Artificial Intelligence making Real Estate Investment smarter, simpler.
When Lucy Ainsworth saw that the real estate around her Toronto neighbourhood was booming, she knew that it was the right time to invest. But unlike her parent’s generation, the Senior Tax Associate did not ask a trusted local realtor, she simply went online. This generational change in approach, to seeking investment-related solutions has placed investors at the core of unmeasurable information and data. Thankfully Artificial Intelligence is here to rescue investors from the chaos of detailed analysis on innumerable investment opportunities available online by carefully connecting them to the best deals.
Artificial Intelligence (AI), in simple words, is the ability of a machine to learn and solve problems. AI has simplified the investor’s search process by connecting them to the right opportunities and bringing transparent access to reliable information on market trends, historic prices that were historically only available to agents.
Online real estate listings replaced newspaper advertisements long ago but the continual rise of AI is credited to its ability to process large data, predict trends, transparency, and most importantly ease of access to investors.
Thanks to the world wide web, a few clicks can show thousands of properties, attend or host virtual tours, review market trends and receive data but that doesn’t necessarily help in making the right decisions. Thankfully, the real estate industry has adapted to the digital era by using Artificial Intelligence to better match investors with opportunities. One might think that the old-fashioned realtors did the same, but platforms like BuyProperly have mastered machine learning and artificial intelligence tools to monitor and evaluate over two hundred thousand data points, that uncover high-value opportunities suited for each investor.
It’s no surprise that real estate data represents a treasure trove of information for a keen investor. Local insights, key market trends, sale prices, demographics and other market data can all be used to browse through listings, but not predict the future of investments. AI has become a game-changer for real estate investing as its predictive real-estate analytics enables stakeholders to make better, more informed decisions when trying to assess property values and rental returns. Smarter AI models predict tenant churn, maintenance issues, building energy requirements, elevator usage in buildings as well as space utilization. This information gives a better idea of potential upcoming costs and issues.
Ms. Ainsworth’s financial planning now includes the returns from a beautiful house in Hamilton. ‘I had been interested in owning investment property for a while, but the barriers to entry felt insurmountable. Enter BuyProperly, the company that makes it possible for “the little guy” to get started. It was so easy to research the properties available on the website, create an account, and buy into the real estate market, and at an entry price point that feels safe. No need to bet the farm on a single investment!’ she said. Read more about the Hamilton Property here.
Traditionally, the real estate market has been dominated by brokers, and information about high-yield investments was made available to a select few. Latest AI-powered platforms bridge the gap by aggregating once isolated data, constantly updating information to arm investors with all the information they need. This approach allows websites to better match users to their properties and investment units that are more likely to convert into sales.
Ease of access
Investors can now access information on potential rental earnings, net cash flow, expected monthly mortgage payments and decide on whether the return makes sense given the details of the property. Websites like BuyProperly provide free tools which can indicate the potential cash flow/ positive negative from investments in a given property based on past sales, potential rental value, and interest rates. AI models work with the assumption that house prices are a function of both the features of the house and the suitability of the neighbourhood and hence focused on intrinsic value (rather than the market sentiment).
Innovative solutions to Pandemic
The impact of AI across industries has been increasing over the past few years, however, Covid-19’s disruption was a crucial flip to the digitization of real estate companies and their use of digital data analytics. With restrictions on travel and physical tours, technology simplified all phases of the process from origination, analysis & due diligence, financing & closing, post-closing rental/ongoing maintenance, and finally to exit through the sale with the investor safe in his own home.
PWC Canada’s 2021 report on the, ‘Emerging trends in Real Estates’ stated that as the business continues to emerge from pandemic restrictions, proptech will offer additional solutions for real estate needs. The report stated that ‘With digitization giving real estate companies access to more data than ever, they have a powerful new tool to help them make important business decisions…data analytics and predictive modeling can help with the determination of optimal asset allocation for mixed-use developments at a high level, as well as provide more detailed insights into the composition of unit mixes for a property.’
Buy Property, Properly
Every real estate investment needs to consider a multitude of dynamic factors, but through the power of AI, it is possible to identify emerging trends and uncover opportunities that others don’t see. ‘Thousands of data points and factors are considered over the long term before we consider a real estate valuation using AI. We then physically inspect each nook and corner of the property. Finally, less than 1 percent of the properties get qualified for our marketplace,’ said Khushboo Jha, founder of Buy Properly Canada-based real estate investment firm. BuyProperly’s proprietary AI tracks the markets, monitoring hundreds of economic and regional factors before predicting the profitability.
BuyProperly, Canada based fractional investment company uses AI as its most reliable tool for initial screening and then audits each property. ‘I am often asked how am I confident about the growth of investments, truth is that no human can assess over 150 variables and 200,000 data points for each proposal, but AI can. We merge the predictive power of AI and the experience of our on-site team so that before any product is added to the marketplace, we are certain of its future,’ Jha added.
BuyProperly’s online marketplace shows qualified properties with clear details of fees, charges, risk, and projected returns. Simply choose properties from the marketplace and start investing with as little as $2,500.