses and taking them into account will help you determine how much you can pay for the property and how much you’ll need to charge in rent.
Making Excessive Renovations to a Mediocre Property
While improving a home definitely raises its market value, there’s a point of diminishing returns that’s important to consider. Putting too much money into a simple, single-family property will likely make it difficult to find the right buyer and raise your total expenses for the project. Keep your renovations simple and focused on what buyers are really looking for. If you try to get too fancy, you’ll most likely regret it.
Expanding Too Aggressively
Once you’ve seen your first success as a real estate investor, you’ll naturally want to replicate it. While it’s obviously a good idea to expand your portfolio over time, there’s such a thing as taking on too much at once. While there are times when it pays to be aggressive, be sure to carefully consider whether you can reasonably finance a new deal without taking on excessive risk. Knowing when to be patient and wait for the right property to come along is one of the keys to successful investing.
If you can avoid these three mistakes, you’ll be much more likely to profit from real estate over the long run. While real estate investing is far from easy, going about it the right way can make you an excellent return on your investment.