Property musings on Facebook - 31 October

by Alistair Helm in


Here are the articles posted on Facebook over the past week - short, spontaneous insights and observations which I felt needed immediate discussion and didn't warrant long-form articles written.

 

When Hollywood starts making movies about real estate - then you know the market has peaked!

 

 

 

 

 


Property musings on Facebook - 22nd August

by Alistair Helm in


Here are the articles posted on Facebook over the past week - short, spontaneous insights and observations which I felt needed immediate discussion and didn't warrant long-form articles written.

Ultra Fast Broadband & House Values





Is virtual reality a disruptive technology for real estate?

by Alistair Helm in


I have a sense that by the weekend the term 'virtual reality' and the company Oculus VR will be better known than it was a week ago. When Facebook plonks down $2billion in stock and cash to by a technology company it makes news, not as much as spending $19billion buying WhatsApp, but $2billion is a large amount of money for a company who are still only in a beta stage of development for their VR device.

In the context of real estate the question has to be asked as to the impact this technology might have for the future and could it in anyway advance Facebook's role in the industry. In short, I don't think so.

I know there will be those who hold the view that property viewings could become an immersive experience through this type of device whilst sitting on the couch - with the added benefit of being able to create alternative decor and style to a property for sale. This will certainly be within the capability of the technology I have no doubt. However I sense that being able to have people 'walk though' a recreated virtual version of a home will be of greater value to interior designers, architects and make-over services than to real estate agents.

The virtual reality experience is merely to real estate another version of the photo portfolio, another optional version to complement virtual tours and video tours. The fact is that property inspections in person at an open home are the only true way to experience a property before making that hard and tortuous decision to invest in a property.

I would therefore urge real estate agents and companies to save their tech funds and not rush out to start creating virtual reality portfolios of their listings. Photos are more than adequate to provide the incentive to drive viewings.

Just to avoid confusion there is a distinct difference between the Virtual Reality of Oculus VR and their immersive headset and the more practical and relevant Augmented Reality which as a service has been around for many years mashing together the smartphone property data through geo-locational data to overlay valuable information as you look at properties whilst out and about - that is smart technology of value to the real estate industry.


Real Estate and Technology – the event of the year

by Alistair Helm in , ,


This week will see me in San Francisco attending one conference and hosting another; both of which are central to the future of real estate's reinvention through the power of technology.

Inman Connect starts on Wednesday 10th and runs through Friday 12th July. This conference operated by Inman News through its inspiring publisher Brad Inman has for over 15 years, created a forum to chart the future of the impact of technology on the real estate industry domestically in the US and internationally. Hosted bi-annually; July in San Francisco and January in New York, these events attract an audience of over 1,500 from across the US and the world – a mix of real estate agents and business owners as well as technology companies and property portals. The format is rich in content, and fast of pace; presentations, discussion sessions and face-to-face challenging debates. 

I have attended a number of Connect conferences over the years in my role as CEO of Realestate.co.nz. In the early years these events were pivotal in identifying the trends such as social media and mobile which I brought back and enthusiastically adopted in some cases a year or more before the competition. Inman Connect was the reason I started blogging back in 2007 with the Unconditional blog as well as starting a closed industry forum for agents. As for mobile, Realestate.co.nz certainly benefited hugely with an 18 months lead and 100,000 download advantage over Trade Me before they launched their specific property app as a result of the focus that capability showcased in 2009.

The conference I am hosting this week in San Francisco is part of my 'other day-job' as CEO of Property Portal Watch. To coincide with the Inman Connect conference we organize a one-day conference for CEO’s / owners / founders / executives and investors in, and partners to the world of property portals. This event will be the 8th Property Portal Watch conference and our largest yet in San Francisco with at this time 120 attendees from 24 countries representing 41 different property portals from the powerhouse operations of ImmobilienScout24 in Germany, Zillow in the USA and Realestate.com.au in Australia to the emerging markets in Africa and South America. These attendees will participate in discussions around the core themes of Big Data, Social, Mobile as well as operational topics and strategic investment issues and opportunities.

