There’s great optimism associated with the promise of VR, and revenues from this industry are expected to reach $13 billion in this year. Despite the optimism, widespread adoption of VR has remained elusive. For real estate, however, the potential of VR is becoming a reality quickly.
VR is a newcomer to a real estate industry heavily focused on customer experience and ease of access. There exist many pain points in real estate that VR solves for renters and investors. These include buying or renting a property sight unseen, touring homes with potential renters, envisioning fix and flips, and so much more. In short, VR is changing the real estate world. Here are some of the ways that investors and tenants will be affected — for the better.
1. Home Touring & Selling Efficiency
The biggest positive impact on real estate investors is the use of VR for touring homes. This applies not only on the buying side, but when renting out properties as well. Sophisticated software companies can now stitch together photos and videos taken with specialty equipment to provide an interactive and 360-degree rendering of a space.
Rather than driving around for a day to see five properties, real estate investors can view 30 properties before lunch with VR. This also applies to real estate professionals who want to sell a property. Oksana Tunikova from Rentberry explains, “Previously, potential buyers had to travel to visit a property. Now, this step can be skipped thanks to VR. There’s no limit on the number of people who can view the same property at one time, and potential buyers can see dozens of properties in a fraction of the time.”
Due to the increased selling efficiency, many innovative real estate brokers are factoring VR into their marketing strategy. This includes Glen Henderson, Realtor at Alliance Group Real Estate, who has integrated VR in his marketing funnel. He notes, “Not only have we seen an uptick in inquiries on our homes, we have also received offers based on a virtual walkthrough of the home.”
2. Buying Sight-Unseen
Many real estate investors, including myself, have purchased a property sight-unseen. In fact, a recent study found that a third of homebuyers have made an offer on a property sight-unseen. When doing these kinds of deals, buyers’ level of comfort is diminished due to their inability to view the property physically.
Similarly, overseas buyers and sellers can now experience a property through VR without having to travel physically to the location, which costs time and money. Andreas Johansson of Berkovitz Development Group elaborates: “For a company like ours that sells properties thousands of miles away, it means we no longer have to wait for customers to travel to visit the site. Instead, we can show it to them in the comfort of their own homes.”
Buying sight-unseen may be your only option with new builds. Developers typically have a couple model homes or condos, but they won’t have one for all their layouts. In these cases, VR can help fill the imagination gap of prospective buyers. For instance, Virtual Xperience has developed solutions for builders to generate VR visualizations of unbuilt environments. Johansson says, “VR will be a game-changer for all developers; you no longer have to rely on basic renderings to showcase your project, clients can now see through VR what they’re buying, and developers can get deals done quicker.”
3. Fix and Flips 2.0
One of the biggest game-changers for real estate investors is the use of VR for fix and flips and renovation projects. Real estate investors are painfully aware of the challenges associated with visualizing an end product and then communicating that with your contractor and renovation team. Investors involved in rehab projects can leverage VR to instruct their renovation contractors on exactly what project should look like at various stages.
Paul Lisanti, a real estate sales representative, notes that by “using VR to superimpose improvements (new furniture, paint, decor, etc.), investors can get a better idea of what proposed renovations will look like, and ultimately cost.” And, as many real estate investors work in joint venture partnerships, VR is a great way to show other investors the progress of a renovation project.
4. Advertising Rentals with Quality Leads
The bread and butter of any good real estate investing business is marketing your rentals. The difference between an 80 percent or 95 percent vacancy rate, or a long-term tenant versus one who leaves after ten months, can be financially devastating. This is why finding the right tenant, at the right time, is the linchpin of any successful real estate investing business.
Creating a seamless tour of your property will not only draw high-quality tenants, but will help you fill properties quicker and reduce vacancy. As Elizabeth Gibson, CCO at ezLandlordForms, puts it, “VR tours are a huge time-saver for landlords and potential tenants, especially when the would-be tenant lives across the country or abroad. Most investment property managers are more than happy to dispense with traditional in-person tours. They are already juggling many tasks, and there’s nothing more disappointing than giving up an hour or two to show a unit, only to have a no-show.”
Consider TorontoRentals.com, which uses Matterport VR technology to showcase rentals on its website in 3D and virtual tours. Matt Danison, CEO at TorontoRentals, reports, “Virtual reality will increase the quality of renters who come to view the property. They’ve already experienced the immersive tour and are no longer simply ‘tire-kickers.’ We’ve found that this saves time for landlords, property managers, and real estate agents who want to show the property to serious renters.”
5. Improved Tenant Communication
Finally, as real estate investors we often struggle with tenant communication. How do you work the laundry? The security system won’t work for me! Where is the switch board and how do I use it? We’ve all heard these common questions. Through VR and virtual tours, instructions for these tasks can be relayed to renters through an accessible video library.
Gibson concludes, “Communication hurdles will be demolished as the use of VR grows, and will evolve quickly as cranky tenants and tired landlords discover new uses that solve common tension points.”
Tenant communication is even more important for real estate investors who specialize in short-term vacation rentals. In a recent industry study, 87 percent of vacation rental managers said they want to improve their communication with guests. VR can help facilitate better communication by showing visitors exactly how to do or find something in a vacation rental, or even where to go in your neighborhood and city. Because of the high turnover rate in vacation rentals, effective communication is even more critical than traditional long-term rental situations.