Real estate and AI – a pair we didn’t know we needed and we are not complaining. The world is one pandemic wiser and the increased usage of Artificial Intelligence (AI) is paving the way for a smarter future of the real estate industry.
As there are rapid innovations in Artificial Intelligence (AI) technology, the real estate sector is starting to adapt its advancements in its operations. Ranging from real estate agents to investors, the industry participants are utilizing the power of data pipelines and algorithms to streamline their decision-making process.
Read Lilypads’ blog on how AI is disrupting commercial real estate here.
AI in real estate is the future of the real estate industry
With the rapid digitalization of real estate operations, there has been a surge in the number of data points. These involve the exponential data that the real estate investors, buyers, and other industry participants generate with their individual finances and preferences.
Hence, large organizations are utilizing AI to consolidate these user-generated datasets into a more open-source model. Further, Artificial Intelligence algorithms analyze this real estate data, market trends, and a property’s past performance in real-time and turn them into valuable insights.
So, AI in real estate helps in both streamlining the real estate investing process and predicting the future performance of a potential investment.
Now, let’s dive into the various use cases of AI in real estate.
1. Real estate and AI accelerate lead generation
AI in real estate is tremendously helpful in automating and improving lead generation processes.
Predictive analytics can collect various data points regarding a potential consumer. Then, it analyzes their buying habits, interests, and past interactions in real-time.
Therefore, real estate professionals can access the behavior and patterns of potential clients. Then they can determine when and where to target potential buyers and sellers.
Also, AI can divide the data points in the ranking of conversion chances, thereby optimizing team allocation within the lead generation teams.
In addition to this, when real estate professionals successfully identify their prospects and their thresholds, they can create highly targeted ads that increase ROI and minimize these risks.
2. Real estate and AI eases property search
AI in real estate simplifies the property search process. Artificial Intelligence and Machine learning use historical and real-time behavior real data to determine what real estate agents and prospective buyers look for. Hence such algorithms help in creating customer profiles or buyer personas.
Therefore, AI in real estate helps in delivering highly personalized preference-based recommendations by an array of search criteria like location, a number of bedrooms and bathrooms, etc that the user prefers. Additionally, most algorithms also offer alternative listings On top of the user’s search results.
3. Real estate and AI simplifies property valuation
Alternative data sources can Effectively Predict The future of investments. Therefore Artificial Intelligence eases the assessment of property values and rental values through its automated valuation model.
It is important to note that AI algorithms may collect alternative data points like location data, demographic data and geographic features, Traffic patterns in an area, usage and status of public spaces, proximity to commercial spots, alternative routes, crime rates, etc to produce a specific area value analysis.
Hence, Artificial Intelligence becomes a useful tool for real estate agents when they need to generate competitive market analysis.
In addition to this, commercial real estate investors can also utilize AI-powered predictive tools to process these data events in real-time while evaluating possible properties for investments.
3. Want automated lending? AI makes it possible!
Mortgage lending forms a crucial part of a majority of real estate transactions. But it involves lengthy documentation.
These include especially bank statements, credit history, proof of income, and others. Hence, the process becomes time-consuming and prone to inaccuracies.
But AI in real estate automates the loan underwriting process. It automates the credit assessment of a borrower from their past loan performance and even their social media activity. Moreover, AI and Machine learning algorithms can automate other aspects of mortgage lending as well. These include data gathering, the credit application phase, legal compliance, etc. Also, AI aid in risk assessment and loan defaults.
Read Lilypads’ blog to get a detailed overview of how AI is revolutionizing commercial lending here.
4. Real estate and AI helps in improved investment decision-making
As mentioned earlier, AI algorithms explore huge datasets to predict a property’s current or future valuation. Hence, investors can use this information to keep an eye on the future and accordingly take the right investment decision. Furthermore, investors can roughly estimate their returns and create an appropriate exit strategy.
Besides, a real estate investor uses predictive analytics and other Artificial Intelligence tools to get real-time insights into market trends and make data-driven investment decisions. Furthermore, they can make offers according to property forecasts and market trends. As a result, they can gain a significant edge over the competition.
As futuristic as it sounds, the AI revolution is already here
Considering the real estate industry produces copious amounts of data every day, the attention of AI in real estate remains huge. As discussed above, Artificial Intelligence adoption in real estate can generate exceptional benefits. Also, it can streamline and accelerate all business processes in a cost-effective way. Thus, the faster Real estate firms can enforce AI, the quicker they can reach their long-term objectives and stay ahead in the competition.
Hence, it is safe to say that the Proptech revolution will pave the future of real estate. Thanks to the breakthroughs in Machine learning and the combination of Real estate and AI.