Can artificial intelligence be applied to real estate investing? The short answer is yes it can.
The following article can help you to be ready to take advantage of the opportunity that artificial intelligence offers to the real estate investment industry.
How? By showing you how AI is helping investors to get an advantage in a climate of rising property prices, dwindling inventories, and increased competition.
What You Need to Know About AI
Artificial Intelligence is the mimicking of cognitive functions such as problem-solving using sophisticated algorithms.
Several companies have appeared, offering artificial intelligence related products and services to real estate professionals.
Investors have already begun to use the technology to speed up the customer acquisition process and to care for mundane tasks normally carried out by someone on the payroll.
The fact is that, when dealing with data, AI is faster, quicker, more methodical and more accurate than a human employee could ever be.
Artificial Intelligence In Real Estate Investing
So How Can AI Give a Real Estate Investor an Advantage?
AI can sort through and analyze masses of data to narrow down a multifamily property that meets your specific criteria sifting through many options until only the very best options remain. The benefit is fast delivery of accurate information. This AI technology is already used in many popular property searching applications and websites.
AI can automatically input data such as detailed property specs into online databases. With AI doing the data entry the process is rapid.
A chatbot is a real-time virtual online assistant that can simulate human conversational behavior. In online ‘conversations’ with potential clients, they can answer questions and interact intelligently, data from these online chats is collected and stored. The resulting data can then be mined to generate sales.
The efficiency and economy advantages of such technology should be clear and obvious, including the time-saving advantage of filtering out interactions that are not solid leads.
Examples of Companies Offering AI Related Services to Real Estate Investors
The following information is a condensed version of what appears in an article on nanalyze.com and full credit goes to them.
Skyline is a startup company that claims its platform can tell real estate investors what properties offer the best return. It does this by taking in tons of data from more than 130 sources, taking into account over 10,000 different attributes on every property, going back as much as 50 years on every multi-family property in the United States.
Proportunity claims its machine learning algorithms can accurately forecast which homes, and even neighborhoods will experience the highest future investment returns. The platform does this by analyzing historical pricing data against about 50 metrics on location and things like transportation, crime, schools, etc. The algorithms then figure out what factors truly affect price, eventually moving to the stage where it can predict how prices will move. The machine is right about 85 percent of the time when tested against real past performance. Proportunity says it can get to 95 percent accuracy by the end of this year.
Enodo serves the commercial multi-family industry. The algorithms do it all: They can identify attractive investment properties, especially those with some fixer-upper potential. Enodo’s machine learning models can also calculate market rents, identify the rental impact on any given amenity package, and offer statistical comparisons to comparable properties.
REX Real Estate has (mostly) replaced real estate agents with AI. How does a computer sell a house? Advertising. The machine shoots out an initial batch of online ads to buyers it thinks might be in the market for a new home. The algorithms then really go to work: as the first clicks come in, the machine figures out commonalities between those who clicked on the ad. It then takes those criteria and searches out new leads based on the patterns it finds. The platform also analyzes online behavior to identify potential home buyers and sellers.
Blok is pretty niche, helping sell apartments in Finland through its online platform. It handles everything, from the paperwork to the photography. The AI part kicks in early during the process when the company’s algorithms pull housing data to produce a price estimate. The valuation is based on a variety of factors, such as the age of the apartment and its amenities.
The startup has sold more than 250 apartments and says it saved customers about $1.75 million in fees so far.
Beyond Pricing, founded in 2013 out of San Francisco uses algorithms to find the best price for vacation rentals on any platform, including AirBnB itself or competitors like VRBO. Beyond Pricing claims its users make up to 40 percent more in additional booking revenue.
Ojolabs, this listing wouldn’t be complete without an AI chatbot or two. Ojo uses natural language understanding to provide customer service on behalf of a real estate agent or brokerage. OJO can answer questions or help with home searches. For example, a customer might ask if a certain property has a backyard. It not only can confirm that there’s a backyard but add extra detail such as the fact that there are four large oak trees that provide plenty of shade in the summer.
Roof.ai has also developed a real estate chatbot. Again, the idea is that customers can ask the chatbot questions and get specific results returned on the kind of homes they are interested in buying.
First.io claims it can predict which contacts within a real estate agent’s network are ready to sell a home based on a variety of factors, such as spending patterns, employment changes and income history. Apparently it has these details on 214 million people.
The company claims its platform is used by more than 200 agents at major brokerages around the country, saying its algorithms improve the chances of a broker connecting to a potential seller by four-fold.
Artificial Intelligence has already become a billion-dollar industry in the U.S. and we all know that the real estate industry accounts for trillions of dollars of the U.S. GDP each year.
Since AI promises to disrupt every industry in the future, real estate will likely be no exception. This article has shown you what you need to be aware of as the landscape begins to change.