Lately, real estate companies have invested more in AI-powered solutions, and this trend is gaining momentum in 2024. According to The Business Research Company’s report, the AI in real estate market size is expected to reach $226 billion in 2024, showing a CAGR of 37.4 percent compared to the previous year.
Improved business performance and competitive advantage are the key drivers of accelerated AI adoption in real estate. In particular, businesses adopting custom real estate software equipped with AI algorithms can improve tasks like document management, market research, and marketing.
This article delves into details of how exactly AI can help real estate companies enhance their performances.
4 Areas Where AI Can Improve Real Estate Operations
- Property appraisal and valuation.
- Document generation and management.
- Market research.
- Marketing and advertising.
1. Property Appraisal and Valuation
AI-powered software can automate property valuation and appraisal, one of the most critical yet time-consuming tasks in the real estate business. These systems can analyze large volumes of data collected across various sources (including those from property data collectors or news and social media) to run comprehensive real estate valuations. Here are some examples of such data:
- Age, size, capacity, and other physical characteristics of the property.
- Property ownership data, such as foreclosure or historical mortgage rates.
- Proximity to public transportation, hospitals, educational institutions, as well as other location-related features.
- Historical price dynamics, sales prices of similar properties, and other indicators related to the real estate market conditions.
- Location’s crime records, environmental conditions, noise level, and other external factors.
Based on this information, an AI system can estimate the value of real estate much faster than human workers could do it manually. In addition, AI analysis allows real estate professionals to identify and assess particular property investment risks, helping make better business decisions later.
2. Document Generation and Management
Creating and managing documents, including mortgage records, property deeds, and home maintenance reports, can be time-consuming for a company’s employees. AI can automate and simplify this aspect of their jobs, allowing real estate professionals to focus on more important tasks.
An AI-powered document management system (DMS) can help employees automatically sort existing and incoming documents based on predefined criteria, such as file type or content. Such a system can detect the type of incoming file (whether an invoice or home inspection report) and place it in the appropriate folder in a DMS storage, allowing real estate specialists to find necessary documents easily.
In addition, AI algorithms can help employees automatically generate any necessary documentation in different formats, such as PowerPoint, Word, or PDF. AI-powered DMS software can extract data from various sources, like an Excel spreadsheet, a database, or any corporate application storing data, and insert it into predefined document templates.
Therefore, if the solution has the proper AI functionality, an employee can simply enter a short query (such as “Create a rental agreement”) and the DMS will generate a file. Depending on its configuration, the solution can generate document content, highlight contract dates, specify additional conditions, and even tailor the content to the company's unified corporate style.
3. Market Research
Market analysis is one of the most critical yet complex aspects of the real estate business. Real estate professionals have to monitor market dynamics and research any emerging trends carefully in order to forecast property demand and prices more accurately and make the right investment decisions in the future.
Implementing AI-based software equipped with analytics automation allows businesses to streamline market forecasting and enhance the forecasts’ accuracy. For example, such a solution could be equipped with predictive analytics to forecast future price dynamics in the real estate market.
Such an AI solution would be fueled by historical data on global or local price changes, сoupled with currency fluctuation and gross domestic product data for a more comprehensive analysis. Based on this data, an analytics solution can provide recommendations to help real estate specialists improve their business strategies.
4. Marketing and Advertising
Marketing is another essential business function that can be laborious and time-consuming if approached manually, and AI can help real estate companies streamline it.
In particular, you can analyze competitors in the real estate market with AI. A marketing specialist can identify the key marketing channels the competitors use, understand which products and services they offer to customers, and highlight their pricing strategies. This data enables companies to refine their promotional methods and thus gain a competitive edge.
Further, generative AI can help real estate specialists automate content creation, be it landing page text, promotional material design, or real estate listings published on social networks. AI also allows employees to automate and personalize promotional emails or text messages, which can result in improved sales rates.
You can automate content distribution as well. For example, AI-powered social media marketing and advertising apps can distribute property listings across a company’s social networks, showing them to potential clients at the optimal time.
These apps can be integrated with many platforms including Facebook, Twitter, or LinkedIn, which allows a company to publish content to multiple social networks simultaneously and increase its audience reach. Jeff Fisher, a real estate agent from Arizona, claims that automating the creation and distribution of real estate listings helped him grow his business from $1 million to more than $10 million in just two years.
AI Is Poised to Boost Real Estate
Businesses in the real estate industry are adopting AI at an increasing pace, and this trend will continue beyond 2024. Improving companies’ performance and consequently overall business outcomes is the key driver prompting AI adoption among real estate businesses.
Document management, market research, marketing, and property valuation are just some of the real estate business aspects that can be streamlined by AI. An experienced real estate developer can help a company improve this and other business functions by building AI-based solutions and tailoring them to a company's unique workflows.
