Creating smarter homes in multifamily communities is building trust, safety and connection for residents. Amid continued economic uncertainty, including regulatory changes, tariffs, rising utility costs and increases in building materials, property managers and renters alike are both making more concerted efforts to cut back and save. Overall, tenant turnover is down, so how can properties partner with their renters to provide additional value? The short answer: multifamily properties are choosing investments in PropTech to save money and enhance operations.
Parks Associates hosted a virtual Smart Spaces session and shared new research around three key themes where properties are investing based on the best returns for resident satisfaction, operational efficiencies and new revenue opportunities. PropTech enhancements in these areas today can create almost immediate returns.
- Physical Security:
Renters need to feel safe in their homes and communities. Parks Associates research showed that NPS scores increased as more security features were added across the property. The top desired security measures for renters looking for a new home includes: outdoor lighting, security cameras, controlled access to building and amenity areas, smart door locks for units, and security systems/personnel. While adding headcount may not be an option, leveraging PropTech to save money is now proven to support resident satisfaction for renewals but also encouraging new renters to sign leases. - Smart Utility Management:
The average electricity costs across the country have increased 10% and are predicted to continue growing. Apartments and condos are adopting smart thermostats and other energy and utility management solutions to units and across the community. Properties can save roughly 30% annually by adopting smarter energy strategies. MDU owners and operators also report a reduction in energy and water costs by nearly 20% when installing smart solutions (Parks Associates).Heating and cooling is a huge cost burden for residents, and adding PropTech to save money will offer residents more control over their utility spending. Additionally, when units are vacant or renters are traveling during winter months, smart thermostats help with disaster prevention to eliminate freezing temperatures and pipes bursting, which can cause thousands of dollars of damage. - Managed Wi-Fi:
Choosing bulk Wi-Fi for the community rather than each unit sourcing their own service is another great way for properties to partner with their renters to save. According to research from RETTC, with managed Wi-Fi, renters can save up to 50% on their Wi-Fi services.Managed Wi-Fi also gives the property more control and visibility over the smart devices added to the property. If the Wi-Fi is spotty or insecure, it opens the community to extra risks. By having a reliable and secure community-wide service, smart tech can be added on top to effectively install, manage and support these technologies.
Building New Revenue Streams with Tech Amity Fees:
More fees? No way! But wait… While everyone is cost-conscious right now, it’s important for property owners to know that tech amenity fees have been well-received in this market. 85% of renters who pay an amenity fee for technology feel it’s worth it. These fees include internet services, modern access control and smart thermostats, and the national average is around $75 per month for these tech enhancement packages. Parks Associates also found that when these costs were bundled into rent, there was less satisfaction than opting in to separate tech amenity packages. Overall, this addition supports higher asset valuations while driving up incremental revenue and recovering costs.
Parks Associates is hosting Smart Spaces September 16-17, in Dallas, Texas. I’ll be presenting on a panel on Tuesday at 4:15 PM CT, titled “PropTech ROI: Revenue, NOI & Long-Term Value.” We’ll dive deeper into what trends and investments are creating measurable savings for residents and property owners. If you are at the event, I’d welcome a discussion about what trends and PropTech are impacting your property.
Sandy Jack is Vice President of Strategic Relations, Multifamily, Nomadix, an ASSA ABLOY company. With over a decade of experience in the multifamily industry, she is a passionate and trusted adviser, helping leverage connectivity and proptech solutions to help properties achieve their business goals.