6 Ways Artificial Intelligence is Transforming Real Estate Investing

December 20, 2017 by Allen Taylor
AI in Real Estate

Real estate investing, like so many other industries, is in state of reformation thanks in large part to technological innovation. One of the most powerful innovative new technologies transforming real estate investing today is artificial intelligence (AI). Below are six ways AI is changing real estate investing for the better.

1. Chatbots – One of the most obvious ways artificial intelligence is transforming the entire real estate industry is with chatbots. A wide range of real estate companies from brokerages to real estate crowdfunding platforms are incorporating chatbots into their websites. Chatbots allow companies to save on customer service costs and optimize time spent answering questions by allowing a virtual assistant to answer common questions that don’t change from customer to customer.

2. Investor Analytics – Real estate investors can set income and growth goals and have them monitored by an intelligent robot, who can assess risk based on investor parameters and makes adjustments as necessary to help the investor reach their financial goals more efficiently.

3. Predicting Loan Defaults – Real estate crowdfunding platforms can use artificial intelligence to predict loan defaults, which increases investor profits. By predicting defaults, the risk assessment process is more efficient and platforms can focus on profitable investments while reducing nonprofitable ones.

4. Deal Matching – Real estate investors can set their investment criteria and be notified when a deal matches their criteria. For instance, if an investor is interested only in a first lien position on commercial properties earning at least 10% returns, they can set those criteria on their investor dashboard and get a list of properties matching those criteria while also excluding properties that do not fall within their desired investment parameters.

5. Construction Automation – Builders and property developers want to optimize their expenses and increase their returns, just like any investor. A new crop of tools known as proptech are being developed to help builders automate the material purchasing process that allow them to acquire the best materials at the best price from the best suppliers. By letting the robots handle materials acquisition, construction companies can cut down on expenses and increase profits using artificial intelligence as the main technological driver.

6. Property Management – Artificial intelligence can be used in property management to monitor and predict when critical maintenance systems are ready for replacement. The technology is also useful in keeping tabs on rental trends in specific geographical areas and raise tenant rents automatically when leases expire. Other property management details such as building automation and expansion analysis can be performed by property management companies to determine potential returns based on critical inputs that impact rents, expenses, and profits in rental housing.

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Artificial intelligence, and its close relative machine learning, is being used more frequently in all aspects of real estate, but its use in real estate investing allows private investors including builders and property managers effective ways to control expenses, increase returns, and manage risk using automated systems based on individual investor concerns. Technology like Sharestates’ Auto-Invest make real estate investing more efficient and effective.