How ChatGPT Is Changing Real Estate Investing
Since OpenAI released its blockbuster bot in November 2022, it’s quickly garnered attention for its detailed responses and extensive knowledge of a myriad of industries and sectors. ChatGPT has started to infiltrate several businesses at a previously unseen pace, and it’s becoming a game-changer on many levels.
ChatGPT’s ability to analyze large sets of data to make predictions and string words together got me thinking about what uses AI would have in the world of real estate investing and how it could boost ROI.
I started listening to several podcasts about ChatGPT and the way many companies are using it to their advantage. Soon, I started to see where it would fit into the real estate sector.
ChatGPT, an advanced AI chatbot developed by OpenAI, has the potential to revolutionize various industries, including real estate investing, by automating time-consuming tasks and providing valuable insights.
Real estate investors can use ChatGPT for writing property descriptions, cover letters, emails, and other communications, as well as for estimating calculations.
Despite its sophistication, ChatGPT has some drawbacks, including the potential for labor cuts, a lack of personal touch, limited topics, skewed facts, and lack of creativity.
While AI can’t replace human creativity and decision-making, it can help real estate investors save time and resources by automating repetitive tasks.
The future of AI in real estate looks promising, with major investments from companies like Microsoft and potential integration with various platforms, which will ultimately transform the industry.
What is ChatGPT?
In essence, ChatGPT is a simple online artificial intelligence chatbot that you can ask questions and it will formulate a response.
This newly developed technology is unlike other chatbots we’ve seen in the past. Other chatbots have not used AI software in fruition, meaning they would usually use keywords to create simple answers that are not always in context or very helpful.
In contrast, the new AI chatbot taps into a vast amount of vocabulary and information. ChatGPT also has an understanding of how words work in different contexts and can mimic speech patterns while dispatching encyclopedic information. This makes it appear more “human-like” and sophisticated.
People from a variety of industries are now actively using ChatGPT to perform a variety of tasks and make their lives easier. But how will AI change the way real estate investors work? Especially high-income earners who want to take a more passive approach to this type of investing and need all the help they can get.
That brings us to our next point.
How To Use AI in Real Estate Investing
There are countless ways that you can use ChatGPT in real estate investing. At the end of the day, this is just another business that involves customer queries, interactions and transactions.
Here are just a few examples of how this type of AI can apply to the sector:
- Writing property descriptions
While this might not be a difficult task, it’s certainly time-consuming when you’re writing multiple property descriptions every week.
ChatGPT can be a huge help in creating property descriptions in a matter of seconds. You may need to tweak the descriptions per property and check their accuracy, but it certainly provides a starting point to work from.
This is especially useful for those that have single family home rentals including short-term rentals (AirBnb).
- Writing cover letters, emails, and other communications
These communications can be for contractors, lenders, potential buyers, tenants, or for various other reasons.
Administration and communication can be one of the most time-consuming processes for a real estate investor. But with ChatGPT, investors can input a prompt and the program will provide the rest of the text. This text can then get edited and tweaked.
- Estimating calculations
When considering purchasing a property, working out monthly mortgage repayments and how they align with a budget can take up a large chunk of time. Especially when multiple properties are viewed and under consideration.
ChatGPT might not be able to do complex calculations (yet), but it can definitely help with a rough estimate and aid decision-making when on the go.
These are just a few examples of how ChatGPT can help real estate investors.
You may be thinking wow, this sounds great, it seems too good to be true, but it’s not. Well not entirely anyway.
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The Drawbacks of AI in Real Estate Investing
While the new chatbot is sophisticated in its responses, OpenAI has explained on its website that “ChatGPT sometimes writes plausible-sounding but incorrect or nonsensical answers”.
So, what are some of the cons of ChatGPT?
- Potential for labor cuts
As listed above, AI can undertake many laborious, manual tasks. This could pose a threat to employees, especially those who handle day-to-day admin.
For example, AI can do research for you. This means that investors won’t necessarily need to work with a real estate agent or financial advisor. In time, this could render these occupations obsolete, or at the very least, reduce the need for employees who fill these roles.
- Missing a personal touch
While ChatGPT can help save investors’ time when writing listings or responses, it lacks a personalized approach when automating client responses, generating real estate leads, and closing transactions.
ChatGPT lacks empathy and takes more of a logical approach when writing prompts. So, it may not be the best platform to use when trying to communicate with clients and form a strong, long-lasting relationship.
- Limited topics
ChatGPT is trained on specific datasets, meaning that it can only offer knowledge on specific issues or subjects. This means that it limits the topics it can discuss
- Skewered facts
ChatGPT can only learn what it’s taught. This means that it could get fed incorrect data and relay it as fact. In the real estate investment world, this could erode trust, especially if incorrect information is given to potential leads.
- A lack of creativity
While AI may utilize enormous amounts of information, it can’t compete with human creativity. Although AI may be able to assist developers with creating a basic building design, real estate investors can’t rely on AI to completely cut out the costs related to this type of design.
With these drawbacks, AI can’t solve all the issues related to real estate investing. What it can do, however, is assist in basic ways and cut back on labor, resource, and time-intensive repetitive activities. All of which investors can use to their advantage.
The Future of AI and Real Estate
According to the New York Times, Microsoft recently announced a $10 billion investment in AI, including the development of ChatGPT with a generous investment in OpenAI. With the backing of such a big brand, the use of ChatGPT will surely grow even further.
According to the Times, integrating AI like ChatGPT into the Microsoft cloud could open the door to direct integration with a variety of sites, such as real estate listings and other platforms. This will make it a transformative technology in the real estate industry.
For real estate investors, this means some significant changes, especially in terms of speeding up the process and having information available within minutes. AI can also eliminate the most human aspect of any real estate transaction: stress.
Currently, real estate investors can greatly benefit from leveraging evolving AI technology like ChatGPT. And with AI at the forefront of technological developments, the future of real estate investing certainly looks attractive.Join the Passive Investors Circle
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