Artificial Intelligence in Real Estate: The Pros and Cons
You’ll have heard a lot about the rise of artificial intelligence in real estate in recent years. Some see it as a cost and time-saving tool. Others worry that they’ll get replaced by a robot. This article looks at the pros and cons of these new AI technologies.
Artificial intelligence (AI) is no longer the domain of sci-fi movies. We’re living in a world that uses AI constantly. Architects and property developers may have already experienced some of what AI has to offer. So will anybody who’s ever engaged with a chatbot. You may not have realised that the friendly customer service rep that you live chat with isn’t a person at all.
Here’s the point. Artificial intelligence is here to stay. That’s as true for the property and building sectors as it is for the technology sector. Today’s current and upcoming professionals must prepare for an industry where AI automation is the standard. Universities must teach students about AI technologies to achieve this.
Of course, many people have reservations about what this increasing use of AI means for them. Many worry that they may get replaced by a robot. The prospect of job losses accompanies any new technology. And it’s a legitimate concern.
This leads to a key question. Do the benefits of AI outweigh the possible negatives of its use? Before looking at those pros and cons, let’s figure out what AI actually is.
What is AI?
There’s a simple concept lying behind all of the complexity of artificial intelligence. AI technologies are ones that learn from experience. They’re able to adapt based on the information that they receive from various sources. Or, it could include information that the technology gleans from the web or its interactions with people.
Chatbots, such as Apple’s Siri, represent a good example of AI in action. Siri has a basic function. It’s essentially a search engine that analyses a user’s questions. The difference between it and Google is that it’s capable of interpreting voice commands. Moreover, it can relay information vocally.
Siri can also handle a lot of admin for you. A simple voice command can make it record important information in your diary. You can even use it to create restaurant reservations. All of the while, it’s learning from you.
That’s an AI in action. In terms of the technology, artificial intelligence uses deep learning. It also uses something called natural language processing (NLP).
Siri uses NLP quite heavily. NLP changes the way that humans “speak” to computers. Traditionally, you’ll speak to a computer via a programming language. Think of the methods that you use to create digital designs. While you have various tools at your disposal that simplifies things, you can also hard code into most design software packages.
NLP reverses that process because it allows the machine to learn your language. This is still a developing aspect of artificial intelligence. But you’ll notice that technologies like Siri can distinguish between accents and even learn local slang. That’s NLP in action. More advanced versions of the technology allow an AI to parse through text data to deliver important information vocally.
Deep learning refers to how AI develops its capabilities and learns from its experiences. In essence, it’s an attempt to emulate the human brain in a machine. AI technologies use advanced algorithms and artificial neural networks to achieve this. Requiring huge computational power and training. .
Deep learning allows it to connect the dots between all of these different data points. As computers become more powerful and Big Data becomes more important. Now, let’s look at the pros and cons of AI in relation to real estate.
The Pros of Artificial Intelligence
AI proponents point to the time and cost savings that the technology allows for. Here are the pros of AI in more detail.
Pro #1 – Reducing Errors
Human error can create all sorts of problems for a property development project. All it takes is for an architect to enter inaccurate data into a model to cause issues. If you’re lucky, you catch these errors early on. But sometimes, these errors remain until construction begins. At this point, they become glaringly obvious and can often bring a halt to the entire process.
AI technologies reduce the risk of human errors interfering with a project. A machine doesn’t get tired and it doesn’t overlook key details. As long as you train it correctly, an AI will get things right every time.
Pro #2 – Superior Analytical Tools
A lot of research goes into the average property development project. Moreover, you need to constantly monitor and manage your buildings to ensure they work as intended. It’s a lot of manual work that also takes a lot of time and money.
AI technologies offer you the ability to automate a lot of that work. In the design stages, automation can help you to make buildings as sustainable as possible. It can also work to a set of data points to ensure designs meet your requirements.
An AI can help you to design better security and fire safety systems. On the micro level, it allows for smart management of the building’s heating and other systems. AI can determine the current state of a building and take measures to improve it.
Moreover, AI can help you to predict the property market. It can explore huge datasets to predict which direction the property market will go in. Moreover, it can provide information on local, national, and international scales.
