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Artificial intelligence (AI) impacts all kinds of industries — new ones and established ones. One of the oldest industries in the world is real estate. After all, people have always needed a place to live even, thousands of years ago.
Source: National Association of REALTORS
The world of real estate has already been impacted by AI in many different ways.
And since we’re in the early stages of AI, that growth will be significant over the next decade or more.
4 Significant Ways AI Is Already Shaking Up the Real Estate Sector
First, AI can help with urban (and suburban) planning, i.e., where to build new properties, and how properties should look. As modern cities have to offer a lot more to their inhabitants compared to the past, like optimizing for energy consumption, costs, resource usage, and so on integrated urban planning is more crucial than ever. AI can analyze demographic patterns to find out where to expand. It can analyze traffic data to find out where road infrastructure needs to be built out, and so on.
Second, AI impacts how real estate is traded. Realtors can use AI tools for virtual tours, and AI-powered augmented reality (AR) allows potential buyers of homes to see what a house would look like if they were to customize it. This results in a better fit between home buyers and the properties they buy. It can also shorten the sales process and make it more efficient for both sellers and buyers.
Third, AI impacts the real estate economy. Many see real estate as an attractive investment, and trillions of dollars are invested in real estate across the globe. Artificial intelligence helps with valuing properties, by analyzing risks and by comparing pricing to comparable properties. Among the gigantic numbers of properties for sale at any given time, AI can pre-select properties worthy of a closer look which can then be analyzed by human real estate professionals, for example.
Fourth, artificial intelligence impacts how properties are managed. This holds true for the properties “managing” themselves, e.g. by automatically adjusting heating, cooling, lighting, and so on via AI-powered Smart Home tools. But AI also helps real estate managers with accounting, tenant screening, and so on. Faster and cheaper processes can then result in lower operating costs, which will benefit both tenants and owners.
How to Play AI in Real Estate
There are many real estate-connected companies investors could buy, from REITs to property developers and building material suppliers. But these companies oftentimes are cyclical or low growth, so they may not be attractive investment choices.
Investors can also invest in the companies that power the AI in real estate from the tech side. After all, AI can only be used in the world of real estate when high-powered chips train the required algorithms, be it for urban planning or investment analysis purposes. NVIDIA (NASDAQ:NVDA) is the best example of such a company that offers the tech power that is needed for increased AI usage in real estate. But Oracle (NASDAQ:ORCL) or Arista Networks (NASDAQ:ANET) are also good examples as well.
NVIDIA’s startup program Inception is partnered with several real estate tech startups, such as Fluxus, which provides AI software for real estate developers, giving NVIDIA investors additional exposure to the AI in real estate trend.
Investors can also choose among our top Artificial Intelligence picks to benefit from increased AI use in real estate, one of the biggest industries in the world, as well as from general growth in the world of artificial intelligence.
