AI in Real Estate: Key Use Cases and Innovations [2024]

AI in Real Estate is a new frontier in field of reality sector, the market is new and flourishing, it is have huge scope and benefits for anyone interested in future prospect of real estate market in near future, hence here in this article we will talk about this interesting new field.

You must have heard about the world’s first robot citizen, Sophia, a human-like robot that was unveiled in 2016.  Not only can she recognize human faces but can also understand emotional expressions, and will be used in the fields of medicine and education. But how is she capable of performing human-like tasks? The answer lies in the term “Artificial Intelligence.” 

Since the start of the industrial revolution, the world has seen massive technological advancements that have changed the way businesses are conducted. The 4th industrial revolution, in particular, has blurred the boundaries between physical and “artificial” objects. The adoption of AI, machine and deep learning in industries, particularly real estate, is revolutionizing the way people work. 

While technology adoption in the real estate industry is generally slow, tech-savvy individuals are aggressively implementing AI in real estate management, construction, and investing to gain a competitive edge. The pandemic induced market fluctuations were visible throughout the world, however, it accelerated the use of technologies that were already underway. 

The technology wave in real estate is not just limited to virtual reality or smart homes. The pandemic has shown how property search, data monetization, and contract management can be done efficiently through artificial intelligence. Before understanding where real estate companies can best leverage AI, let’s decode how intelligent the artificial technology is.

How Intelligence is “Artificial”?

Artificial intelligence is a buzzword that is splashed across platforms. To put in a nutshell, AI is anything that automates and increases the speed of a task performed by humans. Devices backed by AI technology are basically capable of learning from their environment (through data, off course), planning and comprehending various processes. These tools and softwares work on the principles of “collective thinking” i.e thinking humanly and acting rationally like computers.

Machine learning, which is a subset of AI, is alo taking the technology to a next level. As the name suggests, machines study and “learn” from algorithms so that they don’t have to be programmed manually. 

Now when it comes to the brick and mortar industry, AI is increasing productivity; reducing operational costs; and minimizing errors in financial, market or legal analysis. By implementing AI in real estate, stakeholders like sellers, investors and managers are benefitting in the following ways – 

1. Understanding homebuyers’s requirements
2. Estimating value of a property
3. Generating forecasts on rental rates
4. Processing massive data sets 
5. Streamlining home buying and selling process
6. Improving customer relationship
7. Generating quality leads & helping in management
8. Increasing ROI on marketing & advertising
9. Screening tenant applications
10. Maintaining records of financial transactions
11. Reducing operational and maintenance costs
12. Operating appliances through handheld devices 
13. Garnering insights on how to utilize office space 
14. Trimming down the energy consumption bills
15. Preventing device breakdowns or mishaps

How are Homebuyers and Owners Reaping the Benefits of AI in Real Estate? 

While location plays a pivotal role in selecting a house, project specifications, amenities and proximity to social and physical infrastructure is equally important. Based on attributes like budget, locality, unit type, etc, search engines filter out the most suitable properties. However, it gets overwhelming to explore every property or to choose the best amongst the rest. This is where artificial intelligence algorithms come into play. 

• AI in real estate streamlines the home purchase process by offering personalized recommendations. Instead of showing hundreds of properties, AI-enabled platforms will deliver fewer, higher quality properties that align with a users requirements. 

• Artificial technology can also be used to estimate the value of a property. Zillow’s (USA based online real estate marketplace) “Zestimates,” a home valuation model, is an excellent example of this. It takes into account factors like public data, location, market conditions, and house features to estimate the value of the concerned property. 

• Additionally, AI-enabled humanoids equipped with NLP (Natural Language Processing) capabilities, like that made at MIT, are also being used to understand a home buyer’s requirements. These robots with human features interact with customers, identify their needs, and also show properties virtually.

• While existing chatbots can answer queries of potential homebuyers, advancement of machine learning and AI in real estate will equip chatbots to answer complex questions through voice technology. 

• Smart homes constitute devices like bulbs, fans and ACs that, in reality, are not automated. However, when these electronic components are operated and managed over the internet through handheld devices like laptops and phones, they are categorised as smart devices. Machine and device breakdowns are less in AI and IoT-enabled smart homes as sensor based preventive alerts are sent to homeowners on their handled devices. 
• Also, the surge in new revolutions brought by generative AI is opening pathways to a new era of robotics. Generative AI will aid brain-to-home automation robots that would assist residents in day-to-day chores. Recently, Google unveiled the Mobil Aloha, which brought sensation to the robotics community. It is the first affordable open-source robot that can be trained in one shot and can do many intricate home tasks, such as cooking shrimp, putting utensils in drawers, watering plants, etc. This is just the beginning of a new era of home automation.

Agents Embracing the Power of AI in Real Estate

Not long ago, real estate brokers and agents spent a lot of resources and time in looking for the best property for their clients. From skimming through heaps of documents and answering customer queries to evaluating analytical information, the tasks were immense. However, with the use of AI in real estate, those days are now well behind us.  

