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Drones Help you Keep Tabs on Your REITs

The following post was written by Christopher Grillo for DroneBase.

The real estate industry is no stranger to UAVs, and UAVs are no stranger to the real estate industry. In both the commercial and residential arms, real estate professionals are utilizing drones for aerial imagery as a marketing tool, and it is paying off. Based on MLS reports from 2017, real estate listings that incorporate drone footage sell nearly 70% faster than those that do not.

Perhaps because of this success, we are beginning to see drone use popularized by Real Estate Investment Trusts (REITs), certainly for marketing but also for a much more fundamental and practical purpose.

About REITs

A Real Estate Investment Trust comes to fruition when a group of people, invested in properties across many different real estate markets, offers stake in the lump sum of that investment to the public. In this sense, the REIT acts like a mutual fund, and the average joe who buys in acquires a small amount of equity that is diversified across markets.

This is a good option for a novice real estate investor, or a generally conservative investor who trusts the health of the real estate market over the stock market. Because their funds are spread across properties in offsetting or even competing markets, their bets are hedged and their risk mitigated.

Protecting Assets

While a REIT functions more like a fund investment, the commodity is tangible, and thus, when deciding on a REIT, investors are more likely to opt for those which allow them the ability to monitor their investment.

This is where drone use comes into play. Utilizing a drone, the REIT can provide aerial footage that serves the inclination of the investor to check in on their holdings. Aerial footage can also be a valuable tool for the REIT itself.

In this sense, the drone application is more akin to that of the construction and development industry, which utilizes UAV’s as a surveillance tool. When a  project is commissioned, funders can monitor progress of the construction via drone footage, which helps them anticipate timelines, and clears the line of communications between developing and construction ends.

Along the same lines, REIT’s can best oversee the status of their properties and anticipate needs for intervention like for regular maintenance through streamed drone footage.

Still Selling

Drone footage also offers REIT’s the opportunity to market to investors using the clout of the property itself, the same way a residential agent would land a viewing through a property listing.

When you invest in a company or a group of companies, you are investing in data reported over time. This could be in the form of the overall percent return of the fund itself, or the earnings of the individual companies of which the fund is comprised.

The overall performance of a REIT is available to the average investor, but this data point carries less weight as a marketing tool with regards to property. This is likely because of how investors view property investing. A property’s potential for return on investment is calculated by what it offers superficially. The factors taken into consideration have to do with square footage, amenities, neighborhood, comparable prices, and more.

There is no doubt that individual investors are more likely to buy into a REIT that offers beautiful aerial imagery highlighting all the components of a property  a conventional home buyer would look for in a listing.

To summarize, REIT’s can leverage drones to both protect and market their assets As a marketing tool, drone footage can be used as advertising content in the same way it is used in residential and commercial real estate. In addition, this footage provides a sense of security for investors, and a viable element of security for the overseers of these properties as they work to not only manage returns, but the assets themselves.

 

Tags: Commercial Real Estate real estate REIT reits
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