Industry after industry continues to change as new technologies emerge that efficiently and effectively reduce risk, increase profit, and track trends. Now, thanks to the rise of artificial intelligence (AI), real estate investing is starting to change, too.
Investing in real estate can sometimes seem akin to juggling: with multiple risks up in the air, the risk of dropping one could be detrimental to an investment. The use of AI in real estate could effectively stop those risks before they even waver.
One such risk includes finding properties that will generate a healthy return. Scouring the market for high-return investment opportunities can take a lot of time and resources. For many years, only large institutions had the money and means to use data to make investment decisions. With the data that allowed them to analyze market trends, large institutions could buy expansive plots of land and generate a hefty return. But without data, smaller investors were without the means to effectively analyze data that would point them in the right direction.
However, there are new AI tools that work in tandem with MLS databases allowing investors to search for properties with specific characteristics. Such tools can eliminate the guesswork that accompanies buying since they narrow down search results to exclude properties with a costly amount of repairs and building expenses.
“Data, being what it is today, is able to simplify the job of the investor looking for properties. Using the latest technology and advanced algorithms, smart data filters and overlays, real estate investors can access big data that provides more than names and addresses. With the wealth of data now out there, it’s a fact that the aggregation of the right data for the job can empower progress in any industry.” – Ross Hamilton, Attom Data Solutions
Artificial intelligence and big data also provide real estate investors with the means to access the financial standing of a property, thus giving them the ability to determine debt-to-value. Additionally, certain programs can also anticipate loan defaults, effectively increasing an investor’s profits and decreasing risk.
Many people believed that technology like big data and artificial intelligence wouldn’t make its way into real estate due the industry’s large reliance on human interaction. However, the combined efforts of AI and human expertise allows investors to do their job with better results and increased efficiency. Over the next couple of years, the industry’s reliance on AI is only expected to increase and gain traction as more and more investors see how beneficial adopting these technologies can be.