Just like every other industry professional, real estate investors are finally starting to discover the benefits of using artificial intelligence (AI) in their everyday lives. Although it can’t fully replace human input, that’s not why it’s so powerful. AI augments the human touch. It helps investors easily manage large amounts of data, gather useful insights, and get repetitive tasks done faster so they can focus on building their portfolios.
When used right, here’s how AI helps property investors become more profitable.
1. AI helps with document creation
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Property investors need a variety of documents, including lease agreements, lease addendums, and official tenant notices. It takes a lot of time to draft these documents, even with the help of a lawyer. However, many property owners are now using AI to create document drafts. They still require manual review to edit and insert important clauses since AI can’t be trusted to get all state and local laws correct, but it’s an easy way to get the outline started.
For investors who don’t already work with a property manager, using AI to draft their documents saves significant time and money. The other option is to hire a full-time professional team that has access to an attorney. For example, Dallas property management company Green Residential has an attorney on staff who creates and reviews all the documents for their clients.
Using AI is no substitute for genuine legal advice, but it can speed up what would otherwise be a cumbersome process.
2. AI can manage mundane, repetitive tasks
While property investors would love to spend more time on the tasks that directly generate more income, like searching for new properties to buy, they’re often bogged down by mundane tasks that can’t be skipped. For example, sending out notices to tenants and searching for new listings. Thankfully, AI can do these tasks and many others with ease.
There are so many different real estate apps you can get to tackle everything from simple to more complex tasks.
3. AI can predict profitability
One of the coolest benefits of using AI is that it can predict a property’s profitability based on massive amounts of historical data. AI algorithms can process enormous collections of data almost instantly, far exceeding the capabilities of a human being. Being able to derive data-driven insights from a larger pool of data can increase the accuracy of those insights.
For example, instead of using appraisers, many investors are using Automated Valuation Models (AVMs) that value properties based on images and data. Mortgage lenders also use AI to make underwriting decisions based on how AI calculates risk.
Thanks to AI, investors can now get the information they need to decide whether or not to pursue a particular property before having to commit to the purchase.
4. AI can enhance acquisition strategies
Good AI systems can help real estate investors come up with more effective location strategies, invest their money more wisely, and stay on top of changes in the market. For commercial landlords, this is especially important because shopping patterns change over time and what may have been a great location ten years ago might not be that great today.
AI-powered tools for property owners work with real-time data, which eliminates the potential for making decisions based on outdated information. For instance, some tools generate recommendations for new properties after sifting through potential leads and narrowing down the final selections based on the investor’s preferences.
5. AI can help investors understand their market
Whether an investor owns residential or commercial rental property, understanding the market is crucial to getting the right tenants, keeping them happy long-term, and maintaining profitability. Not knowing the market is actually one of the first and most detrimental mistakes new investors make. It’s fundamental to success, and there’s no way to succeed without having a firm grasp of your market. The problem is markets vary from property to property when they’re located in different areas, which is why AI-powered market research is so helpful.
AI creates a better experience for investors and their tenants
Overall, the use of AI in real estate makes life easier for both tenants and investors, whether they’re managing their own properties or using a professional property management company.
Time is money, and that’s why investors who value their time are taking full advantage of AI to expand their portfolios and increase profits.