Both of these events will I am confident provide rich pickings for future articles. I will be ready with laptop in hand to cover the core sessions and emerging ideas as well as hopefully to chance upon a few new start-up companies that showcase their wears at the Connect conference offering new functional services for real estate companies. I will be writing a couple of articles here on Properazzi, but also check out the article over on Property Portal Watch.


Will algorithms spell the end of the real estate agent?

by Alistair Helm in


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Recently I have been reading widely on the subject of technology and its likely impact on business. Every such article or book leads me to ask the question, what could the likely impact be of these new technological innovations on the real estate industry?

Writing in Wired magazine, Kevin Kelly estimated that by the end of this century 70% of today’s occupations will be replaced by automation, could this be the case for real estate agents?

In the book by Christopher Steiner “Automate This – How algorithms came to rule our world” he details the way that equity trading has been transformed by automation where over 60% of all trades are made by machines driven by the most complex and sophisticated algorithms, such algorithms are more and more invading all aspects of business and commerce. In the realm of healthcare he believes that the doctor of the future is likely to be driven by (if not wholly operated by) algorithms. A somewhat scary thought, but diagnosis is all about interpreting data and the results speak for themselves.

Anything that requires decisions to be made based on data can be transformed through the power of algorithms that are becoming more and more sophisticated. But what might this mean for real estate?

A number of years ago I heard the quote

Agents will not be replaced by technology, they will be replaced by agents with technology

I have used this quote extensively in presentations to agents; to shake them up to the reality that understanding and leverage the digital technology revolution, to become a smart, more connected, more transparent, more social is a key differentiator. Slowly (for real estate is an industry slow to change) agents are apprecaiting the digital world we all live in and they are beginning to appreciate the power of being found by potential clients prospecting for smart agents rather the time-honoured but grossly inefficient process adopted by most agents to prospect for listings.

However my recent insights as to the power, capability and potential influence of algorithms in real estate makes me wish to revise that original quote, now updated to read:

Agents will not be replaced by technology, they will be replaced by agents with technology, who will then be replaced by algorithms

I really do believe that technology in the form of highly developed algorithms may well in the coming decade radically change the real estate industry.

Now I am not about to suggest that the whole end-to-end process of real estate will be done online with no human intervention, connection or facilitation; but I think the human element will be marginalized to the extent that lawyers are marginalized in the real estate transaction process to the conveyancing and due diligence component. Agents in the future will be the facilitators and negotiators handling the process after a property has been found, that suits the buyers needs and matches the sellers requirements.

What do I mean by this statement “handling the process after a property has been found that suits the buyers needs and matches the sellers requirements” – let’s unbundle it to allow me to share a future scenario.

The property buying and selling process is inefficient, now I don’t make this statement solely in relation to the real estate agent for which I have previously expressed my views very clearly, but in relation to the marketplace of real estate in a wider sense.

 Think about it for a moment, when we decide we want to move house we are given a very narrow shopping list of properties from which to choose. When you apply the filters of location, price and size you will, even in a city the size of Auckland end up with the portfolio of barely 20 houses that are available over a 5 week period that match your criteria. Widen that time period to 10 weeks or 20 weeks and the option list multiplies – wouldn’t we like to have a wider option list. This is where technology can change the very heart of real estate.

Why should it be that we can only buy what is actually on the market? – when the reality is there are probably as many property owners who have not yet put their home on the market but would very happily consider moving right now.

Could it be that the very structure of real estate, this very theatrical process of For Sale signs, open homes and auctions is actually not the best way to facilitate a market for house transactions?

Why could we not leverage technology to be able to allow us to seek out the right house for us right now from all the houses in a given area and price bracket, not just those on the market. Such technology would know what the situation was for all homeowners in an area and be able given inputs by all homeowners identify the propensity of all those property owners prepared to move over a forthcoming time period.

The technology could then align a chain of transactions such that your ideal house could be part of a complete chain whereby the current owner of that house meets their desire to move and so on. The process seems at first very simple, but start to consider all the variables across the 400,000+ homes in Auckland or 1.7million across NZ with all the inter-relational aspects to match the timing, circumstances and needs of all the active property owners likely to move in the coming months.

