7 Ways to Use AI in Real Estate Investment Analysis

Published by
Marc Rutzen
November 15, 2023
7 Ways to Use AI in Real Estate Investment Analysis

Why Use AI for Real Estate Analysis?

With recent advancements in artificial intelligence, there are many ways multifamily real estate investors can leverage AI to enhance decision-making, improve operational efficiency, and maximize returns. But at the same time, it is a LOT to process – it can be difficult to know where to start.

We put together this post to show several ways AI can be applied in multifamily real estate. We include 7 unique areas where it can be used, a couple examples of each, and a few tools in each category that investors can check out to get started.

Market Analysis & Prediction

Understanding markets is critical for successful real estate investment. By leveraging AI for trend analysis and price prediction, investors can make more informed decisions about where and when to invest. Some elements of market analysis and prediction include:

  • Trend Analysis – AI can analyze vast amounts of data to identify emerging market trends, helping investors pinpoint where and when to invest.
  • Price Prediction – Machine learning models can predict rents and property values based on historical rent trends and current market conditions.

Here are some market analysis and price prediction products to check out:

  • Realtor.com – This website not only lists properties for sale but also provides market trend data. They offer insights into local market conditions, price trends, and other key data points relevant for real estate analysis.
  • Zillow Research – Zillow provides a wealth of data and tools for understanding real estate trends. Their research section offers market reports, data on home values, and insights into housing market trends.
  • HelloData.ai – Zillow and Realtor.com are great for single-family, but multifamily price prediction is definitely our focus. Check out our LiquidRent.ai product page to see how we approach multifamily pricing and revenue management.

Acquisitions & Due Diligence

Buying the right property is the most important part of real estate investment, and AI can streamline the acquisition process by providing advanced tools for deal sourcing and due diligence. Some ways AI can be used include:

  • Deal Sourcing – AI tools can scan multiple listing services (MLS) and other databases to identify potential investment opportunities based on specific criteria.
  • Due Diligence Automation – AI can assist in analyzing property conditions, neighborhood demographics, and other relevant data to ensure a sound investment.

We think these products are worth checking out:

  • Commercial Real Estate Exchange, Inc. (CREXi) – CREXi is a commercial real estate marketplace that includes multifamily properties. It offers tools for auctions, leasing, and sales, making it a versatile platform for investors.
  • Fundrise and RealtyMogul – Real Estate Crowdfunding Platforms like these allow investors to pool resources and invest in larger projects, including multifamily properties, which might otherwise be out of reach for individual investors.

Tenant Experience & Retention

Enhancing tenant satisfaction and retention is essential in multifamily real estate, and AI can help by facilitate proactive maintenance (improving resident satisfaction) and improving tenant communication. Two areas where AI comes into play:

  • Predictive Maintenance – AI can predict when appliances or building systems are likely to fail, allowing for proactive maintenance.
  • Tenant Communication – Chatbots and virtual assistants can handle common tenant queries, improving response times and satisfaction.

Some products to consider:

  • HappyCo – HappyCo specializes in real-time property operations, offering tools for inspecting, managing, and maintaining rental properties, thus ensuring tenant satisfaction through well-maintained premises.
  • Amenify – This platform focuses on enhancing tenant experience by offering in-building services such as pet care, house cleaning, and fitness classes, directly contributing to tenant satisfaction and retention.

Lease Management & Optimization

Effective lease management is key to maximizing returns in multifamily real estate. AI can help optimize rental prices in real-time and forecast tenant behaviors, thereby improving lease management processes. Some areas AI can be used include:

  • Dynamic Pricing – AI can adjust rental prices in real-time based on demand, similar to how hotel and airline pricing works.
  • Lease Renewal Predictions – Predictive analytics can forecast which tenants are likely to renew their leases, helping property managers focus their retention efforts.

These products are worth taking a look:

  • AppFolio Property Manager – This software provides a comprehensive suite of tools for lease management, including online lease agreements, electronic signatures, and automated rent increases. It also offers tenant screening, accounting, and reporting features.
  • LeaseHawk – Tailored for the multifamily industry, LeaseHawk focuses on optimizing the leasing process through lead tracking, conversion metrics, and AI-driven communication tools.
  • HelloData.ai – We’ll throw our hat in the ring here too. Although we don’t help with lease management, we leverage real-time market data from millions of rental listings every day to recommend daily pricing and maximize revenue.

Risk Management

Mitigating risks is a critical aspect of multifamily investment. AI can offer nuanced tenant assessments and detect security anomalies, helping safeguard investments against various risks. Two applications include:

  • Credit Scoring – AI can provide more nuanced tenant credit assessments, considering a broader range of factors than traditional methods.
  • Security – AI-driven security systems can detect unusual activity, enhancing property safety.

Products to check out:

  • LeaseLock – LeaseLock offers a lease insurance product that replaces traditional security deposits, reducing financial risks associated with tenant damages and defaults.
  • RentButter – A tenant screening solution that can help reduce rent defaults & evictions by up to 20%. It combines bank transaction history & credit behavior analytics into a simple, predictive tenant performance report.

Marketing & Lead Generation

In the competitive multifamily market, effective marketing and lead generation are more important than ever. AI-driven marketing strategies can attract the right tenants and how virtual reality enhances property showcasing, offering a modern approach to attracting prospective tenants. Two areas where AI can be used include:

  • Targeted Advertising – AI can analyze potential tenant data to create targeted marketing campaigns.
  • Virtual Tours – AI-powered virtual reality or augmented reality tours can provide prospective tenants with immersive property experiences.

Some platforms to consider:

  • HubSpot – While not specific to real estate, HubSpot's CRM and marketing tools can be effectively used for lead generation and nurturing, email marketing campaigns, and inbound marketing strategies in the multifamily sector.
  • Zillow Rental Manager – This tool allows property managers to list properties on multiple platforms including Zillow, Trulia, and HotPads, reaching a wide audience of potential tenants.

Financial Analysis/Underwriting

Sound financial analysis is important for any successful multifamily investment strategies, particularly in today’s economy. AI can empower investors with sophisticated financial analysis capabilities, helping them making more informed investment decisions. Here are two ways AI can help:

  • Cash Flow Projections – Forecasting cash flows based on rental income, expenses, and market conditions.
  • Investment Analysis – AI can help simulate various investment scenarios, helping investors make informed decisions.

Here are some tools that can help:

  • Tactica Real Estate Solutions – Offers a suite of tools for real estate professionals, including detailed Excel models for a range of sophistication levels. Their models include solutions for analyzing development, value-add and stabilized multifamily deals. Tactica is also a partner of
  • HelloData.ai – Acquisitions teams and operators leverage our platform to identify their true rent and expense comps, analyze unit-level rents in detail, and optimize rent pricing and identify areas for operational improvement. With our database of over 2M multifamily properties and 25k expense comps with real financials, investors can underwrite deals in seconds with only an address.

Clearly there are many ways to incorporate AI in real estate investment analysis. To leverage AI effectively, multifamily real estate investors should consider partnering with technology providers, hiring data scientists, or collaborating with AI-focused startups in the real estate space.

Property managers, investors, brokers and appraisers all use HelloData to analyze multifamily comps, optimize rents, and increase deal flow.

Marc Rutzen

Marc worked in real estate for 5 years before launching multifamily analytics startup Enodo, which he sold to Walker & Dunlop (NYSE: WD) in 2019. At W&D, he served as Chief Product Officer, developing products that helped source billions in loan volume. Outside of work, he enjoys reading, running, and spending time with family.

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