As both students of the real estate market and disruptors of the local and nation MLS hierarchy, we keep an eye out for trends that might impact real property investment in the near future. Artificial Intelligence (AI) and machine learning have already started making waves across society; their applications could revolutionize real estate investing as we know it today.
While we are still determining where AI for real estate might lead, we can examine recent trends to evaluate potential directions they could go in. Being mindful of such opportunities will set property owners, landlords, agents, and investors on a successful journey through an ever-evolving landscape. Let’s consider three methods AI might affect real estate markets to their benefit and assess possible risks involved with AI usage in this regard.
Predictive Property Maintenance
It can be costly if a property that you own experiences any issue that requires immediate attention – call-out fees (similar to a diagnostic fee, which is added cost to the actual repair) can quickly add up; to combat this potential cost-outlay, it would help to have access to reliable workers, handypersons and property administrators close by who will quickly address issues as they arise – especially if your portfolio includes many properties!
AI can assist landlords by helping to predict which maintenance requirements need to be addressed in advance through the analysis of sensor data from rental or investor properties. AI will determine when maintenance work needs to occur or even plan it, making AI particularly helpful to landlords with multiple properties to oversee. Furthermore, it can detect whether any have been misused and suggest tenants who can prevent any unnecessary upkeep of said properties (such as landscaping, routine maintenance and more).
More In-Depth Home Automation
Utility costs in an HMO (a house shared between multiple tenants) can quickly become extremely costly. While valid reasons could contribute, inadvertent overuse by tenants plays a part. One way to mitigate risk is activating motion detector lighting in shared hallways between residents. Hence, no lights remain illuminated when no one is around or using smart technology like a thermostat control from a remote location to remotely manage temperature from your thermostat. You would be surprised how much automated lights in designated areas may lower electricity costs, and AI may do that and more!
AI will likely elevate this process to the next level. By tracking tenants who come and go from a house and organizing its layout by them, AI can pinpoint patterns associated with tenants who come and go from it and organize property accordingly. When no one’s around the property, things like televisions can be completely turned off, while when tenants return, they switch into standby mode until return time arrives again. Heating can also be connected with weather factors and the morning rising times for optimal living experience for tenants if managed effectively, resulting in cost reduction, better environmental results, and greater living experiences for tenants themselves! If managed effectively, this could reduce costs and produce positive environmental benefits and better living experiences for tenants themselves!
AI Real Estate Market Analysis
There are various techniques for gauging property price increases within an area. One way is tracking what firms are moving in/out, looking at local redevelopment plans or studying historical trends. Although all of this takes time and can become infeasible given that humans can’t accurately process all the millions of data points stored within our brains at one time, AI could do just that better!
AI will be able to analyze millions of regional data points and interpret its implications on other areas, including crime statistics, news articles about opening or registering businesses, and more. Furthermore, this technology could predict trends for future regional markets or investment opportunities.
Investors with access to such software stand to benefit greatly, identifying possibilities they hadn’t considered previously.
AI Poses Potential Risks To The Real Estate Industry
AI offers many advantages to real estate businesses; however, there may also be downsides. Therefore, it is necessary to set appropriate protections before beginning work on new technologies; be careful and remain cautious should any emergency arise that requires your attention.
Due to increased AI-powered surveillance of properties, privacy issues must be considered carefully. Tenants might appreciate having AI tracking their activities less. Therefore, the implementation must occur through dialogue with tenants who may express any worries they might be experiencing about AI tracking their lives.
AI may make mistakes; for instance, turning off services whenever people use them or turning them back on without anyone present could happen without the notice or consent of tenants. There may even be instances of landlords using technology to restrict some services (heating), allowing tenants to make necessary modifications and utilize AI correctly and easily. Tenants must have access to this system should something go amiss or they need it altered accordingly.
Artificial Intelligence can also present a potential risk to investors. When processing billions of data points, its performance cannot be evaluated, leaving the possibility that AI may need to understand something a human would miss entirely. Therefore, investors must not rely exclusively on AI but conduct independent investigations (your own personal research) alongside that process.
