Artificial Intelligence in Real Estate
Artificial intelligence is a complex topic. There is both fear and excitement surrounding AI, but there is no denying that it is significantly impacting the real estate industry. As defined by Forbes, artificial intelligence is a form of computer science that uses computers to emulate intelligent human behavior at a far more rapid speed than what we as humans are capable of. You can use these technologies to analyze data in ways you simply wouldn’t be able to do on your own. In this article, we will discuss how AI is being used in the real estate industry and how investors can benefit from adding AI to their real estate business.
How artificial intelligence is being used in real estate
According to CNBC, artificial intelligence helps real estate agents and investors choose which markets to focus on by analyzing how properties will perform in the future. The assumptions are based on analysis of both a markets and a property’s past performance. The technology also looks at predictions of how a market and submarket will grow on a quarterly and annual basis. Artificial intelligence is also being used to compare additional market data, including retention rates, lease terms and average vacant days, among other factors. AI can also provide sales comps, lease transaction data and operational forecasts, which helps the agent or investor understand what the competition will look like in the future.
Some of the biggest names in the real estate business are now employing AI to help buyers make decisions and assisting sellers in marketing their properties. Computer algorithms can now go through millions of documents in seconds, looking through property values, debt levels, renovations, as well as other key data points investors can use to evaluate a property. According to Lilypads, AI in the commercial real estate industry can boost productivity and lower the cost of property management. Therefore, property brokers, agents, buyers and sellers are leveraging AI to identify industry trends, estimate property market value and automate the overall process of property deals and transactions.
How can artificial intelligence benefit investors and their real estate business?
- AI can help with decision-making
- According to Millionacres, AI programs use predictive analytics to tell you more about a property’s current or future valuation. As an investor, this information is extremely important. For example, it can help you determine if a property meets your bottom line before you put in an offer. Additionally, AI may be able to tell you what returns you’ll get on your investment when it’s time to use the investor’s exit strategy.
- AI can help gain a competitive edge
- Millionacres also explained that AI will also help give an investor an edge over the competition. For instance, if an AI tool can help you get a clearer sense of a property’s valuation, it can also help you determine what to offer. By making more educated offers, you’ll be able to get ahead in today’s real estate market, where there is usually more than one offer on the table.
- AI can automate the investing process
- AI can also be beneficial if an investor is following a buy-and-hold strategy and has to deal with property management tasks on a regular basis. Just like an artificially intelligent CRM can help real estate agents manage their transactions and cut down on the number of errors, it can do the same for property management and real estate investment. In this case, automation can help with everything from data entry to lease abstraction.
In this article we discussed artificial intelligence, how it is impacting the real estate market, and how artificial intelligence can benefit investors and their real estate business. Now that you know what artificial intelligence can offer, you can decide if incorporating AI would be beneficial to your business.