The real estate industry undergoes frequent change, whether it comes to renting or buying. Technology is often a big part of these improvements. It has a place in every major industry, and handling property is no different. One major concept that's swept the market is fintech. 

This technology is taking over — especially among New York properties — and it's brought a wealth of gains with it. Learn about it while it's rolling strong, and you can benefit from a smoother way to invest in property.

What Is Fintech?

Fintech stands for financial technology, which aims to streamline financial services for businesses and consumers. This tech offshoot applies to numerous industries besides real estate — any company that carries out transactions can employ it.

Fintech is a segment of proptech, a portion of the real estate industry that uses technological resources to solve problems and complete tasks. Proptech involves innovations such as artificial intelligence and automation, as well as data collection and sustainability.

People often choose the newest and best methods when they want to accomplish a task. If you could streamline a tedious process that usually takes forever to complete, you'd likely pick relevant technologies. That's why buyers and renters often go to property dealers who use fintech — they offer shiny new alternatives to old systems.

The Expansion of Fintech

This efficient method of managing real estate has gained popularity within recent years. Companies are integrating principles of fintech by using blockchain technologies, digitizing their transactions and much more. The Jumpstart Our Business Startups Act, or JOBS Act, spurred the rise of fintech in the early 2010s. This law reduced some of the small-business regulations created by the Securities and Exchange Commission, which helped them secure higher funds.

Businesspeople viewed this law as an opening for new ways to earn money. They began brainstorming improved methods of managing finances and bringing in revenue. Fintech soon developed as a viable option, and it has grown ever since. Some real estate companies remain mostly traditional while incorporating technological advancements here and there. Others have fully leaned into this new sector to appeal to consumers and make their operations more productive.

New Developments in Renting and Buying

New innovations in fintech are developing fast in New York. Though California was once the capital of finance-based technology, New York City is edging in to take that title.

These advancements can make renting an apartment or buying a home more accessible to residents, especially considering the high cost of living. Here are a few areas of real estate that have benefitted:

1. Digital Mortgage Processes

Blockchain technology is a major component of cryptocurrency. Naturally, it also has its place within fintech. Blockchains decentralize money transactions by sharing them among a network rather than operating around a bank.

This technology eliminates double-spend issues and removes third parties, which lessens the costs of conventional mortgage processes. It also boosts the efficiency of property title searches and allows you to insure your place for less.

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2. Software and Algorithms

The platform Built enables banks to process their loans online, especially lenders who are overseeing construction projects. Loan lenders upload data from their construction project onto the site and quickly communicate with their hired contractors.

Collecting all their information in once place allows them to approve and manage more loans without spreading themselves thin. They can see their entire loan portfolio at a glance and make financial decisions as necessary.

3. Crowdfunding

Investors have turned to crowdfunding — also known as peer-to-peer lending — to gain direct access to the real estate market. This strategy is primarily popular among wealthy investors who meet the income and credit requirements that platforms establish. Investors lessen their risk by collaborating with developers on properties, and they also get to choose which projects to invest in.

4. Online Marketplaces

The fintech company Roofstock allows you to receive greater access to single-family housing investments. It offers numerous resources for people planning to invest in rentals, including property management tools.

You can analyze a listing's details, such as the payment history and title report, and make an offer to buy. You'll be able to remotely check in on your investment while a property manager handles the on-site tasks. Marketplaces like these allow for flexible, affordable ownership from any city.

FinTech Makes Properties More Accessible

These developments give you an idea of what to expect the next time you rent a new apartment or move to a new home. The New York real estate market is transforming to provide more access and remove the middleman.

Barriers to renting and owning can dissolve with time, but it will take broader acknowledgment and adoption of fintech. A revolution in modern housing could be on the horizon.

Holly Welles is a real estate blogger covering design, finance and market trends for apartment dwellers. You can find more of her work on her blog, The Estate Update.

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