Role of AI in Real Estate – What’s Happening Behind the Scenes?

The real estate industry has been going through a lot of changes inspired by the emerging AI technology in recent years. Today, it’s not just about placing a listing sign in front of a house and expecting prospective buyers to walk in and just make a sale. Neither is it about purchasing properties anywhere just because “real estate always appreciates.”

The role of AI in real estate is now very significant in the entire real estate investment process. Whether you’re a buyer, seller, or property manager, there’s probably a brilliant application of AI that can help you get the best out of your real estate engagements. From the lease documentation to the property tours and every other point in between the property management lifecycle, there’s at least one AI tool redefining the norms. 

If you’re hoping to stay active in the real estate market, you’ll be doing yourself a huge disservice if you’re not aware of these AI applications in real estate. More importantly, you should also know about some real estate AI tools leveraging artificial intelligence in real estate applications. 

Without further ado, we’ve discussed the role of AI in real estate in the few points listed below. 

Let’s get into it! 

Key Innovations You Need to Know

1. Automating Lease Documentations

Lease documentation can be difficult to read and follow. It often contains so much legal jargon that even the most experienced property managers might need assistance. Meanwhile, it is only supposed to guide and inform the parties involved in a real estate deal and even shape the terms of the deal. 

Most of the time, these parties only want to know their obligations, rights, and how they should behave. We’re talking about key themes like how much rent is expected monthly and the regulatory demands they’re expected to follow. 

This is why automating lease documentation is one of AI’s most promising roles in the real estate industry. Generative AI models’ ability to scan vast amounts of data and abstract the most vital details proves vital in the real estate industry because they can help extract the key terms and conditions in extensive lease documentation. But that’s not all they can do. 

They can also create tailored lease agreements according to unique details like tenant details, property specifications, and lease terms. The best part is that these generative AI integration services can be automated. This means that lease renewal and management processes can become more proactive and data-based. AI also makes it easy for real estate management agencies to maintain a centralized data repository for lease documents since the entry documentation process is managed using the same AI tool.  

More specifically, the following are some ways AI is making lease documentation better: 

• Data extraction and compliance
• Payment and renewal reminders
• Automated lease document creation
• Data-driven lease negotiation
• Simplified transaction workflow

Consequently, the lease documentation process becomes more accurate and efficient. Furthermore, both real estate investors become more compliant, leading to better tenant experiences. 

2. Automating Property Management

While real estate management can be very lucrative in the short and long term, the day-to-day processes can be challenging, as there are countless roadblocks. This especially applies to real estate agents and property management agencies that manage multiple rental properties in different physical locations. 

The following are some common challenges commonly associated with traditional real estate property management processes: 

• Delayed or non-payment of rent
• Maintenance issues
• Legal compliance challenges
• Time management
• Inaccurate data management
• High tenant turnover rates

However, by automating routine tasks using sophisticated AI tools, property managers can focus on more high-value tasks, thus leading to better overall outcomes. For example, AI-driven platforms can automate routine operations like rent collection, maintenance requests, and rent collections. This automation not only enhances efficiency but also improves tenant satisfaction by meeting their needs on time. And you know what that means? Greater tenant retention and overall greater profitability for property management agencies and property owners. 

Property management software like Domos leverages AI capabilities in its Domos AI assistant tool. This tool helps property managers and management agencies automate tasks and communicate with residents via email, text, and voice. Furthermore, it helps file work orders, follow up on rent payments, and coordinate schedules. It is basically the perfect personal assistant for property managers. 

3. Smart Lead Generation

As in many other industries, AI has the potential to help property owners and real estate management companies generate more leads and automatically make more properties sell. When property owners and agencies want to reach a new client base, they traditionally employ conventional lead-generation strategies like cold calling and generic advertising. While these methods have proven successful in the past, there are simply better ways of doing that right now. More so, the conventional methods often require significant time and resource commitment. 

Some more problems associated with these conventional lead generation methods include: 

• Low conversion rates
• Time constraints
• Inconsistent lead quality 

However, introducing AI capabilities drastically changes things. First, AI tools can always analyze complex patterns in user behavior data, telling lead generation specialists all they need to know about reaching and converting new customers. Second, AI tools can help real estate professionals automate lead qualification and nurture prospects so that closers can focus on only high-value prospects. For example, AI chatbots can engage with website visitors 24/7, answering questions and collecting important information without any human intervention. 

So, AI brings a smarter, data-driven approach to lead generation, streamlining the entire process and improving the conversion rate. 

4. AI-powered Property Search and Recommendation

Homebuyers, real estate agents, and investors alike often face related problems when searching for, listing, and buying their desired properties. 

Homebuyers sometimes get frustrated whenever they have to sift through multitudes of listings that simply do not meet their requirements and needs. Real estate investors, on the other hand, need to consider multiple investment factors like historical price trends, nearby amenities, and the prevailing standard of living before making the right investment choices. And real estate agents, in the middle, find it difficult to merge these two groups of entities with matching interests. 

