The Real Estate Industry’s Transformation Through AI
- Provide suggestions for customers
The technology behind recommendation engines is not limited to the retail industry, as you may have noticed if you’ve ever shopped on Amazon. In fact, it is being used in many different fields, including real estate.
Large estate agencies, which may have hundreds or even thousands of properties available, can benefit from this technology by improving the relevance of their offers and targeting their audience more effectively. With the help of AI, customized property listings can be generated based on a client’s preferences and previous viewings. Additionally, profiling techniques can be used to present appropriate offers to first-time customers based on their demographic characteristics or on items that have been successful with clients who have similar profiles.
AI makes the process of searching through expansive real estate databases much simpler compared to manual searching. It can save clients a significant amount of time and make the overall experience more enjoyable.
- Execute market research
The use of AI in predicting future events, whether it’s related to complex market trends or global weather patterns, is a fascinating area. Its potential for bringing about significant transformation in the commercial world is immense, especially in real estate where the stakes are high. Investors consider the ability to foresee market changes as a holy grail in this sector.
AI can provide forecasts of future rent and sale prices, identify prevailing market trends, and even unearth new investment prospects when integrated with human expertise and data-driven analytics and predictions. Given that the real estate market is time-sensitive, the implementation of these methods can reduce risks and boost ROI.
- Provide a streamlined customer service
In today’s fast-paced world, waiting on hold to speak to a customer service representative over the phone can be frustrating. Unfortunately, our hectic lifestyles have taken a toll on the quality of customer service across various industries. For smaller real estate agencies, maintaining a fully-staffed call center is not practical or cost-effective.
However, with the help of chatbots powered by artificial intelligence (AI), customer service can be greatly improved. Chatbots can handle the majority of customer inquiries and can even save up to 30% in customer support costs. With recent advancements in natural language processing and machine learning, chatbots can communicate with customers in a manner similar to that of a real estate agent. In some situations, they can be just as effective as human agents, particularly when it comes to recommending real estate.
- Smart contracts support
The adoption of smart contracts is poised to usher in a new era of highly efficient, data-driven transactions and enable businesses to scale faster than ever before. In the real estate sector, smart contracts can generate transactions that are immutable, error-free, and processed at lightning speed using a variety of inputs. These contracts can be executed automatically based on predefined rules, eliminating the need for human intervention. This reduces the risk of fraud, as the criteria can be used to authenticate transactions and compare them to established standards. Ultimately, real estate transactions will become as easy as online purchases.
Changing Real Estate Market with AI
The real estate industry is expected to experience a substantial increase in the adoption of Artificial Intelligence (AI) solutions, leading to the growth of the global AI in real estate market. According to forecasts, the market is expected to expand from $337 million in 2019 to $4,263 million by 2024, indicating a Compound Annual Growth Rate (CAGR) of 65.3%.
Here are three potential positive impacts of AI on real estate investment:
Future problems preventions
As a property owner, unexpected issues can lead to significant expenses. Urgent repairs may incur high call-out charges. To mitigate these costs, it’s helpful to have a reliable team of handymen, contractors, and property managers located nearby. Nonetheless, when managing a large property portfolio, it’s inevitable to encounter some challenges.
Fortunately, AI technology can assist in predicting maintenance requirements. By analyzing sensor data from properties, AI can accurately forecast when maintenance will be needed and even schedule the work. This feature is particularly beneficial for landlords with multiple properties to manage.
Moreover, AI can identify instances of mishandling of a property’s belongings and provide tenants with advice to reduce the likelihood of future maintenance needs. Overall, implementing AI technology in property management can save property owners money and time by reducing the likelihood of unexpected issues and facilitating proactive maintenance.
Household automation
When renting a house as an HMO (house in multiple occupations), the cost of utility bills can be quite high, especially when it’s charged per room. The causes for this may be legitimate, but it could also be due to forgetful tenants who leave lights and heating on when they leave the house. To mitigate these risks, there are several steps that can be taken, such as activating motion sensors in communal areas to ensure that lights are not left on unnecessarily, and using smart technology to remotely control the thermostat.