Such a process would remove the need for all advertising of property, all listing of property and all prospecting by real estate agents. It would though still require the facilitation and negotiation skills of active professional agents. Their services and skills would though be valued on an hourly basis rather than a commission.

Such a system because it is focused on satisfying buyer demand rather than facilitating vendor supply has the capability to radically transform the very form of property transactions, create far more liquidity in the market and also potentially cushion property market price cycles as the efficient satisfaction of a property chain removes the price pressure of the current market.

Maybe this scenario is too far-fetched but remember how dating and personal connections have been revolutionized not so much by the internet as by the algorithms that power personal matching sites – what is so different about the algorithms being applied to property in much the same way?

 


Leveraging technology to be a smarter property investor

by Alistair Helm in


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I have often heard it said, that smart property investing is all in the buying. That makes sense, but surely it is as important to manage an investment property smartly as it is to make a smart purchasing decision.

Needless to say technology can play an important part in acquiring and managing a property and I have been checking out some of the latest tools and apps that I think are vital for smart property investors.

Whether you have 2 or 20 investment properties it is critical to keep track of them in regard to rents, maintenance, tenant details and inspections. I’ve a found a single tool that matches this task list and the beauty is that it is a kiwi innovation, built right here in Wellington and providing services globally with clients in the UK, Australia and the US.

PocketRent is an online tool that helps you manage all those tasks as well as improving communication between you and your tenants. From a finance perspective it is integrated into the Xero accounting solution, another great kiwi company taking on the world in accounting software and beating the best in the game. I have checked out a number of online solutions for property management and have to say PocketRent is the smartest.

The proof of any good online service these days is the promise of satisfaction from a ‘try-before-you-buy’ option, this is how PocketRent works, you can load up a single property for free and try it out, pricing then is scaled to the number of properties you own.

If you prefer to unbundle the tasks of property management either because you have you own record management systems or you just like to do things that way, an excellent app for managing property inspections is Happy Inspector. This app for the iPad provides a great way to record property conditions and prompts you to tasks during the process. It naturally captures and integrates photos seamlessly and synchs the data to your home computer or any computer for that matter, as well as providing printed reports and forms to coordinate with contractors and repairers as well as agents.

If you happen to manage some furnished properties it is worth looking at the My Inventory Manager app on the ITunes app store. This app allows you keep a track of all inventory in a property with serial numbers and values.

I started off by stating that managing an investment property was as critical as buying smartly. Naturally any review of technology for the property investor could not be complete without the importance of websites and apps for searching property on the market. Naturally when it comes to finding property for sale you cannot go past Trade Me Property and Realestate.co.nz. For finding tenants Trade Me Property is the answer.

For more detailed information on property values and sales QV and Zoodle provide great insight and valuable data as paid for reports. If you happen to be in Wellington then check out Watch My Street - you have the benefit of this free site for local authority property info. Hopefully in time they will be able to provide this service for all of NZ.

Whilst I have outlined a number of valuable fit-for-purpose apps to assist the process of property management and purchase I thought it would be helpful to also share some more generic recommendations in regard to technology.

One of the most fundamental, and one that is all too sadly overlooked until you become the victim of it, is lost files. As with family images; property data and historical reports on properties are valuable to you. Ask yourself, what would happen if your computer hard drive were to crash, if your laptop were lost or stolen? – Where is your data back up?

There is a simple 3.2.1 rule to remember for data storage.  Three copies of everything, at least 2 mediums (one in the cloud and one on a physical disk) and at least one copy off-site. I use a great service called Dropbox, which provides a fully synchronized copy of all my files, I run it on 2 computers – one at home, the other at the office. In this way I have a copy in the cloud and 2 copies on hard drives with two different physical locations. Dropbox also offers a great service for version control so if I accidently delete a file or do something dumb to a spreadsheet I can retrieve a copy of a prior version, very helpful.

