The real estate industry has always been known for its slow adoption of technology, but that's about to change with the rise of artificial intelligence (AI) and Machine learning (ML).
From property valuations to transaction management, AI has the potential to revolutionize the way we buy, sell, and manage property. Real estate apps that integrate AI and Machine learning (ML) can provide personalized and data-driven experiences for users, making the buying and selling process faster, more efficient, and more transparent.
In this article, we'll explore how AI is set to transform the real estate market and why your real estate apps need AI to stay ahead of the game.
How AI Is Transforming the Real Estate Industry
1.Making suggestions to customers
If you've ever used Amazon to shop, you've probably seen how recommendation engines operate, but the technology is much more widespread than just the retail industry.
By improving the relevance of their offers and pinpointing their targeting, large estate agencies with 100s or even 1000s of properties on offer can save their clients a significant amount of time. Based on a client's preferences and prior viewings, AI can produce custom property listings. Even more impressively, it can employ profiling techniques to present appropriate offers to first-time customers based on demographic characteristics or items that were successful with clients who were similar to them in the past. Compared to manually looking through ever-expanding real estate databases, AI is far simpler.
2.Doing market research
Predicting future events, whether they be related to intricate markets or global weather patterns, is one of the most fascinating uses of AI. Particularly in this sector, enormous transformation in the commercial world is possible. The capacity to foresee market changes is somewhat of a holy grail to investors in a sector like real estate where the stakes are so high.
AI can forecast future rent and sale prices, recognize current market trends, and even uncover new investment opportunities when combined with human experience and data-based analytics and predictions. Since the real estate market depends so heavily on time, these methods can minimize risk and increase ROI.
3.Providing streamlined customer service
It is unpleasant to pick up the phone and wait in line for an unknown period of time. Our busy schedules have seriously hampered customer service in almost every industry sector. Maintaining a fully staffed call center is neither economically feasible nor even desirable for smaller real estate agents.
Thankfully, chatbots with AI can easily handle the majority of customer service inquiries and save up to 30% in customer support costs. They can be just as effective as estate agents themselves in particular situations, including when recommending real estate. Customers can communicate with them in a manner similar to that of an agent thanks to recent developments in natural language processing and machine learning.
4.Support for smart contracts
The widespread adoption of smart contracts will enable a new era of more effective data-driven transactions and allow companies to expand more quickly than ever. Smart contracts can be used in real estate to generate immutable transactions from a variety of inputs, removing human error and reducing processing time. Smart contracts can be executed without the need for human intervention thanks to pre-set rules. To lessen the danger of fraud, these criteria can be used to verify the authenticity of the transaction and compare contracts to established standards. Real estate transactions will eventually be as simple to do as online purchases one day.
Using AI to Change the Real Estate Market
The global AI in real estate market size is expected to grow from $337 million in 2019 to $4,263 million by 2024, at a CAGR of 65.3%. Here are three positive ways AI could influence real estate investment:
Preventing future problems
When something goes wrong at a property you own, costs can build up. There may be substantial call-out fees if the problem needs to be handled right away. Having a strong team of dependable handymen, contractors, and property managers close by can help with this. Having said that, there will inevitably be some issues, particularly if you have a sizable portfolio of properties.
AI might make it possible to foresee when maintenance will be required. AI might determine precisely when maintenance might be necessary by examining sensor data from properties, and it could even plan the work itself. For landlords who have a number of properties to handle, this will be especially helpful. AI might also determine if a property's possessions are being mishandled and offer tenants advice to reduce the need for maintenance.
Automating the household
Utility costs can be very high when renting a house as an HMO (house in multiple occupations), i.e., per the room. This could be due to valid causes, but it could also just be that tenants forget to turn off the heat or lights when they leave the house. There are several things you can do to lower these dangers, like turning on the motion sensors in the hallway lights in communal spaces so they are not left on when no one is around. The thermostat can also be remotely controlled using smart technology.
This may be developed to a completely new level with AI. AI can identify the precise patterns of tenants' arrival and departure from the property and set up the environment accordingly. Things like TVs can be completely turned off while no one is home, and when someone is anticipated return, they can be placed in standby mode. The time tenants often wake up in the morning and the weather can both affect heating. If properly managed, this will result in improved experiences for tenants as well as cheaper costs and better environmental effects.
