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The Hot Property That’s Next on Tech’s Agenda: Real Estate

nytimes.com

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Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#41

Post by AlexandrB »

lr4444lr wrote: post #15
qubax wrote: post #8

Hard to tell whether this is a news article or an ad for the featured company. Also, tech has been in real estate for a very long time. Zillow, Trulia, Redfin, etc were supposedly "disrupting and revolutionizing" real estate before smartphones got popular. I remember reading about this more than a decade ago. My god time flies. From 2007. Redfin On 60 Minutes Tonight – Real Estate Market Disruption. https://techcrunc…

Don't sell short what those companies did for buyers: they freed them from the gatekeeper of a broker. No disrespect to brokers - they're great for sellers and I happily used one - but the analytics and search and sheer awareness of what was on the market they offered to the home buyer was revolutionary IMHO.

> they freed them from the gatekeeper of a broker

The thing is, there were many brokers - it was a distributed system. In the scenario where Zillow is wildly successful it will become a monolithic gatekeeper to real estate transactions - a highly centralized system.

It's pretty ironic that the internet has become such a centralizing force, when its promise was to radically decentralize everything.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#42

Post by michaelscott »

r_smart wrote: post #11
ianai wrote: post #4

Caveat: I can’t read the article. I’m just riffing based on my knowledge of RE and personal experiences with tech. As someone who’s researched real estate, I have a hard time seeing how tech can help the RE industry. For starters, RE bubbles have led to the worst economic downturns. If people can buy homes so easily that they can profit on making superficial changes, then prices will go up far above efficient. That p…

>Rent shouldn’t be anywhere near comparable to mortgages. How am I supposed to rent you a house if the rent you pay is less than the mortgage I have on the house? How do I build a pool of money to use for repairing the things that inevitably break?

The rent you charge is for providing a domicile, I as a renter couldn't (and shouldn't) care whether this is enough to deal with repairs, especially since you as owner are certainly not repairing things every single month.

If the rent is more than the mortgage why would I rent? Beyond potential credit problems (which can generally be solved within a matter of months barring egregious exceptions) and maybe conveyancing and transfer fees (which can be negotiated into a mortgage loan), you'd have to be a fool to rent.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#43

Post by emodendroket »

ianai wrote: post #4

Caveat: I can’t read the article. I’m just riffing based on my knowledge of RE and personal experiences with tech. As someone who’s researched real estate, I have a hard time seeing how tech can help the RE industry. For starters, RE bubbles have led to the worst economic downturns. If people can buy homes so easily that they can profit on making superficial changes, then prices will go up far above efficient. That p…

I bought my home through Redfin and I was pretty happy with it. I can also definitely see the appeal of OpenDeal's model of buying your house and then reselling it; it's like the house version of a dealership trade-in. You may not be getting the best deal but you're skipping the hassle.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#44

Post by ghaff »

stephengillie wrote: post #34
baybal2 wrote: post #18

Earlier quoted context omitted.

Just take a look on a very impressive list of RE companies they took over. Besides of them doing all kinds of leasing models, they put a very thick slab of butter on top with add on services, something nobody else can match. With a single click you can: get a handyman to fix anything, order renovations, moving, breakfast delivery, daycare, cleaning, maids, buy furniture, order a restyling, get new appliances, remote…

> get a handyman to fix anything, order renovations, moving, breakfast delivery, daycare, cleaning, maids, buy furniture, order a restyling, get new appliances, remote lock it, pay for every service, or even Airbnb it on your behalf if you leave for extended amount of time, or do that in reverse while you are on a trip to another city. So... apartment concierge. Americans already have most of those services, provided…

There are a fair number of things that many people are probably OK with giving some general parameters and approving a purchase and have someone else take care of all the logistical details.

The bigger issue is that I'm not really willing to pay someone what it costs to e.g. take my car in for state inspection, run my errands, etc. I do have some services for things like getting my lawn cut but it's harder/more expensive to get someone to handle unscheduled one-off things.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#45

Post by michaelscott »

saiya-jin wrote: post #25
newacctjhro wrote: post #17

Earlier quoted context omitted.

You're building equity with the difference between rent (plus repairs etc) and the mortgage. The renter isn't.

Yes, and you are exposed to myriads of risks that tenant isn't either - property market crash, tons of possible environmental disasters, issues with plumbings, fires, damage done to property, gradual degradation of, well everything. Another thing is the amount of time and energy invested into acquiring, renovation, maintenance and improvement of the property. Financially any of those, especially market crash can ruin…

Yes, and you are exposed to myriads of risks that tenant isn't either - property market crash, tons of possible environmental disasters, issues with plumbings, fires, damage done to property, gradual degradation of, well everything.

