With new starts on multifamily housing properties hitting record highs in recent years, almost 1 million new units are about to hit the market—nearly the most in over 50 years.
This influx of new multifamily properties has some owners of older properties scrambling to compete in a market where prospective residents are demanding cutting-edge amenities and conveniences. It seems hard to believe, but properties built before 2000 are now considered “vintage.” Although, given how much technology has evolved since then, it’s no wonder: The mainstream internet was in its infancy then, and the iPhone was still seven years away.
Today, our demand for connectivity is seemingly insatiable. Between streaming, scrolling, and swiping, the average U.S. household now has an average of 16 connected devices. Over half of multifamily residents now consider smart-home technology essential, and more than 8 in 10 would like to see it deployed in their community.
More important, they’re willing to pay for it: Over half of residents say they’d pay up to 10% more for properties offering advanced technology, and nearly 3 in 10 would pay an 11% premium or more.
Despite this demand for high-tech living and proptech, many property managers are reluctant to make the investment in upgrades to existing properties, or they put it off because it seems too complicated, overwhelming, or expensive.
But that means they could be missing out on higher occupancy, larger net operating income (NOI), and ancillary revenue streams, not to mention earning a market reputation for delivering a modern, high-tech living experience.
Here are just a few of the options available for making “vintage” properties more attractive, safe, valuable, smart, and future-ready.
Sustainability/energy-efficiency tech.
A recent Apartments.com survey found that 3 out of 5 renters actively seek environmentally friendly properties, and a quarter of them are willing to pay a premium for green living amenities. Moreover, 40% say they wouldn’t even consider renting an apartment that doesn’t offer sustainable features.
Solutions like smart meters, programmable thermostats, intelligent lighting and even automated window blinds can help residents manage utility consumption, save money, and reduce their carbon footprint. Perhaps even more important, they also save property owners money: Nearly 65% of multifamily properties with at least one smart device installed can expect 10% to 20% in operating expense savings.
Smart safety and security.
Safety and security are top priorities for prospective residents looking for a new home, with nearly 30% willing to pay up to 20% more per month for these security features. In addition, these smart safety solutions can also help to reduce the risk of vandalism as well as property owner liability and insurance premiums. Aside from the risk of intruders, theft and other property crime, severe weather, and natural disasters can be hazardous in many parts of the country.
Whether it’s heavy rainfall and flooding, tornadoes, or even a fire, having technology in place to help residents feel safe and to communicate urgent information can be a big selling point. Nearly 60% of residents say they’d likely select a community with mobile access to open gates, buildings, individual units, and amenities, like an on-site fitness center or co-working space. They cite reasons that include both convenience and safety, and the fact that there’s no risk of lost or stolen keys to replace.
Meanwhile, 46% of residents say direct messaging and real-time safety notifications would be highly valuable, according to Park Associates research. These can be critical in an emergency, and, with the right network infrastructure, alerts can even be tailored to individual units or situations based on GPS location on the property. Rather than blasting an alert to the entire complex, you can send specific evacuation and rally point information to affected units only for an isolated incident, for example.
Preventive maintenance.
Keeping up with preventive maintenance on appliances and HVAC systems can save a tremendous amount of hassle and cost for both residents and property owners.
Modern proptech allows the implementation of smart appliances that alert when filters need to be changed or other service is required. The use of built-in sensors and troubleshooting technology can detect out-of-spec conditions and aid in repairs. Connected water leak detection tools and smart metering can help drastically reduce the risk and extent of water damage around kitchen and bathroom fixtures.
Aside from helping to avoid major failures and unexpected replacement, these smart property management tools can help optimize staff time so that they can address what’s needed before it’s too late but also without doing more than is necessary at the time.
Hybrid work support.
With over 35% of renters and nearly 65% of condo owners working from home, a growing number of residents are looking for communities that cater to their remote work needs, including dedicated home office spaces or co-working facilities.
Beefing up property infrastructure provides ample bandwidth and the capacity remote workers need, especially when it’s allocated properly with provisioned bandwidth for each unit. Some propertywide networking solutions provide for dynamic and customizable allocation, which allows property owners to charge a premium for additional bandwidth for those residents who need it, creating an added revenue stream to boost NOI.
The ability to offer smart solutions can have a major impact on occupancy and revenue for property owners: 85% who have installed these solutions say it has allowed them to increase rent 10% to 20%, and over 60% saw improved operating efficiency and lower operating expenses. Meanwhile, 87% expect to see ROI on their investments in less than three years.
In addition, according to Park Associates research, an impressive 83% of multifamily residents who have access to property-provided smart-home devices report being satisfied or highly satisfied with their apartment or condo, versus 66% without property-provided devices. Considering that nearly 3 out of 4 renters read reviews and 64% are willing to pay more for a highly ranked property, this high resident satisfaction plays a huge role in a property’s appeal and marketability, as well as, ultimately, filling units.
Of course, all this demand for high-tech living requires strong, reliable network connectivity to support it. Aside from the fact that communitywide Wi-Fi is a must-have for residents, virtually every smart home or proptech solution relies on high-speed, high-reliability bandwidth to deliver the premium experience residents demand.
As “millennial” and older properties look to compete with newer options, upgrading network infrastructure to include these modern amenities is table stakes for existing property owners. Offering charm, perhaps a bit of nostalgia, and more affordable housing, older properties can leverage modern connectivity and smart solutions to attract and satisfy even the most tech-savvy residents.