However, with the aid of AI, these measures can be taken to a whole new level. AI has the capability to identify tenants’ exact patterns of arrival and departure from the property and adjust the environment accordingly. For instance, TVs can be turned off completely when no one is present, and when someone is expected to return, they can be placed in standby mode. The heating can also be adjusted based on the time tenants typically wake up in the morning and the weather conditions. If implemented properly, this will lead to better experiences for tenants, lower costs, and improved environmental outcomes.
AI market research
There are multiple methods for predicting changes in real estate prices in a particular area. These include reviewing neighborhood revitalization plans, examining historical trends, and tracking business movements in and out of the region. Due to the inability of humans to effectively process large volumes of data, this can require hours of investigation and still have limitations. However, AI can overcome these limitations.
AI has the ability to analyze millions of data points related to an area and assess their impact on nearby locations. By analyzing news, crime statistics, new business openings, business registration data, and other factors, it can forecast market trends and identify potential investment opportunities.
Investors who have access to this type of software will have a distinct advantage and be able to identify opportunities that other investors may overlook.
The Risks in Real Estate Sector with the Implementation of AI
While AI offers numerous benefits to the real estate industry, it is not without its potential drawbacks. As with any new technology, it is critical to take appropriate precautions and exercise caution where necessary.
One significant concern with the growing use of AI in property monitoring is privacy. Renters may not appreciate being tracked by AI and their behavioral patterns being analyzed without their consent. It is important to consult with tenants and consider any concerns they may have before implementing this technology.
In addition, AI is not infallible and can make mistakes. For instance, it may turn off devices that are still in use or turn on appliances when no one is home. Furthermore, some unscrupulous landlords may abuse this technology to restrict access to certain services like heating. Therefore, tenants should have the ability to override AI when necessary.
Investors also face potential risks associated with AI. Given the massive amounts of data processed by AI, it may not be possible to verify the accuracy of the AI’s interpretation of data. Consequently, investors should conduct independent research and avoid over-reliance on artificial intelligence.
The Importance of AI and Machine Learning for Real Estate Apps
Real estate has come to realize the potential of advanced technologies such as AI and ML, just like almost every other business sector. According to MSCI, it is estimated that global corporate acquisitions will increase by 9.6 trillion in the coming years.
AI & ML in Real Estate
Advanced technology such as AI and ML are revolutionizing the data-driven real estate market, impacting various aspects from property searches and consumer purchasing habits to sales tactics, investment management, and construction.
Smart homes are among the many examples of innovative designs made possible through the use of AI and ML. With these technologies, it is even possible to preview units before construction begins, providing an exciting new dimension to the real estate industry.
Questions that can be answered with AI & ML enhanced software:
- Can elevators detect overcapacity and sound an alarm?
- Will there be a good return on investment in solar panels installation on the roof?
- Will it be able to identify the primary buyers and residents after the building is complete?
AI and ML Drive Real Estate Industry to Unprecedented Heights
- The e-commerce and real estate industries benefit from lead generation through AI-powered software.
- Technology enhances the property search process by allowing users to filter results based on specific details, providing 3D models, and utilizing wearable tech for virtual property tours.
- Property management is simplified through the automation of tasks such as maintenance, tenant applications, and background checks using AI software.
- Integrating AI and ML with CSR systems saves time and eliminates human error in customer data reading, report generation, and contract management.
- AI and ML facilitate property evaluation by estimating rental costs and property value, analyzing crime rates, and assessing nearby facilities.
- Loan management is simplified by AI and ML, providing agents and investors with all the necessary data and documents.
- AI and ML assist in mortgage calculation by producing precise outcomes, removing errors, and enabling informed decision-making.
Conclusion
The real estate sector is on the verge of a technological revolution and AI is expected to revolutionize the way we purchase, sell and manage property. The potential benefits of AI in real estate include increased accuracy in property valuations and streamlined rental processes, resulting in faster, more efficient, and transparent transactions.
To stay competitive in this evolving industry, real estate apps that incorporate AI will be better positioned to offer users personalized, data-driven experiences that cater to their needs. By leveraging the power of AI, real estate professionals can proactively adapt to changing market dynamics and provide buyers and sellers with the high-quality service that is expected in today’s fast-paced, technology-driven world.
