4 Ways Artificial Intelligence (AI) Is Improving Real Estate

Buying or leasing a new home will always be a gamble, but technology is quickly helping to improve the changes of consumers finding their ideal home. Artificial intelligence (AI) is starting to play a role in the real estate industry, offering tools that investors can use to help buyers and sellers maximize their earning potential. The technology is also helping to match deals with prospective buyers, while also offering a slew of analytical tools to monitor risk assessment and to predict the chances of a loan defaulting based on a consumer’s financial portfolio.

Companies such as California-based Opendoor have been making an impact in the industry, raising a whopping $320 million to buy single-family homes with the use of machine-learning algorithms to identify investment opportunities and determine the right price. The company then puts those properties up for sale on the Internet. Startups such as Leverton and Counselytics are also making a change, selling software that examines lease contracts, compiles data and makes smart decisions. Intelligent automation company WorkFusion is selling sophisticated software for companies seeking to optimize their real estate needs with intelligent analytics and by streamlining repetitive work processes.

Here are four ways AI is changing the real estate world:

1) Property Management

AI has a role in property management thanks to its ability to monitor and predict when a home’s maintenance systems need to be replaced. The technology can also keep tabs on rental trends in certain areas and raise tenant rates based on this data once a lease expires. Other factors can also be examined, such as building automation and expansion analysis to determine potential returns based on metrics that impact rents, expenses and profits in the rental sphere. One such company is Zenplace, which uses AI to streamline processes for tenants, landlords and property managers.

2) Data Analytics

Big data also has an essential role in the real estate industry thanks to the wide arrays of information available about customers and the industries that real estate companies have at their disposal now. Software developers are helping these companies use AI algorithms to analyze data and improve multiple facets of their business, such as targeted marketing, financial and accounting and appraisals. AI helps to break down a growing index of information regarding variables that could affect the price of a property. The technology can also set income and growth goals through an intelligent robot, which can make adjustments as data changes to help investors reach their financial targets.

3) Predicting Risk Assessment and Loan Defaults

With AI, real estate investors can eliminate much of the risk and guesswork involved in property investments. Smart robots can assess a property and perform a detailed risk analysis report on it, while also predicting how much money an investment could return. These bots can also predict loan defaults with the purpose of increasing the efficiency of the risk assessment process, pushing borrowers to avoid less profitable ventures and stick to properties that will offer the highest return.

4) Intelligent Search Platforms

About 51% of homebuyers began their house-hunting process online, which is why AI is creating intelligent search platforms that could benefit everyone involved. Most of the major search engines are using AI to help users get more data from a basic property search. In the past, brokers, investors, property buyers and sellers had a limited amount of information at their disposal such as the price and location of a property. With AI, prospective homeowners and investors can look at ROI, good neighborhoods and other details. The recent Broker Vs Bot challenge found that a bot was capable of finding better deals for investors and homeowners when compared against three top-tier real estate agents.