Organising real estate holdings and investments with Technology

Authored by Anand Moorthy is the Founder & CEO of propsamc.com Technology has always challenged old practices and is consistently successful in creating better efficiency in the overall process of delivery of services. But less people realise, it enables opportunity to dramatically change any product or services delivery, to suit the new generation’s way of consumption. Two very important points to note before we start to explore how important Real Estate sector growth and monitoring in India are: 2nd largest employer and over 12% contributor to GDP in India

• Various Real Estate taxes and premiums (excluding GST) contributes to a very high percentage of revenues to any state government in India
• A very recent study by RBI in 2017 on Household Finance & Savings suggest very interesting facts:
• Real Estate contributes more than 75% wealth or savings of every Indian. The above seems to be consistent from bottom to top pyramid of wealth.
• Correlation of higher education and employment bends towards financial investment than real estate

Real Estate looks far but not that far as we think to adapt technology, provided the overall ecosystem around would like to participate to create high level transparency through a co-related mechanism of participation in any transaction life-cycle. Transaction is defined as a sale, lease or a mortgage event. A close look at all traditional beneficiaries will give way to finding of opportunities on how technology can change the way one manages, monitors and markets properties in India.. The above beneficiary fact check gives us clearly two categorization for technology to disrupt practices and services in this industry:

• Digitization & Data Consumption- the government, brokers, and developers, law firms, valuators, property owners, tenants, insurance company & DSAs could directly benefit to make their work more efficient and credible. This would indirectly will help all other beneficiaries to better access of finance and risk mitigation
• Financing & Asset Monitoring – the society, brokers, Private equity firms, architects, surveyors, facility management, building contractors, developer, property owners, investors, and lenders could increase their productivity and time management through multiple source of solution providers

Having established the above it’s very important to highlight what common problems does these beneficiary face, which can be enabled through PropTech platforms as a starting point to bring a high level efficiency. Only 2 concrete actions from the beneficiaries can majorly disrupt the real estate space to increase investment and frequent consumption:  

• Bringing land records, transaction, property tax, mortgages, reservations, building permissions and court cases into a single platform.
• Creating Asset Monitoring platform which integrates with above to bring a 360 degree view of any property managed by the property owner or the property manager.

The benefits not only will increase efficiency in cost and time but will bring more revenue and liquidity quotient to real estate class, including:

• Faster and intelligent validation of title and present value
• Faster transaction time
• Platforms for co-ownership and financial Inclusion of physical assets, thus increasing a large base to participate in govt and large assets
• Title Insurance and fraud elimination5. Minimal involvement of lawyer and brokers and lenders thereby automating process and decision making
• Increasing exchequer revenues and eliminating corruption
• Central access to documents for any buyer, investor, lender to do their own risk assessment
• High usage of IoTs for energy savings, quality construction and snagging to make it more consumer friendly
• Lastly, higher global participation to increase high yielding environment