When it comes to understanding technology, always ask the folks in the field. Over the past decade, multifamily owners, developers, and managers have focused a lot of time and energy on improving their use of technology, whether investing in telecommunications infrastructure, back-office accounting software, or energy-efficient “green” building. And with good reason: Today's apartment residents are looking for higher quality and more efficiency in everything from their cable television service to their utility bills. Even Wall Street recognizes the value of Information Technology—analysts routinely take IT strategies into account when evaluating the financial statements of multifamily companies.
Clearly, Information Technology merits a closer look, so the National Multi Housing Council decided to survey the multifamily executives who know IT best. Each year, close to 700 top apartment professionals gather to share their collective technology wisdom at the NMHC's Annual Apartment Technology Conference. This year, attendees were asked to look over the horizon at what the industry will be talking about—and reading about—over the next year. The results held a few surprises.
This is a well-informed group representing a solid cross-section of the industry. Of all the public and private apartment owners, managers, and developers surveyed, 36 percent had portfolios ranging from 5,000 to 25,000 units; 15 percent held smaller portfolios; and 49 percent reported portfolios larger than 25,000 units. In their respective firms, two-thirds of the respondents had control over or influenced the deployment of and budget for their company's IT purchases.
When it comes time to choose where to invest, these executives are only limited by the size of the budget. Thankfully, the apartment industry will spend more on technology in 2008 than it did last year, according to those in the know. Fifteen percent of those surveyed expect a significant increase, and an additional 52 percent expect some kind of increase. [See “The Stats: A Closer Look” on page 26 for more details.] What's more, technology budgets today are more significant: More than one-third of the respondents noted that their firm's IT budget exceeded $1 million; close to half cited budgets that exceeded $500,000.
This expert group has a lot to say about the future of technology in the apartment industry. Here are the three key areas where they plan to focus their attention in 2008.
BACK-OFFICE BOOST Company investment in business systems automation was deemed as “important” or as a “top priority” by a whopping 81 percent of respondents.
But what is the most important software? Nearly two-thirds of the respondents felt that revenue management—a pricing strategy employed by airlines and hotels that property managers now use to tailor lease prices based on unit availability and lease terms—will become the standard means of pricing units within three to five years. Only 11 percent felt that revenue management is not as effective as property-based pricing.
Unsurprisingly, the Internet will continue to dominate the multifamily industry as it does our daily activities at work and at home. A huge majority (76 percent) feels that the Internet is the single most important way to generate leads; 18 percent cited rental listing publications. Local television, radio, and print media are way down the list. In fact, according to the conference attendees, Internet marketing, pricing, and lead management will be the top systems priority for most apartment firms in 2008, followed by the automation of resident requests and payments. [For more details, see “The Stats: A Closer Look,” below.]
More than half of the respondents believe that most companies will lease apartments online within two years, and an additional 41 percent believe that some firms will be able to execute the lease transaction without face-to-face contact by 2010. The majority (61 percent) of respondents post their rental rates on the Internet today. Interestingly, of those whose firms do not, nearly all think that their firm's policy is wrong and that rental rates should be posted online.
SATISFIED RESIDENTS High-touch and high-tech are converging at apartment properties. This is still the place our residents call home, so there has to be a human element, but residents also want virtual access: Communication with apartment residents is expected to be primarily a virtual experience by 2010. E-mail, text messaging, and resident portals are expected to be the primary way residents and their property managers will communicate within two years. In fact, 93 percent of respondents said they consider resident portals to be either “critical” or “somewhat important” to improving resident services and operations.
Finally, it hasn't gone unnoticed that residents want to be able to pay their rent with credit cards. More than one-third of firms today accept credit cards for rent payments, while 28 percent do not. Instead, those firms accept nearly any other form of payment for rent, including checks and online payments.