Trixy Castro is the founder and CEO of TRX Capital, as well as a partner and board member of Verifee.
Throughout the years I’ve been leading a company in the real estate investment space, I’ve experienced the importance of strategically leveraging technology firsthand. Over the years, my firm has used various technology solutions, including AI-powered tools for data analytics, investor relations portals and operational workflow software.
In today’s digital age, I believe that having the right technology on board is a necessity for real estate investment firms. Selecting and implementing the right technology solutions at the right time can enable real estate investment firm leaders to give their companies a competitive edge, enhance their operations and drive growth.
Slow Down And Be Deliberate
It can be easy for real estate investment firm leaders to feel that they must rush to adopt the latest technologies on the market. After all, numerous solutions are available and technology is continually evolving.
But my advice for leaders as they think about adopting technology at their companies? Slow down and be deliberate. Don’t chase trends or implement technology just to check off a box. Implementing technology costs more than just money. It also costs the time, effort and attention of teams. Bringing in the wrong technology solutions can disrupt existing processes. Leaders should carefully evaluate their organizations’ needs to pinpoint the solutions that will help them close operational gaps and streamline processes for investors, employees and/or customers.
Not every new type of technology will be right for a real estate investment firm. For example, consider workflow automation platforms. At larger firms, workflow automation can help route approvals for acquisitions, financing and capital projects across various departments. But smaller firms may find more value in a lighter-weight document management system.
Carefully Evaluate Potential Technology Solutions
After real estate investment firm leaders evaluate their organizations’ needs—whether in asset/property management, data analytics, operations or investor relations (which I view as the four core categories)—they can start researching technology solutions. Focusing on these four core categories helps ensure the tools they consider directly address the areas where their firms can gain the most impact. For instance, a company that recently went public would likely benefit most from technology that helps streamline investor relations. Conversely, a company that’s looking to get acquired would most likely benefit most from data analytics solutions that enable its team to gain deeper insights into portfolio performance.
Real estate investment firm leaders should make researching and testing off-the-shelf technology solutions a collaborative process between themselves and their employees. Employee buy-in is crucial since they’re usually the ones working with the software on a day-to-day basis. Regardless of how good a technology solution is, if employees encounter difficulties using it, a firm may not realize the ROI its leadership was expecting. Leaders should try to pilot solutions so they and their team members can experience using the software and gauge the potential ROI before deciding whether or not to pursue full implementation.
Some real estate investment firm leaders might consider building technology solutions in-house rather than opting for off-the-shelf options. Having gone both directions in the past, I’ve had the opportunity to experience the pros and cons of each. Building solutions from scratch gave my team and me the opportunity to customize solutions to our unique business needs. However, doing so required a lot of time and money. On the flip side, off-the-shelf solutions don’t usually offer the same depth of customization but can be faster and more cost-effective to implement. That said, I’ve observed that many off-the-shelf solutions today offer extensive configuration options.
Leaders should make a habit of monitoring their organizational needs so they can stay up-to-date with technology. I recommend auditing existing tools once a year to determine if it’s time to switch solutions or bring something new into the mix.
Balance Technology And The Human Element
Technology is crucial, but real estate investment firm leaders should keep in mind that the real estate industry is ultimately human-centered. It runs on human relationships and human decisions.
Previously, I wrote about the risks of using AI in the financial services industry. What I wrote applies in this context as well. Too much technology, in particular, too much automation, can put firms at a disadvantage because they can risk losing their human touch, leading to impersonal customer experiences that can damage relationships. Moreover, a lack of or an insufficient amount of human oversight could lead to biased information that causes unfair results for customers.
Technology should enhance the work that teams at real estate investment firms do, not replace them. By using technology to streamline their tasks, real estate investment teams can focus on connecting with investors and customers—providing the personalized, proactive service that strengthens those relationships and powers growth.
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