As the economic climate remains uncertain, multifamily owners are looking for ways to reduce their operating costs and upgrade their properties. Even if the market begins to recover, recent downturns have made one thing abundantly clear: businesses must plan ahead if they want to survive long economic droughts.
In order to fortify their assets and remain competitive in the industry, multifamily owners have needed to take steps to cut costs and generate additional revenue. Many owners and operators are finding success leveraging PropTech to streamline their operations in order to reduce expenses and increase retention.
PropTech, which stands for property technology, refers to smart technology (smart locks, smart thermostats, smart motion and entry sensors, etc) optimized for the multifamily community setting. While apartment renters enjoy the conveniences offered by these devices, property managers and their teams can monitor device activity across their communities , respond to emergencies immediately, and better service their residents.
While once considered a ‘nice-to-have,’ smart technology is quickly becoming commonplace among properties of all types, from Class A to Class C. Smart tech is being leveraged to automate different aspects of property management, from self-guided touring to common area access control. This has enabled communities to operate with less staff on hand, decreasing overall payroll expenses.
Yet these devices aren’t just catching on with owners – they’re a hit with residents too. In fact, 56% of residents on average express a desire to renew because of the smart tech in their units. Smart amenities may soon overtake pools and gyms in popularity, with 82% of residents saying they want to live in apartments with smart devices installed, according to a survey by Rent.com. Multifamily communities are now offering these devices in the apartments they lease to both retain and attract residents, increasing occupancy.
To drive down costs even further, some owners are investing in PropTech under the Hardware-as-a-Service (HaaS) model. While traditionally popular in verticals such as phone or computer leasing, HaaS is slowly finding a niche with multifamily asset owners. Under HaaS, all the owner’s maintenance and installation costs are rolled into one fixed monthly fee.
This has allowed owners to convert their capital expenses into operating expenses while maintaining predictable overhead. With this budget flexibility, owners can better safeguard their portfolios during economic turmoil. Some HaaS programs now even include free product upgrades, allowing owners to update their suite of devices without needing to spend thousands of dollars.
With a recession potentially looming, it appears that more owners will consider investing in smart tech to increase their profit margins. If early signs are any indication, PropTech and HaaS will provide communities with the affordable solutions they need to withstand market downturns.