The superpower of AI algorithms—the ability to analyze vast datasets and glean actionable insights—comes to the rescue one more time. This is beneficial to homeowners in that these algorithms can consider their lifestyle preferences to suggest the right properties for them. These insights can also be used in filtering systems on real estate search engines. 

Likewise, real estate investors can get better recommendations based on their risk appetites. Emerging AI technologies like geospatial intelligence can also help pinpoint emerging hotspots. Finally, AI-powered real estate CRM systems assist real estate agents in understanding client preferences and sending targeted property suggestions. For example, Zillow’s Zestimate uses machine learning models to predict a home’s market value based on historical pricing data. 

In general, AI-powered property search enhances home buying by providing smarter recommendations and personalized real estate experiences. 

5. Predictive Analytics for Market Forecasting and Risk Assessment

This role coincides with the use of AI for property search and investment recommendations. Predictive analytics is the process of using data to forecast future outcomes. In real estate, property management firms can benefit greatly from knowing what the future holds for real estate assets in various locations based on past occurrences and projected future outcomes. These insights help home buyers, property managers, and investors make the right decisions about buying, selling, or developing properties. 

For instance, AI tools can analyze demographic shifts and local economic conditions to speculate which areas are likely to experience growth and yield higher returns on investment. This allows investors to identify and capitalize on investment opportunities before they become mainstream. 

While real estate management entities have been using traditional approaches for this purpose in the past, they often encounter some major problems that AI can help address. 

Some of them include: 

• Data overload – it’s not easy to analyze and interpret the huge amounts of data associated with multiple real estate properties
  
  
• Inconsistent data quality: The data sources can be inconsistent, leading to inaccurate forecasts and poor decision-making. 
  
  
• Market volatility: The real estate market is always fluctuating, and it can be difficult to track these changes with manual data analysis. 
  
  
• Limited historical data: In some areas, especially emerging markets, the amount of historical data available may not be enough to make accurate predictions. 

However, since AI can process large amounts of data quickly and accurately, making these predictions becomes generally easier and more accurate. For example, CBRE leverages Ellis AI to help commercial real estate companies make better predictions with advanced analytics, automated workflows, and predictive insights. This model helps investors time the market better and make strategic decisions based on real-time insights. In general, AI is enabling real estate professionals to forecast market trends and assess risks effectively. And as the technology continues to increase in capacity, its role in helping players in the real estate industry make better decisions will only get more significant. 

6. Virtual Property Tours

Let’s say a real estate agent is taking a prospective buyer on a property tour. When they walk in, all the buyer sees is sometimes the space or the old arrangement and structure left by the previous owner. While some people have an eye for their desired look, others struggle to see the potential, and this limits the agent’s chances of a sale. 

A similar issue also arises if the real estate agent is trying to show a potential buyer who’s in a different location. Maybe they get some pictures or videos of the property, but we all know that doesn’t always do justice to the space most times. 

However, bringing in the immersive possibilities of AI, AR & VR technologies has a massive potential to turn that experience around. Whether buyers are viewing a property remotely or in person, the chances of thrilling the client and triggering a sale are much higher when you deliver an immersive experience. These immersive experiences can be delivered with the help of AI-powered virtual property tours, as they focus on realism, interactivity, and accessibility. 

Giraffe360 is a significant player in this space. This self-acclaimed “world’s best-rated property camera” leverages robotics camera assistance and over 50 machine-learning models to produce immersive virtual tours that include floor plans and detailed property information. As a result, potential property buyers can visualize the features and layout of a home before scheduling an in-person visit. Imagine what this does for international property management agencies trying to appeal to people relocating to a new location. They get to view multiple properties before moving, making the entire relocation seamless. 

And for the real estate management agency or property seller, it means you’re already ahead, making sales before new clients even touch down. 

Related Read: Real Estate NFT Marketplace Development: Step-by-Step Guide

AI Solutions for Marketing Your Real Estate Agency 

The different applications discussed above are some of the major roles AI is playing in the real estate industry. Suppose you’re trying to leverage some of these existing benefits. In that case, some AI platforms and tools are already making it easy for real estate agencies like yours to market their properties properly. 

The table below lists some of these AI tools for real estate agents and the different applications you can use them for. 

Conclusion: The Future of AI in the Real Estate Industry

As AI research intensifies, AI will only play a greater role in real estate in the coming years. One area poised for significant exploits is the use of AI for architectural designs and virtual property visualizations. 

For now, AI is already killing it with lease documentation automation and automated property management. The use of predictive analytics capabilities in real estate investment decisions will also only spread and become sharper. 

Amidst these numerous possible applications, the only clear thing is that there’s a huge opportunity for those who can see the vision. With the right AI development company, real estate management agencies can leapfrog the competition, and now is the right time to take that leap. 

Frequently Asked Questions (FAQs)