These analytical tools offer a two-pronged benefit. They help you to create buildings that will appeal to more buyers. Plus, they get rid of many of the time and monetary costs of researching a potential development.
Pro #3 – Help with Transactions
The NLP aspect of AI technologies also helps developers to deal with documentation.
Drooms NXG, which is a virtual data room, offers an example of this. The software provides a space for developers to store transaction-relevant documents and information. But it also has NLP aspects that make it useful for document analytics.
The AI can examine the various documents related to the transaction to locate errors. Moreover, it can translate the data in such documents into usable information. This eliminates much of the due diligence work related to real estate transactions.
That’s just one example. There are several ways that AI can help with the large amounts of data involved in modern property transactions.
Pro #4 – 24-Hour Operation
Everybody needs to sleep. It’s one of the most basic aspects of human life. But it also means that there are hours in the day that you can’t put towards your work.
That’s not a problem with AI technologies. They work constantly without the need to ever take a break.
You could set an array of manual tasks for an AI to work its way through. Then, you can leave it to do what’s needed. The end result is faster delivery and less time spent on such tasks.
This is also a particularly useful pro for customer service. The use of chatbots on websites has become so popular because the technology never sleeps. This accounts for different time zones and allows people to get help, regardless of when they initiate the conversation.
The Cons of Artificial Intelligence
You can see how the rise of AI offers benefits to the sector. However, it also causes some concerns, particularly in terms of human cost.
Here are some of the cons of AI in property development.
Con #1 – Lost Jobs
AI can handle a lot of the manual tasks that you have to do before starting a project development. Take the research required to find a suitable location as an example. This usually requires hours of effort on your part. You may also draft in a real estate professional to help with the work.
It’s the latter party that’s perhaps under threat from AI. If an AI can handle the research aspect for you, then you don’t need to hire an estate agent. The end result is less work for the agent, which has a severe effect on their income.
Moreover, replacing an agent with an AI could cause resentment. You may find that this agent becomes less willing to work with you on selling the properties you develop.
On a wider scale, AI may threaten jobs in a variety of industries. The technology may replace anybody who works in a repetitive role. For example, those in the manufacturing sector may find that their jobs come under threat due to AI.
Con #2 – The High Costs
Implementing an AI system isn’t a low-cost endeavour. The software alone can set you back thousands of dollars. Plus, you need hardware that meets high specifications to ensure the AI keeps running properly.
Remember that an AI takes in information constantly. If it has nowhere to store that information, it becomes less useful to you. It’s likely that you’ll have to invest more heavily in storage solutions as the AI keeps learning.
Moreover, the AI technology that we have today is still in the early stages of development. Improvements to current technology will come, which means constant updating on your part. Again, this costs money.
Con #3 – No Creativity
Some property developers may see AI as a way to cut the costs of designing buildings. However, it’s unlikely that AI will prove useful for anything but the most basic of structures.
While AI can leverage huge amounts of data, it can’t replicate human creativity. On the one hand, this is a plus. It means those whose work has a creative aspect are less likely to be replaced by a robot.
However, property developers can’t rely on AI to cut all of the costs of designing a building.
An AI can’t solve a problem that it’s not familiar with. It needs constant training. Even then, it has its limits when compared to the human brain.
As you can see, AI has several pros and cons. On one hand, it’s a cost and time-saving tool that automates a lot of manual tasks. It’s ideal for use in the analysis of projects, plus it never stops. An AI can work for as long as you need it to, without taking any breaks.
However, there’s a potential human cost to the rise of AI. Its ability to automate tasks creates the potential for widespread unemployment. Moreover, an AI has limits. You can’t rely on it to create in the same way that a person can. Finally, the costs of implementing an AI system may outweigh the cost savings of using it.
Still, it’s clear that AI will play an important role in the property and building sectors in the coming years. As a result, universities must make it part of their curricula. Unfortunately, many of today’s tutors don’t have the expertise required to do the subject justice.
Archistar is currently producing AI tools to help with many stages of the property lifecycle.
If you want to find out more, contact an Archistar Consultant today.