AI market research
There are numerous approaches to forecasting how real estate prices will change in a specific location. You can check out neighborhood redevelopment plans, historical trends, and firms that are moving in or out of the area. Because humans are unable to effectively process millions of data points in their heads, this can require several hours of investigation and ultimately has limitations. AI, however, is able to.
AI might analyze the area's millions of data points to determine what they have meant for nearby locations. It might analyze news, crime statistics, new business openings, business registration data, and more to forecast market trends and prospective investment opportunities.
Those that have access to this kind of software as an investor will be at a unique advantage and be able to spot chances that other investors pass over.
For a deeper understanding of how artificial intelligence can transform the real estate sector, our partners at Peeklogic have provided unique analysis and expert opinions. Check out their detailed article "ChatGPT and Salesforce Integration: A Powerful Pair for Real Estate Professionals", where the benefits of integrating ChatGPT with Salesforce and its impact on real estate professionals are discussed.
The Risks of AI for the Real Estate Sector
Although AI has many benefits for the real estate sector, there may also be some drawbacks. While utilizing any new technology, it is crucial to put the proper precautions in place and to exercise caution where necessary.
There are privacy issues to think about with growing AI property monitoring. Renters might not appreciate AI tracking their behavioral tendencies. They should be consulted on the implementation of this technology, taking into account any worries they may have.
It's also conceivable that AI might make mistakes. It might turn items on when nobody is home or off when they are in use. It's also conceivable that a small number of dishonest landlords will employ technology to restrict the use of services like heating. The AI must be properly used by tenants and have the possibility to be overridden when necessary.
Investors may potentially run the danger of AI. It won't be able to verify the work of the AI if it is taking into account millions of data points. It might have interpreted something incorrectly that no human would. It will be crucial for investors to conduct independent research and avoid relying too heavily on artificial intelligence.
Why Are AI and Machine Learning Necessary for Real Estate Apps?
Real estate has finally understood the promise of cutting-edge technology like AI and ML when combined, much like practically every other corporate sector. In fact, MSCI forecasts that in a few years, global corporate acquisitions would increase by 9.6 trillion.
Real Estate with AI & ML
AI and ML have a significant impact on practically every area of the data-driven real estate market, including property searches, consumer purchasing habits, sales tactics, investment management, construction, and more.
Using advanced technology, such as smart homes, it is possible to create innovative designs and even preview units before construction.
Some of the questions that can be answered with AI & ML enhanced software include:
- Would elevators be able to detect overcapacity and raise an alarm?
- Is there a good return on investment in installing solar panels on the roof?
- Can it identify the primary buyers and residents once the building is complete?
AI & ML: Propelling the Real Estate Industry to New Heights
- AI-powered software generates leads in the e-commerce and real estate industries.
- Technology streamlines property search by allowing users to filter results based on specific details and provides 3D models and wearable tech for virtual property tours.
- AI software simplifies property management by automating tasks such as maintenance, tenant applications, and background checks.
- AI and ML integrated with CSR systems save time and remove 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 gauging nearby facilities.
- AI and ML simplify loan management by providing agents and investors with all the necessary data and documents.
- AI and ML aid in mortgage calculation by removing errors and producing a precise outcome for informed decision-making.
In conclusion, the real estate industry is on the brink of a technological revolution, with AI poised to transform the way we buy, sell, and manage the property. From improving the accuracy of property valuations to streamlining the rental process, AI has the potential to make real estate transactions faster, more efficient, and more transparent.
As the industry continues to evolve, real estate apps that integrate AI will be better positioned to offer users the personalized, data-driven experiences they crave. By harnessing the power of AI, real estate professionals can stay ahead of the curve and deliver the high-quality service that buyers and sellers expect in today's fast-paced, technology-driven world.
Why is AI important in real estate?
AI in real estate streamlines tasks, boosts decision-making, and tailors experiences. It predicts values, gauges market trends, and handles admin chores. Buyers benefit from AI chatbots and property matches, while agents get help in leads and risk evaluation. AI adds efficiency and precision to the sector.
What are the disadvantages of AI in real estate?
AI in real estate can lead to valuation errors, miss human insights due to algorithm reliance, and cause job losses in admin roles. Privacy issues arise from data collection, and AI decisions may miss the human touch or local knowledge. Biases in AI can also reinforce market inequalities if unchecked.