How the Rise of Artificial Intelligence Will Disrupt Your Rental Portfolio

by | BiggerPockets.com

Our entire world is being disrupted by technology. How will it affect rental property investing?

Lately, I’ve been on a craze of studying artificial intelligence and how robots are replacing humans in the workplace. We’re going through one of the biggest technological and economic shifts in history. It could change our lives, finances, and investments more than most think.

Vaporizing Jobs

With new innovations coming to fruition, many blue collar jobs are going to quickly get outsourced to robots. If you’ve been following, Amazon Go is leading the pack with self-checkouts, where there are literally no cashiers. It may become completely unnecessary to have cashiers and even wait staff at many food joints and restaurants. You can order your food on your phone and pay on your phone. Retail stores are headed the same way, with virtual reality mirrors, windows, and dressing rooms that allow you to virtually try on clothes.

Related: 5 Real Estate Jobs That Have Been Made Obsolete by Tech (& 4 That Haven’t)

That are a lot of jobs that can be taken out. Then look at Uber, who has moved beyond car services to purchasing a trucking company where there are no drivers. Some projections put the percentage at as high as 80 percent that some levels of jobs will be replaced by technology in the next few years. Even tech workers won’t get a break. Mark Cuban recently highlighted that the current focus of tech is to design AI, which can write new software programs. Eventually, artificial intelligence will be able to identify jobs that can be replaced by computers and then create the software or the tools needed to make it happen. So even high-earning developers, engineers, and designers could soon be out of work.

On the bright side, I’d like to think that this is going to positively affect investors and some workers. People will be forced to move up to better jobs. This will force people to be more entrepreneurial and do more for humankind.

finance-apps

Tech in Real Estate

Technology is helping investors. It is making more profitable investments accessible online. Investors are becoming more knowledgeable and equipped for better due diligence. I can literally (virtually) drive a property from a seat in my office using Google Maps. These streamlined processes are also creating better margins and more efficiency, which can be shared between asset managers and end investors.

Related: 4 Ways Technology is Shaking Up Commercial Real Estate (& Why Multifamily Will Pull Ahead)

The one sticking point with all the new data and tech options is that at this point, we still need real humans who can intelligently decipher it, provide common sense, and deliver personal service when it is desired.

To win in this environment, we need creative and analytical thinkers on our teams to evaluate deals with the future in mind—and perhaps to be conservative as we watch the tech revolution unfold.

Do you predict that an extreme amount of jobs will be overtaken by computers in coming years—or do you think the predictions are overblown?

Let me know your thoughts with a comment!

About Author

Sterling White

Sterling White started in the real estate industry at a early age back in 2009. The company he co-founded Holdfolio is a real estate crowdfunding platform based in the Indianapolis market. Before founding Holdfolio Sterling and partner Jacob Blackett were involved in the purchasing and selling of 100+ single family homes nationwide. In his free-time he trains for a World Record.

10 Comments

  1. Joshua Locke

    I don’t think there will be a ton of jobs lost to computers. Younger people trust computers more than the older generation, but whenever a large purchase is involved people young and old want to see it and touch it. I have bought a couple houses unseen since I am overseas in the military right now, but I only did it out of necessity and only with a brand new houses from the developer. Even never seeing the two houses that I bought there were still realtors and closing attorneys involved the whole time. I don’t see how computers are going to take over the closing process. I would buy sight unseen again given my circumstances, but it was hard and they were somewhat extreme circumstances. Given the chance I would not only want to see the house before I buy but be there at closing… the piece of mind and less complications with paperwork would be worth it to me. I think investors will be the only ones that will embrace technology, but I think anyone buying their primary residence (especially for the first time) will only feel comfortable with a person walking them through the process. I do see how technology is helping people advertise houses, but I learned firsthand that a local realtor is worth their weight in gold for their knowledge about the inventory in their area.

    So bottom line, I think technology will continue to help investors find potential deals, but I think the human factor for buying a large purchase will never be completely replaced and will most likely remain largely unaffected by technology advances especially on the non-investor side of the market.

  2. Stephen S.

    I have been asking this question for some years now: Where Is Everyone Going To Work? Nothing is more fundamental to civilized human existence than the self-satisfaction of working for a living in some form.

    Entry level jobs are being displaced on virtually every front. Off-shoring is a smoke-screen – that’s not what has reduced employment opportunities – it is automation. Manufacturing is done with robots, warehouses have automated trains and loading systems, farm tractors and harvesting equipment is guided by GPS and automated machines. And this “self driving cars” thing is going to further devastate the employment world, most especially for young people and others with low skill levels and abilities. Taxi cab drivers? Nope. Bus drivers? Nope. Truck drivers of all kinds? Nope. Even mail and package delivery is on a slippery slope to fully automated.

    One person now does what previously required hundreds of people – and it’s going to get worse. As you say; soon enough machines will be designing and developing more machines.

    The platitudes that I get most often as a retort is: People will have to become better educated – they will have higher skilled and better paid jobs.

    OK; how and when is that going to happen? And who is going to pay for it? And what about people who’s innate natural abilities preclude that? Not everyone has the ability to become an engineer. And even the rare few who obtain greater skills will all be competing for an ever decreasing number of jobs.

    And before I get off my soapbox let me comment on the recent National Minimum Wage silliness: The far better answer is this:

    All workers can be paid any wage that they will accept. But no product or service that was not produced, advertised, distributed, or sold, by anyone making less than (let’s say:) $15.00 per hour can be sold anywhere in the United States. You can produce anything you want, anywhere in the world that you want. And you can sell it anywhere that you want. But unless all the labor involved was all paid $15.00 or more per hour – no US sales permitted.

    Let’s pass That law and see how fast factories are built and American workers employed.

    stephen
    —————

  3. Dumitru Anton

    Sterling, who is going to repair the robots?
    Do you really believe most of mom and pop businesses hace the money to invest in new technology?
    Paper was supposed to dissapear many years ago. Yet we print more then ever…
    What do you do if your. Google maps are uptodate, but the pictures are 3-6 years old?
    Embrace technology and get the most of it as an younger generation but don’t really put your hope into general adoption
    Where is my cheap and dependable Jetsons flying car?

    • Sterling White

      1. People or machines will repair the robots.
      2. At the beginning most mom & pop organizations will not be able to afford the new technology. Once it hits scale then the costs will be pushed down allowing for the average consumer to purchase..
      3. Give it twenty years and your Jetsons flying car will be here!

      Thank you for your comments.

  4. Greg Martin

    Technology changes are only going to get faster and larger. Think of life 10 years ago or so when the first iPhone came out. Before that we didn’t know what it was. Now, we can’t set our phones down, China is testing Crispr technology on humans. Things are going to change, and society needs to be forward thinking to decide what we want it to look like. Tech won’t replace all jobs by any means, but it can replace a large number of them. Check out some of the articles and podcasts Zoltan Istvan has been doing. The future is not that far away…

  5. Joshua Howaniec

    I think people are worrying to much about automation replacing all of the jobs. It’s not as though there is a limited amount.
    Sure we can count the number of vacancies but we cannot count the jobs that have yet TO BE CREATED. Many jobs didn’t exist when my grandpa was a kid, same is true for my dad, same is true for me! Automation has built more jobs, not lessened them. Where we work may be displaced but where we find new “gaps” in our automated processes or lives have yet to be discovered.
    In the end human ingenuity and creativity will rule the day.
    Great article Mr White

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