AI is one of the most significant trends of the moment. It’s also highly controversial. With many of the side effects being overlooked.
What are the good, bad, and ugly real estate investors should be keeping their eyes on as the market rotates?
The Good Side Of AI In Real Estate & Finance
There are a variety of potential upsides from AI technology for real estate and finance professionals and businesses.
On the personal and business front, this most notably includes the potential for enhanced productivity. If you can use it to move faster, and shave some costs, that’s great.
Of course, we must remember that this is really about machine learning, and more about the artificial side of what computing can do. It’s not intelligent genius that always gets things right.
So, you may also find it gives you poor or misleading answers, or it ends up in denying you for financing that your venture would otherwise qualify for.
The Bad: AI, Fundraising & The New Tech Bubble
One of the great upsides of AI, has been for startups and businesses that put the label on their companies, and use the trend to raise large sums of capital.
Billions of dollars of venture capital money are being thrown at AI companies. It can be a great lift if you can apply that tactic, and then deploy the money well.
Of course, this is also causing a lot of concern about the sustainability of these businesses and the potential for a bursting of a new tech bubble, in which billions of dollars in paper value will be evaporated.
This may also result in quite a bit of distressed real estate. Both commercial and in the residential pockets around these firms that relied on them.
The Ugly: Mass Unemployment & Loss Of Goodwill
Even the biggest and most aggressive advocates of AI technology also note that if it is as successful and widespread as they hope, it will create mass unemployment.
We are already seeing just the tip of the iceberg of this. It will be compounded by the wider implementation of technology too. Consider how AI chat bots are replacing customer service, and stores are being automated with self-checkout counters.
This again brings us back to distressed real estate buying opportunities, and the increased need for affordable rental housing.
Then, while there is great potential for AI to be incredibly helpful as it improves in the future, it just isn’t ready for more applications. Not for many lending decisions, property management and tenant approvals, or automating customer service. Those that have been implementing it now, and totally doing away with human customer service are alienating many of their best customers and leads.
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