This is one of the PropTech startup ideas from the 1001 Startup Ideas collection of YoStartups. This business idea is about building a Real Estate Social Network Using AI & Augmented Reality. The platform based on this Proptech Startup Idea would be a source of data for property owners, tenants and brokers. It would also be a marketing platform for products and services related to real estate. The startup aims to use data to make the housing rental process easy and quick.
Market Definition for Real Estate Social Network Using AI & Augmented Reality
The Real Estate Housing Brokerage market is unorganised and fragmented. According to an estimate, there are around 200,000 brokers across the top 10 cities in India. The US market has an estimated 215,000 brokers. However, compared to the US brokerage market that earned $200 billion in revenue, the Indian brokerage market earned $2 billion.
More than 90% of people search for rental properties over the internet. While advertisement and property listing sites have challenged the local brokers, the lack of sufficient data in these platforms has not done justice to the target of smoothening the home search process. While there is a general claim that technology will eliminate brokers, that is not likely to happen in the immediate future, because brokers bring in the required expertise to market and showcase a property.
Competitor Analysis for Real Estate Social Network Using AI & Augmented Reality
Most current real estate portals list properties with primary data and photographs. They do not provide much information on the owner and none at all about tenants. Prospective tenants look through the listings and contact the owner or the agent via phone to organise a property visit and subsequent deal finalisation.
FastFox is a company that sources data from its proprietary broker networking site Broex, and uses the information to list properties available for rent. FastFox allows home seekers to check pictures and in-depth information about available properties, schedule house visits and finalize with the landlord. Networking sites such as LinkedIn is used by some brokers to manage a professional network with other brokers, and share property information. Owners and tenants do not use such platforms for rental deals.
Pain Point and Target Audience for this PropTech Startup Idea
The target customers for this business are property owners, brokers and tenants.
Property owners and tenants acknowledge that the searching and finalising a housing rental deal is difficult and inefficient. The deal is based a lot on trust and belief about each other, and this leads to disputes in many cases in spite of formal agreements. Both parties are often founding in want of easy access to data and details about the property, the person – tenant and owner, and the locality.
The housing rental brokerage market consists of small agencies of local brokers. While large real estate firms have brought in the required professionalism in the industry, their reach is limited to large properties. Brokers in the housing rental space often act on information from contacts. They do not have access to organised data and hence have not been able to make the best use of the digital advancements. As a result, their reach is limited to specific localities, unlike their counterparts in the large property segments who have no limitations on location.
Value Proposition for Real Estate Social Network Using AI & Augmented Reality
The value proposition is to create a social network platform for real estate. A profile is created for the property by the owner, giving details such as age, type, location details etc. A set of videos and images are added to the profile, which are then enhanced using an augmented reality layer highlighting the various features of the property. The software self-learns to identify the new features more accurately, that add to the brand of the property.
The users of the platform would send connection requests to the property. The owners of the property would have the option to accept/ reject the connection and classify the connection as a neighbour, current/ previous tenant, broker etc. Such connections may then add reviews/ comments about the property. Communities/ groups can be created based on the same apartment, same locality etc. The profile of such communities gets added on to the profile of the property, thus enhancing the data available.
The users get access to a vast database of properties available for rent or sale. The data of one’s immediate network can be accessed for free while the data of the second and third connections may be obtained for a price.
The platform also acts as a marketing platform for new real estate, and associated industries such as interior design, home décor products, and repair & maintenance services.
Business Model for Real Estate Social Network Using AI & Augmented Reality
There are three monetisation modes for the platform. The first is a Freemium model where data of immediate connection can be accessed for free, but the user would have to subscribe to a monthly plan to get access to data of second and third connections.
In the second model, additional services such as alerts for vacant properties, client relationship management tools, site visit management, rental agreement management etc. can be provided to brokers for a subscription fee. The third model is to sell space for targeted advertisement for real estate and associated industries.
Way to market for Real Estate Social Network Using AI & Augmented Reality
The startup should focus at first on localities that are popular residential hubs for the young and tech-savvy population. Once the concept is demonstrated and its benefits realised by the stakeholders, the firm can expand to other areas as well. It would be good to collaborate with large apartment complexes and gated communities as a way to start building the network. Partnering with local brokers would help market the concept among both owners and tenants.
Milestones for This PropTech Startup Idea
The startup should focus on creating and expanding the network in the first year. During this time the AI based AR tool would self-learn to understand the needs and tastes of the different tenant profiles, and therefore intelligently showcase those aspects of a property that matter to a prospective tenant. By the end of a year, the startup should target to expand to all major cities in the country.
Investment Needed for Real Estate Social Network Using AI & Augmented Reality
The initial significant costs are platform building cost, development and testing costs, and marketing/ networking cost. The startup should target to raise around $200-250 thousand for developing and testing the concept. Angel investors or incubators such as IDEA Lab, Brigade REAP, Pi Labs, MetaProp NYC, provide both the seed money and domain-specific guidance.
Team Capability for This PropTech Startup Idea
The core team would be comprised of Real Estate professionals and AI/ AR engineers. The real estate professions would bring in the domain expertise, while the technology experts would help build the platform targeting easy and efficient user experience.
Investors/ Expert Take on This PropTech Startup Idea
The total investments in Real Estate startups, has increased almost 40 times in the last 13 years. The total amount of investments in the first half 2018 is twice the amount of the investments during the same period in 2017. In 2018, VR and AR startups raised around $50 million in investments.
Established firms in the real estate industry have come to realise that the technology-based startups would complement the business, help in increasing reach and create organised markets in currently fragmented segments. They have therefore started to incubate many such startups.
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