Real Estate Investing in a “One-Click” World

Real estate has long been the world’s most popular retail asset class, yet it remains one of the most fragmented and intermediated. In order to source, acquire, furnish, connect and generate income from a property an investor would typically interact with 20 plus individual service providers and spend months of their time, money and effort. 

The plain truth is that there has never been such a thing as “Amazon 1-Click for real estate.” The end-to-end logistics solution for buying and managing property has not yet been perfected. Whilst there are a lot of great technology solutions being developed for the property industry they typically tackle just one or two specific pain points in a broader transaction. In isolation, these solutions have less impact on the overall customer experience because their piece is just one of a much larger puzzle. As an example, there’s not much point streamlining the purchase itself if the legal documents and mortgage approval take weeks of frustrating back-and-forth, duplicating much of the same process and paperwork.

So how can the vertically-integrated approach used by companies like Amazon and Uber be applied to real estate, given the sheer number of different specialist services required through a property’s lifecycle? 

Tightly controlled marketplaces may hold the answer. As opposed to open marketplaces like Rightmove, Zoopla and Zillow, new curated models are emerging where the platform owner selects and aggregates stock and controls the entire proposition, delivering a consistent end product under its own brand. By bringing together the puzzle pieces and managing them end-to-end, a cumbersome and heavily intermediated experience can be condensed into something frictionless and elegant. 

This is already starting to happen in the sector with companies like Lyric, Domio, Blueground and Zeus owning their supply chains to deliver high quality and consistent housing to travelers and corporate residents at scale. Renting a property with one of these providers is straightforward and the end product standardized. Airbnb (an investor in Lyric) is going deeper into its vertical and portals like Zillow now offer Instant Offers to further control and improve customer experience.

Can these same principles be applied to provide global property investors with seamless one-click buying? In practice, this means vetted properties pre-packaged with finance, insurance, furnishings and ongoing management, delivered seamlessly using an instant and legally binding ownership mechanism. 

I left my previous company, the UK buy-to-let mortgage lender Landbay, to give this concept a shot, founding Dot Residential last year. Our take is the ‘Buy with Dot’ button, an online checkout/financing solution that can be applied at the point-of-sale to properties that meet our feasibility and loan underwriting standards. We are still very early in this journey but have now successfully sold pre-financed and managed apartments to investors both in the UK and further afield.

For a new business like Dot to condense the end-to-end property transaction into one interaction, we have curated a tight group of service providers including lawyers, insurers, accountants, builders, FF&E brands, utilities and property managers who work with us behind the scenes under strict SLA’s and wholesale pricing. And where required, we have developed our own solutions such as our Instant Mortgage and Container ownership structure. Vertical integration has always been our end goal as we believe it’s the only way to provide a consistent end product that delivers the customer experience that people now demand. 

One side effect [and potential benefit] from managing the entire supply chain under one brand is that the onus is on the platform owner to control the quality of housing being delivered. As opposed to traditional property investment marketplaces not only do the financial returns need to stack up for investors but there is likely to be a greater desire to deliver homes that residents love, ensuring that they not only stay occupied but also help build brand value organically. This is a clear differentiator from traditional marketplaces where the number of listings is prioritized, and where the end user (the resident) is seen as a driver of yield, not a key member of the ecosystem. 

Ultimately though the financial returns that platforms like Dot deliver for investors will dictate how much is available to be re-invested into housing improvements and the broader resident experience. This is where leveraging the efficiencies of a managed supply chain can help. With an intermediated model margin is extracted at every stage of the transaction – with a managed/controlled model the platform owner can take a more holistic view.

It’s our hope that as platforms like Dot grow and the supply chains we manage become more efficient we can invest more and more of the inherent savings back into the homes themselves, delivering great housing that renters want, whilst providing investors with solid returns. 

As such, we hope the long term impact of one-click property investing is a better quality and more efficient rental housing market.

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