A property investment, like any investment asset, is a bundle of risks as well as rewards. Yes, you as the owner take on the risk of things like market crashes, insurance and repairs but you also own an expensive asset which you can sell at any time (a renter cannot). You need to deal with the risks and rewards of a property like you would any other asset.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#46

Post by emodendroket »

sharemywin wrote: post #28

So, they are using housing data without taking the bubble into account. They will make money for a while until the market turns then they will lose money when their holdings are 20-40% underwater then it will take 5-10 years before their investment is above water. And the rental market will tank at the same time so, good luck with cashflow. Now let's add maintenance, upkeep etc.

Who's "they"? This article seems to mostly be about OpenDoor offering to buy homes not in need of major repair and turn around and sell them in 90 days, all while collecting smaller-percentage fees that traditional sellers would. I'm not sure this model is as crazy as you're making it sound.

> “The vast majority of investors who hear about it initially think it’s a bad idea,” said Stephen Kim, an analyst at Evercore ISI, a market research company. But the skepticism often fades as they realize Opendoor makes money by providing a service to home sellers, rather than on price appreciation, Mr. Kim said. Even if the company breaks even on a sale, the transaction fees are a meaningful business.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#47

Post by emodendroket »

arkades wrote: post #29
imglorp wrote: post #21

Earlier quoted context omitted.

I just sold a house by myself and the line of people with their hand out is infuriating. Even more frustrating, for providing their automated gesture or nod of a service, they want a PERCENTAGE. For example, to just do all the paperwork, a realtor might offer a "transaction only" service for "only" 1%. Regardless of property value, it's the same paperwork and usually done by a clerk. I instead went to an honest (!) a…

You don't need an "honest" attorney to get that number. It's normal for RE attorneys to get a flat-ish fee, and RE agents to pull a percentage. And RE attorneys usually make And all paperwork and contracts are ultimately done by the lawyer. I have honest to goodness no idea why you involved a realtor at all if you were selling it by yourself. Their only job is to attract prospective buyers (read as: list your house o…

> And all paperwork and contracts are ultimately done by the lawyer. I have honest to goodness no idea why you involved a realtor at all if you were selling it by yourself. Their only job is to attract prospective buyers (read as: list your house on the MLS).

Also handle things like showings, no?

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#48

Post by emodendroket »

tootie wrote: post #20
brightball wrote: post #3

It will be interesting to see if any of this goes anywhere. Real Estate is one of the tougher markets to really disrupt because of the amount of licensing, regulation and the fact that the local MLS is usually controlled by the local real estate group. You have to pay a fee to join each one. I've heard a lot of tech people clamoring for a central MLS service but the local groups are well aware that controlling the li…

There will be a lot of pushback but it's also really valuable. Just based on my experience in NYC, brokers are taking 6% fees on million dollar homes while most are just pushy and dishonest. The buying process is complicated and heavily regulated, but if I can do my taxes online then buying a house should be easy.

> if I can do my taxes online then buying a house should be easy.

Uh, should it? I doubt many people sell homes nearly as often as they file taxes.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#49

Post by ghaff »

michaelscott wrote: post #42
r_smart wrote: post #11

Earlier quoted context omitted.

>Rent shouldn’t be anywhere near comparable to mortgages. How am I supposed to rent you a house if the rent you pay is less than the mortgage I have on the house? How do I build a pool of money to use for repairing the things that inevitably break?

The rent you charge is for providing a domicile, I as a renter couldn't (and shouldn't) care whether this is enough to deal with repairs, especially since you as owner are certainly not repairing things every single month. If the rent is more than the mortgage why would I rent? Beyond potential credit problems (which can generally be solved within a matter of months barring egregious exceptions) and maybe conveyancin…

>If the rent is more than the mortgage why would I rent?

Because owning a property involves putting money down, maintaining, being exposed to market value fluctuations, etc. on a very expensive and relatively non-liquid asset.

Sure, buying would mostly have been the right financial decision in the Bay area at least over the past decade for most people. But, especially if I don't want to deal with home ownership, can find an attractive rental property, and want to maintain flexibility, paying a premium to rent can absolutely make sense.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#50

Post by JoeAltmaier »

emodendroket wrote: post #46
sharemywin wrote: post #28

So, they are using housing data without taking the bubble into account. They will make money for a while until the market turns then they will lose money when their holdings are 20-40% underwater then it will take 5-10 years before their investment is above water. And the rental market will tank at the same time so, good luck with cashflow. Now let's add maintenance, upkeep etc.

Who's "they"? This article seems to mostly be about OpenDoor offering to buy homes not in need of major repair and turn around and sell them in 90 days, all while collecting smaller-percentage fees that traditional sellers would. I'm not sure this model is as crazy as you're making it sound. > “The vast majority of investors who hear about it initially think it’s a bad idea,” said Stephen Kim, an analyst at Evercore…

Gotta deal with the lemon issue though. You make one mistake buying, and you have a quarter-million-dollar problem. Takes a lot of transaction fees to recover from that?
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