Real estate investment has historically been an elite game reserved for wealthy investors. It required plenty of capital to pour into massive, long-term projects. Those with less money to invest often had to settle for small projects, like house flipping or single rental units. These required much more elbow grease, and often the payout was substantially lower.
As time has gone on, a technologically-powered 21st-century generation of entrepreneurs has started to peel back the curtain on real estate investing. This has led to a plethora of new enterprises that are breaking down these traditional barriers. These innovative brands are providing access to major real estate investment opportunities with real potential for sustained ROI without the need to overcome outrageous barriers to entry.
Here are a handful of companies that are disrupting the real estate investment space in different ways as we approach the quarter-century mark.
1. Plum Revolutionizes Co-Ownership
Plum is a prop-tech company that is overhauling the concept of co-ownership and vacation homes. The cost of purchasing a vacation home is often far too exorbitant to be within the range of a single small-scale investor. Those who lack hundreds of thousands of dollars to buy a home outright can use co-ownership as an alternative option — that is, joining with a select group of like-minded individuals to pool resources and buy a vacation home.
Co-ownership is simple, and with over 2 million co-owned vacation homes in the US, it isn’t a new concept. But the logistics are intense. Not only are you tackling a real estate purchase that functions as a secondary home, have tax implications, and comes with a laundry list of other homeowner elements to take care of, but you’re also tying your finances up with others. The process is tricky and requires expert guidance. Enter Plum.
The real estate tech tool uses advanced technologies to help potential co-owners navigate the vacation home purchase process. After signing up for a free account, the tool helps members form LLCs, work through negotiables, and oversee property financial management. Co-owners can also choose their own properties or browse from others listed on the site. The result is an accessible and affordable experience. And that experience doubles as a part-time vacation spot and a solid real estate investment.
2. Airbnb Expands Its Real Estate Innovation
Airbnb is no stranger to disrupting the real estate space. The well-known rental enterprise enables individuals and companies alike to list spaces for rent on their platform. This streamlines the rental process, allowing those with minimal capital or space to still earn an income.
Airbnb continues to be an innovator in the real estate space by expanding its platform’s capabilities. One recent development has been the company’s new ability for renters to seek out apartments where they’re allowed to host part-time. This sub-letting arrangement allows Airbnb users on both sides of a transaction to generate multiple layers of income.
Airbnb isn’t the only company in the short-term rental game. However, from day one, they’ve displayed a steady ability to find unfulfilled potential in the age-old practice of renting property. It’s a skill that the brand continues to display through the ever-evolving technology of its popular platform.
3. The Hideaways
The Hideaways is another company that is applying the lessons of tokenization to the larger real estate market. The cutting-edge investment option (which is finishing up its presale launch at the time of this writing) offers early supporters an opportunity to invest in exclusive real estate properties around the world through fractionalized NFTs.
Each NFT is underpinned by physical real estate properties with the goal of providing a tangible, stable source of value to the digital tokens. Investors can purchase as little as $100 of equity to access the service. This gives them HDWY tokens, which they can utilize to generate passive income in multiple ways.
First, the tokens themselves provide a potential source of growth via appreciation of the cryptocurrency. Investors can also stake their tokens for rewards. In addition, the value of the underpinned property can increase. It can profit from fully-managed rental activity can pass through to owners.
The Hideaways is a fantastic idea in concept. However, it’s worth pointing out that it’s the most risk-heavy option on this list since it hasn’t fully launched yet. Nevertheless, it represents an exciting and unique foray into the unfolding world of accessible and profitable 21st-century real estate investment.
Whether it’s through vacation home co-ownership, tokenized CRE, or property-backed NFTs, there are many examples of companies that are shaking up the real estate status quo. As this new frontier of the market opens up, it’s worthwhile for investors to do their homework, find investment opportunities that align with their strategies, goals, and risk levels, and then invest in projects that could be portfolio game changers down the road.