Will Your Real Estate Business Survive AI?
Is your real estate business ready to survive and thrive in the new era of technology, and artificial intelligence?
We are already seeing the impact new technology is having in the economy, and in the real estate industry. So far it has been slow and in gradually steps, but soon we will see it speeding up and taking bigger leaps. Real estate professionals, business owners, and investors must recognize this, and prepare accordingly.
So, what is happening now? How will it affect the market? What moves should those in the real estate industry be making, and how can they prevent sabotaging themselves with rash moves?
Know Your Stuff
If you want to win and keep winning in real estate you’ve got to know your stuff. That no longer just means the mechanics of the real estate transaction, the latest loan programs and market trends, but also how technology is evolving and may impact everything you do too.
Reading daily, listening to podcasts, being engaged in an eLearning program, and attending professional real estate networking groups is all a part of this.
The End of Traditional Retail
Traditional retail is changing dramatically. You have already seen it at local eateries, and stores. You may have had family affected by it. As more and more consumers turn to online shopping, brick and mortar retailers are being hit hard. At least 20 major retailers are closing stores, laying off employees, or are filing bankruptcy this year. That includes; Macy’s, JC Penney, Abercrombie & Fitch, and even Whole Foods.
There are some exceptions, like Amazon who is boosting hiring of remote workers, and who is building out physical stores. Yet, overall expect there to be fewer of these big brand stores, and as much as 80% fewer jobs in the next few years. This won’t just impact minimum wage customer service and line workers either. Artificial intelligence (AI) is speeding up and replacing a wider number of tasks and jobs that may have humans today. This is increasingly impacting tech workers and real estate workers as much as retail. Many will have to reinvent themselves and re-tool their skills if they are going to keep income coming in.
Businesses are Changing
The businesses that are surviving are becoming more efficient, leaner, and more profitable as well. They are integrating AI and new tech where they can. They are keeping operations more flexible and with less overhead, and the end result is better profitability. This is creating an ever more competitive business environment. You can’t just benchmark or count on the profit margins of last year, or even this year. You have to keep streamlining if you want to stay competitive and avoid giving away significant market share.
The Impact
The impact of AI and other technologies are changing business dynamics and the job market. They are also changing the real estate market. They are changing who the best tenants and buyers are going to be, where people want and need to live, which properties will perform the best, how people are conducting real estate transactions, and which companies and professionals they will work with. Pay close attention to this, and apply your human, common sense to predict where the puck is going, rather than skating to where the data suggests the action was last quarter.
Smart Moves to Make
- Create a lean business model
- Adopt efficient systems
- Build up your online presence
- Meet people where they are online
- Test new tech driven marketing channels and tools
- Think about how you can give people more of what they want than your competitors have been
Do all of this, but be careful not to sabotage your own real estate career or business or your industry. Do not race to the bottom on price and put yourself out of business, nor replicate poor models which you don’t really know are profitable or not.
Summary
The internet of things is weaving its way into every moment of our lives. It’s changing the DNA of the economy and real estate. Blend AI tools and human understanding to stay ahead of the curve, and build sustainability into your real estate business. Know your value, know your market, know new technology, and shoot to be a leader in your niche.