Another tip I would share regards passwords. I like most people, are hopeless at remembering passwords and tend to use the same password for many accounts. This is not smart. The vulnerability though is never where you think it is. It is unlikely that your email and password will be hacked from a trusted site or critical site. It will be a weaker site where you use the same email /password combination – malicious access to these type of sites is sadly more common and once collected these email / password combinations can open up the more critical sites. My trick, which I have used for a number of years, is that on all non-critical sites where I don’t provide important personal information or credit card info, I simply use the site name as the password, that way it is easy to remember.

A better and safer solution to this problem nowadays is using a service like LastPass or 1Password. These services use two-factor authentication to create an encrypted password for each site that your computer safety and securely stores. These are very secure services and ensure you only need to remember a single access password, which is secure.

A final thought in regard to technology and the property management relates to social media and your role as a landlord. If you manage your own properties, you really should be aware of the impact the democratic web could have on your reputation and through that the prospects for future tenants. Just as TripAdvisor has had an effect on hotels and their reputation, the web and its multiplicity of users could be sharing experiences about you as a landlord, the properties you own and your tenants grumbles and complaints.

You cannot stop people writing online and sharing what they want. What you can be, is alert to any such comments. Something as simple as setting up a Google Alert based on the address of each of your properties could be an easy and simple way to track if every anyone makes any comments. Google Alerts are free and can be scheduled to send you an email on whatever frequency suits.

If you become the victim of such negative feedback, to be forewarned is vital. As to action, my advice would be; be cautious about being drawn in. If the comment is from an existing tenant I would recommend face-to-face communication rather than online. If the negative comment comes from a prior tenant and shows signs of escalating then it can be valuable at some stage to add your own comment. Remember it is important to be polite, be calm, respectful and factual – becoming angry and inflamed only through fuel on the fire!

Technology is a core part of our lives, our business and our communications, my advice is use it where it can make life easier, you don’t need to be an early adopter, just don’t be a laggard!

This article is also published in the April edition of NZ Property Investor Magazine


How should REINZ invest its asset sale – how about technology investment?

by Alistair Helm in


The Real Estate Institute (REINZ) has announced that it is selling its head office in Parnell to move the offices to the city fringe.

This seems a pretty sensible decision. The section has a capital value of $6.1m and is in size, in excess of its needs. The property is outdated and from personal experience (I worked there for 2 years) it is a very antiquated office layout far from conducive to modern work environment.

So what to do with this capital gain of $6+ million given the financials of the Institute can more than maintain a new city fringe office and staff – income from fees alone totals over $2m a year.

The article in the NZ Herald stated that the Institute was "looking to invest the proceeds in buying an investment property". Why? The role of the Institute as I read it from their website is to promote professionalism and quality and represent the interests of its members.  Surely there are more productive ways of using $6+m then buying a dead asset?

As a starter and to prove that I am not just being negative about REINZ. How about REINZ taking a leaf out of their sister organization in the US – National Association of Realtors (NAR).

NAR announced last year that they were establishing a tech incubator – ‘NAR Reach’ is a tech accelerator programme which will help up to 10 companies develop useful tech tools for Realtors and others.

The real estate industry is by comparison with other industries a technology laggard. This has to change. This will change. The only question is - does the Institute consider its role includes facilitating and driving this change?

Would it not be of great long-term value for REINZ to invest and support technology companies who could provide services and tools to the industry to assist its member become more productive and enhance professionalism.

Smart technology for real estate agents would also be financially beneficial as the processes of real estate in NZ are almost identical to Australia, UK and many other markets, thereby creating export opportunity and credibility for REINZ as well as a valuable long-term asset through equity ownership in start up companies.

Now as with any incubator investment programme there are going to be winners and losers, however if REINZ were to invest $100,000 in each of say 5 NZ companies equating to less than 10% of the proceeds of their property sale; in 3 years they would likely be down no more than a couple of hundred thousand as a worst case scenario, but more importantly they would have challenged their members to embrace new technology ideas and systems and maybe created a new toolset of long term value. They might just be held up as a progressive industry organisation investing members assets in growing the smarts of the very future of its industry!