AI a growing tool for those interested in buying, selling, investing in real estate – The Salem News

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LANCASTER, PA. — What would that house be like with a sunroom in the back? What would that bathroom look like with a black-and-white tile floor? How much should insurance cost on a three-bedroom home in Mount Joy Borough? What is the best real estate investment right now in Lancaster County?

For real estate professionals, investors and homebuyers, those are just some of the questions that artificial intelligence tools can answer — or could possibly answer in the future — about buying, selling and owning properties.

“Right now there’s so many tools that are coming out for real estate every day that you can leverage for so many different tasks in real estate. It’s helping us move forward in leaps and bounds,” says Chandra Mast, owner of Ephrata Borough-based Red Rose Appraisals, who has taught courses on AI for the Lancaster County Association of Realtors.

Real estate is particularly ripe for the application of AI tools, Mast says, since artificial intelligence tools do a good job of creating visualizations while also effectively synthesizing and identifying patterns in data to predict potential investment returns or provide accurate home prices.

“Data and the visualization are big parts of real estate, and they are also in AI,” Mast says.

Mast makes extensive use of AI tools for her own business, including to summarize sales data in different markets, glean relevant zoning regulations for a specific property, and create social media posts that include AI-generated images inspired by local architecture.

For real estate agents looking to bolster their social media presence as they create a trusted brand, the tools can be valuable time-savers, Mast says.

Among the tools Mast recommends for real estate agents are ChatGPT and Perplexity for research, MidJourney and DALL-E for images and Listingai and Epique for marketing.

“There’s a lot of one-trick ponies. Right now, it’s about stacking all these one-trick ponies up to get what your needs are,” she says. “I have a series of eight or nine one-trick ponies as a general appraiser to get the job done.”

One customer-facing tool is the “redesign” function incorporated into Redfin’s sale listings that allows shoppers to virtually change the flooring type, wall color and other elements in pictures of listings.

While AI tools can give buyers and sellers a lot of their own information, Mast says local agents still play an important role if they understand how to put everything in its proper context.

“You can get a certain level of information, but it is going to take a local understanding to put together the local nuances of what that means to our community,” Mast says. “And hopefully that is what the local agent is going to bring to the table.”

An approach to investing

For real estate investors, AI offers the possibility of getting a deeper understanding of local markets since it can synthesize reams of data about sales, average rents, incomes and insurance rates, among other things. Some tools could also help with property management, including by automating communication with tenants.

Lancaster-based real estate investor Chad Gallagher says new AI tools are the latest application of using technology to make better decisions in real estate. Along with business partner Nate Jones, Gallagher owns some 200 properties, including single-family homes, commercial units and apartment buildings.

“Everything we do in real estate is to figure out where we can utilize math or tech to do things differently, either to provide service for investors or help us to invest smarter for ourselves,” Gallagher says.

In 2013, Gallagher and Jones began SlateHouse Group, a property management company that was sold in 2022 to Home365, an Israeli-based technology-focused real estate company. Now, Gallagher and Jones work on their own investment projects while operating Real Estate Hackers, which offers free programs and networking to real estate investors.

While Gallagher says the mania for AI has led to many simple technology solutions being labeled as “AI,” there are nevertheless some tools that could revolutionize the industry.

One AI function Gallagher is testing for rental units is a chat function that can both respond to tenant questions as well as engage them in a conversation about their needs or concerns. An AI-powered chatbot could be effective, Gallagher says, since tenants typically ask only a couple of variations of questions about repairs, rent payments or moving in and out, all of which have prescribed answers.

“There’s 30 questions that get asked over and over again,” he says.

Using AI as a chatbot is a step up from many systems that currently accept inquiries but then only give a canned response that must be followed up on by a person.

“Now, where we see things going is AI being smart enough to understand what was said back and actually be able to respond with something intelligent, and how we want it to speak back to a tenant,” he says.

Investing wisely

AI tools also do a good job of suggesting rental rates for specific apartments as well as determining property values since they can analyze such publicly available data.

“A good valuation for a property is a perfect tool for AI. It is just ingesting data and spitting out what it thinks is the best estimate,” Gallagher said.

From getting a proper valuation, AI tools could then create a profit and loss projection for a property, although Gallagher says an investor could potentially take it one step further.

“Now, you can imagine the next step is being able to look at all properties across everything available in Lancaster County and ask, ‘Given your analysis, what is the best investment to make based on a high internal rate of return, given the listing price on every property?’!p” Gallagher said.

Of course, a bidding war could result if everyone discovered this theoretical best investment, thereby driving up the price and making it no longer the best investment. But Gallagher says most investors aren’t taking advantage of all the tools for understanding the markets, providing opportunities for anyone who is.

“What you’re going to see over the next couple years is that the folks who are using AI the fastest and adopting AI the fastest, they are going to win in most industries, and for sure in real estate,” he said.

As more real estate investors use AI tools to make investment decisions and manage their properties, it can lead to fewer costly mistakes, creating more certainty about what a real estate investment is actually worth. and when investors have more confidence in any asset’s value, it typically goes up.

“The emotional toll is what hurts a lot of investors. Part of (using AI tools) is trying to take the emotion out of it and look at the whole picture and understand what is going on,” he said. “The (real estate) game is full of mistakes and that is what really speaks to AI. You can today make all these mistakes and still make a lot of money.”

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