Robotics and AI
Dec 12, 2021
Role of Robotics and Artificial Intelligence (AI) in Real Estate
I recently finished a remodel of one of my rentals that ended up being a bit more stressful than I anticipated. Everything was more expensive than I had originally budgeted due to higher material costs and labor shortages. I had a particularly bad experience with a painting company who didn't show up to work for weeks and I ended up having to do a bit of threatening and begging to get them back on track. In the end, they finished up and did an okay job - not great but good enough for a rental. Of course, not everyone is bad and I've met contractors that I like to work with and have developed good relationships with as well but those are the contractors who tend to be on the expensive side. In general, I felt frustrated at how little leverage I had on them. I realized that many contractors simply don't care about being able to complete work on time and on budget because they have enough work for the next year so customer service/retention is not their top priority.
I started thinking about the solution to all this is...and I strongly believe the long term solution is Robotics and AI. I believe that with improvements in technology, a lot of work in the construction industry can be automated. Robots have the potential to do a better and more efficient job. I look forward to the day when I can hire painting robots that can do a near perfect paint job :)
I did some research into this and found a few promising developments/companies that I find interesting to share:
So first things first, I had to find out if there is such a thing as a painting robot, lol! There is and it's actually pretty cool! It's not perfect and it'd be cost prohibitive for me to actually purchase one of these today but I imagine things will be different in 20 years! Here's a video of a painting robot developed by Okibo in action!
This is actually a lot more interesting than a painting robot and has the potential to solve some of the biggest challenges facing real estate today including affordable housing. I have to admit that when I first heard about 3D printed houses, I dismissed the idea and thought that it would be similar to manufactured homes. However, upon further research, there is actually a lot of cool things you can do with a 3D printing and some of the homes that have been built are simply incredible! They also may be superior in quality compared to traditionally built homes as technology improves. As costs decrease, this can be a real solution to affordable housing in the US and around the world.
There are several companies that specialize in 3D printing in the US and Europe. The one that I find the most interesting is a company called ICON. They've created a tiny home community for the homeless and have several interesting projects going on.
3D printed tiny home community: https://www.greenmatters.com/p/3d-printed-tiny-home-homeless
Partnership with Lennar to build a 100-home community of 3D printed houses in Austin TX.
I'm really excited to see the end results of this one! It sounds like the homes will be priced similar to traditional new construction homes
Maybe Elon Musk's goal of humans becoming an interplanetary species will be realty in our lifetime.
After I was done with the remodeling, I wanted some sort of robotic device that can go around the house and detect small defects that can be early overlooked by the human eye. If such a device existed, I can use it to ask contractors to redo anything that they missed. I admit that I can be a perfectionist at times so this probably something that is costly to develop and there won't be a huge demand for it. Nevertheless, I did some digging anyway and the closest thing I found was a robotic device that inspects attics and crawlspace that's basically a video/image capturing tool but seemed pretty useful. It saves inspectors the trouble of actually squeezing into tight crawlspace areas.
Home Value: Zestimate, Redfin estimate etc.
Websites such as Zillow and Redfin have their proprietary algorithm to estimate the value of a home. Even though their estimates can be completely off at times, I do appreciate the information and I find that their estimates do tend to be fairly accurate when they have enough sales data to analyze and especially for average homes in cookie cutter neighborhoods. In non-disclosure states where the final sales price is unknown, the data tends to be less accurate. I also enjoy looking at the different models that Zillow has such as estimates based on recent sales and tax assessed value.
FoxyAI: Remodel costs
Estimate remodeling costs by uploading pictures. I spoke with the owner and tried out their product which is super easy to use. It's a neat concept and I can see a lot of potential with it. Currently, the estimates are not super accurate so it doesn't replace the need to call a contractor for a bid but maybe they can eventually get there with better data and image analysis.