• Customer management services (CRM), delivered through Software as a Service Solution or SaaS, can widely benefit real estate agents and brokers. This AI-enabled softwares make marketing automation highly efficient. By taking into consideration various factors, these softwares distinguish customers who intend to buy a concerned property from those who are surfing out of curiosity, thereby intensifying quality leads. 

• AI powered tools collate information like upcoming infrastructural developments, marketplace activity, nearby colleges, etc. Subjective knowledge backed by actual data and insights generated through AI-tools helps agents give forecasts on market values and rental rates of properties. 

• When it comes to handling property documents, agreements and contracts, AI in real estate outperforms the traditional “pen-paper” based management. AI and machine learning models can detect title frauds, offer suggestions on insurance policies, eliminate clerical errors and improve the information flow. This is particularly beneficial for agents dealing in commercial properties, as AI makes processing massive data sets easy.

• Quite often, potential clients prefer receiving text or an email from agents instead of cold-calling. The Internet of Things coupled with AI in real estate can perhaps, in future, address this issue. When homebuyers are on a move, IoT enabled beacons or devices can notify them about the new project in vicinity. This way, homebuyers can garner all the information related to a particular project and reach out when they actually want to purchase the property. 

Artificial Intelligence Simplifying the Work of Property Managers

From tenant management and conducting property inspections to offering legal services and bookkeeping, property managers are tasked with multiple responsibilities. With so many tasks at hand, managing day-to-day-activities does become daunting. Hence, to streamline operations in a cost-effective and time-saving way, AI can play a significant role. Here’s how – 

• In retail outlets, office spaces and commercial real estate establishments, maintenance and operation costs take a significant portion of the budget. Apart from expensive energy consumption bills, cluttered spaces also remain a cause for concern. By incorporating AI-enabled solutions, property managers can proficiently utilize business spaces. 

IBM’s TRIRIGA, an integrated workplace management system, is a solid example of utilizing AI in real estate. The software improves efficiency and reduces operating costs by gathering data through Wi-Fi and IoT sources and then giving valuable insights on optimizing workplaces. 

• What if we tell you that by using AI in real estate management, you will be able to find the right tenant in a jiffy? There are scores of AI-powered chatbots or software which proceed with only those tenant applications who meet the pre-qualification questions or criteria set by you. For example, if you have a no-pet policy and the potential tenant is comfortable with the requirement, then the software will move further with the application. 

• AI in real estate management is not limited to only applicant screening, but bookkeeping and account management is another application area. AI-enabled devices and softwares can maintain all your financial transactions including, reconciliations, rentals and tax payments.
  
• Also, the real-life application of artificial intelligence technology into real estate management is demonstrated by IBM’s TRIRIGA, an integrated workplace management system. The software enables information accumulation by using Wi-Fi and IoT sources, after which it presents useful insights on how to optimize workplaces, resulting in higher efficiency and lower operating costs.
  
• Furthermore, real estate management uses artificial intelligence to simplify tenant selection processes. The artificial intelligence-enabled chatbots or software would only shift to tenant applications that meet the pre-approval criteria decided by property managers. The software will favor the application if a rental property has a no-pets-allowed policy and the probable renter is okay with it.
  
• Bookkeeping and account management phases have been reached by artificial intelligence management in real estate. Financial transactions like reconciliations, rentals, and tax payments can all be handled with AI-powered gadgets and software. Property managers can gain these skills immediately—accuracy, efficiency, and adherence to financial regulations—by automating these tasks.
  
• AI is a transformative tool for property management, capable of boosting operational effectiveness, lowering expenses, and ensuring happier tenants. The property managers will be able to automate their workflows, optimize their resources, and make the needed data-driven decisions through the use of artificial intelligence-powered technologies.

Artificial Intelligence in Real Estate is Here to Stay

It is already foreseeable today that artificial intelligence has become an indispensable component of every industry, including real estate. Agents and brokers who implement AI-enabled technology will have a competitive edge over others and will therefore lead a profitable business. Artificial intelligence is already making home searching, viewing, and buying processes very easy for customers. Plus, interlinking AI with emerging technologies such as the Internet of Things (IoT) and 3D Printing is poised to add tremendous value to the ever-evolving real estate sector.

Given all that AI and machine learning are capable of, you might be somewhat concerned about technology replacing human analysts or brokers in the near future. Integrating automation into property search, buying, managing, and selling processes boosts your productivity and makes data more accessible. Using AI in real estate will definitely help a buyer narrow down properties that suit their needs. However, whether or not the asset is actually beneficial or how you need to work upon the legal and financial process is something that only a human is capable of convincing/explaining. Specialized domain knowledge is still required to make decisions that cater to the needs of investors.

As AI and machine learning continue to disrupt the real estate industry, all stakeholders are now reaping the benefits of this technology and will continue to do so in the future. 

AI should be seen as a technology that helps people instead of replacing their skills. By using technology, you can find, buy, manage, and sell properties faster and with more information than by doing it manually. AI in real estate will surely save time for a buyer as it will shortlist houses that match their preferences. But an experienced real estate agent’s human touch is still important for negotiating, looking at the market, and giving advice.

AI and machine learning are changing the real estate industry. Everyone in the industry is benefiting from this technology. This will continue for a long time as humans and machines work together.