Artificial intelligence has been around for decades, but it seemed a lot more innocuous when it was just playing checkers. ChatGPT, an AI language processing tool developed by OpenAI, can pass the bar exam. We’ve all seen and read enough science fiction material to feel a twinge of fear that robots may be coming for our jobs. But what’s more likely to happen over the coming decade is that AI will enhance our capabilities, making our work processes more efficient and giving us back that precious free time that is often the motivation for real estate professionals to build passive income streams.
Of course, there are valid reasons to be concerned about ethics, safety, and human independence and agency as a result of this new technology. But so far, ChatGPT is proving to be an invaluable resource for real estate professionals in multiple aspects of their business. Understand its limitations and how to use it effectively, and you could build more wealth in less time or kick back and relax a little longer than you would otherwise.
How Does Chat GPT Work?
ChatGPT uses deep learning to deliver real-time responses to questions and prompts in human-like language. It’s pre-programmed with an inconceivable amount of data and has multiple language functions. It’s one of the biggest language models that exist.
When you type a request or question to ChatGPT, the individual words are analyzed and fed to the transformer part of the neural network, which is designed to process information much like the human brain, before ChatGPT generates a response. The tool is capable of a wide variety of language tasks, including:
- Generating text
- Completing text
- Translating text
- Summarizing content
- Answering questions
When using ChatGPT, it’s crucial to be specific with your prompt or question. Tell it the length of the response you want and the tone you’re looking for if that’s important. If you don’t get the response you’re looking for, you can ask ChatGPT to change it based on specific parameters. You’ll also want to edit and fact-check the result since ChatGPT is not 100% accurate.
Limitations of ChatGPT
ChatGPT tries to be accurate, but the results aren’t perfect. You’ll always need to review the content it delivers for accuracy. It’s not a good idea to use ChatGPT to draft legal documents for this reason, unless you have a lawyer who can confirm the document is comprehensive and accurate. Furthermore, ChatGPT is not emotionally expressive and may use phrasing that reveals it’s not human. It also tends to be pedantic and wordy. So if you don’t want to alienate your readers, you’ll need to edit it to make it more personable.
But probably the biggest limitation for real estate professionals is that ChatGPT is trained on data that existed in 2021. It can’t discuss current events with you, but more importantly, it can’t pull market data from 2023. The real estate market fluctuates, as we’ve seen over the last several years—markets that were booming during the pandemic are now seeing price declines. Still, if you take ChatGPT’s responses with that knowledge in hand, the tool can give you a starting point for your research.
7 Ways Real Estate Investors Can Use ChatGPT
1. Perform a market analysis
Real estate investors often spend time collecting market information from different data sources, whether that’s rental price data from Zillow or Redfin, unemployment information from the Bureau of Labor Statistics, income and housing data from the Census Bureau, or property tax information from local government websites. They compile and compare this data to make informed decisions about different housing markets.
Given that ChatGPT is only trained on data from 2021 and earlier, using the tool will deliver less accurate and timely results than analyzing current data yourself. But you might use it as a starting point to compare markets. For example, if you give ChatGPT two cities and ask which one has a lower rent-to-price ratio, it will answer based on Zillow data from September 2021. If you ask which cities have the lowest property tax rates, it will also generate a list from then.
But when you push ChatGPT further and ask the best city to invest in real estate, it won’t answer the question. It will deliver a list of factors to consider, which could be helpful information for some investors, but it leaves the real work of selecting an investment market for the humans of the world.
2. Communicate with tenants
While ChatGPT is sometimes suspiciously robot-like in its phrasing, with a little editing, it’s a step above a form letter when you need to communicate with tenants or short-term guests staying in your property. If writing friendly and professional emails isn’t your strong suit, ChatGPT can take some of the pressure off.
For example, vacation property owners can use ChatGPT to write welcome letters and draft checkout instructions. You can even use it to create guides for visitors. For example, if you tell it to “write a guide for restaurants and attractions that are popular with locals in Portland,” it will deliver compelling results rather than just spitting out the top 10 restaurants on TripAdvisor. Add in a few personal touches, and you’re good to go.
Landlords can use ChatGPT to write communications with tenants, such as a new landlord introduction, sale of property notice, notice to vacate, notice of rent increase, late rent reminder, excessive utility usage notice, and more. You can even ask ChatGPT to draft a lease agreement, but you’ll want to check it for gaps and consider having an attorney look over it.
3. Generate marketing ideas and content
ChatGPT can help with everything from generating a name for your business to writing social media posts and blog content—but again, it won’t do all the work for you. For example, if you ask it to write five social media posts for a property management company in a particular city, it will deliver five generic versions of the same thing. But if you ask it for ideas for social media posts for a property management company, it comes up with ten solid suggestions to inspire you.
ChatGPT can also play a role in search engine optimization by creating and optimizing content for your website. For example, you can tell it to “write a 500-word blog post about declining occupancy rates for short-term rental properties.” You’ll need to fact-check the results and edit the copy to have an angle that serves your business, but that’s certainly faster than writing a blog post from scratch. You can also ask it to optimize the content you’ve already written for your site or rewrite something with a different tone or emphasis.
4. Prioritize property management tasks
If you manage multiple properties, you may have had the overwhelming experience of juggling several urgent maintenance problems. Your executive functioning skills weaken in response to acute stress, so you may find it difficult to prioritize under pressure—ChatGPT doesn’t have that problem. You can feed it a list of tasks you need to complete and ask it to prioritize them for you. It will explain its reasoning behind the choices.
5. Get resource recommendations
If you Google “best real estate CRM” or “best real estate market analysis software,” you’ll get a multitude of top 10 lists, with no consistently-ranking winner. The best resource for you often depends on your business needs, and comparing products through that lens takes time. But you can give ChatGPT a list of features you need and ask it to recommend the best, least expensive, or most popular products.
You might even find resources you didn’t know existed by asking ChatGPT about an unfulfilled need you have. Not to toot our own horn, but if you ask ChatGPT, “Is there an online community where I can attend real estate investment workshops?” it will recommend—you guessed it—BiggerPockets.
6. Learn about housing regulations
You can also use ChatGPT to research local laws instead of trying to sift through the information on local government websites. For example, cities across the country are cracking down on short-term rentals, so before you invest in a vacation property, you’ll need to read the short-term rental ordinance for the city or county. It’s also wise to look at how municipalities in the surrounding area are dealing with short-term rentals since there can be a domino effect. But these ordinances are often lengthy and packed with legal jargon—ChatGPT can summarize housing laws in different locations so you can easily digest the information.
7. Write property listings and answer client questions
ChatGPT is saving real estate agents so much time. Some are already saying they couldn’t go back to work without it. Give it a few details about the home, and ChatGPT will generate a compelling listing in less than a minute. Real estate agents also use ChatGPT to answer client questions on-the-fly. It may be quicker than finding the right mortgage payment calculator or researching school districts for an address, for example.
Improving efficiency often requires embracing new technology. A spokesperson for Zillow told CNN that the real estate industry hasn’t always been quick to innovate, but ChatGPT may be changing that. While not a perfect tool, it’s likely to change the way real estate professionals work over time. And since it’s currently free, it’s worth playing around with some of the tasks we mentioned—you might be surprised how much time you can get back.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.