They Certainly Aren’t Making Any More Land...
You know what they are making more of? Multifamily communities. And by “more of'', I mean they can’t build them fast enough. Whether you’ve recently been a resident, are currently a resident, or are an owner/operator, you probably know there’s an entire set of younger generations leasing, not buying. Facts. Now, historically, multifamily owners and operators have relied on amenities like pools, fitness centers, and clubhouses to attract residents to their communities. While amenities like these are certainly still worth featuring, they’ve become customary. They’re run of the mill. They’re garden variety. Residents have increasingly begun placing their priorities elsewhere. As the industry adapts, owners and developers must think carefully about how community amenities and services work together to create an elevated living environment more attractive than the competition.
With Today’s Residents, It’s Personal
With a new generation entering the market, amenities need to be flexible to meet the changing interests and needs of residents. Which amenities bring the most value to renters? Which will enhance the quality of life, while minimizing turnover? The purely “physical” amenities like the traditional entries listed above don’t always satisfy (and certainly don’t impress) today’s renters. The modern resident is increasingly interested in more abstract benefits – particularly those that contain an ability to customize and personalize.
Unsurprisingly, smart home technologies have emerged as the powerful new amenity offering that scratches this itch for residents, creating elevated living experiences that attract prospects and retain residents. But surely it can’t be that easy? Let’s change our angle and look at it again. How much does it cost to lease a unit? While the answer will change for every asset, one thing is certain: it costs more than renewing a satisfied resident’s lease. Let’s change again...how much does it cost to keep a resident satisfied? Variable answers aside, many of us tried to give a parking spot or two, an extra key fob, maybe even a discount on pet rent. And while those things may work, only a few of the things we generally tried were depreciable. Injecting capital into the asset can be that “have my cake and eat it too”. Brass tax....
Hit Me With the Results!
20% - 40% year over year. Did I lose you? While those still with me are wondering, “how is that possible?”, I’ll tell you. Think in the ballpark of $25 - $65 per month, per unit. All the devices are yours to keep; unlike offering valet trash service that you have to keep offering to see the repeating rent roll line item. The rent premiums associated with smart tech amenities, coupled with the increases in staff flexibility, utility cost savings, and a future-proof foundation for tech-forward growth, get us there. Automated tasks that previously required the physical presence of on-site staff: the elimination of re-keying by enabling managers to program locks from anywhere, automating HVAC systems in vacant units to save energy and reduce costs, giving maintenance technicians time back on work orders (with smart access, “chasing keys” becomes a thing of the past), automating mundane office tasks like registering guests or issuing access codes. We’ll give you an inch, and you can take a mile.
Does it Work? Will it Work for Me?
Can it Work for My Residents Financially?
Don’t deflect. Don’t project your fear of losing residents on the investment you know you have to make in your assets. Don’t assume your residents aren’t in the set of renters that give value to this tech. Rapid fire time:
- 94% of residents said that being able to personalize their space was important, according to the NMHC Consumer Housing Insights Survey
- 63% of residents said their lives are so hectic that they are actively looking for ways to make things easier, according to the NMHC Consumer Housing Insights Survey
- 72% of consumers under the age of 36 own at least 1 smart home device
- The average American checks their smartphone approximately 52 times per day according to Deloitte’s 2018 Global Mobile Survey
- 65% of Baby Boomers, 72% of GenX, 86% of Millennials, and 96% of GenZ renters all responded they’d be willing to pay a premium for apartments outfitted with smart tech, according to the Schlage and Wakefield Research survey
Why? We talked about it in the previous entry. Imagine coming home to an apartment that is already expecting you. As the smart lock on your front door opens, lights come on and smart blinds open to welcome you home as the thermostat immediately sets to your preferred temperature. Sequences like this only scratch the surface of what’s possible with smart home solutions. Experiences like these are helping communities differentiate themselves in today’s crowded market by redefining the resident experience for a new generation. Ultimately, we are only beginning to see the benefits of using technology to enhance the resident experience, increase the efficiencies of our staffs, and future proof our assets. The needs of managers and residents are evolving faster than ever before, and amenity innovation will play an increasingly critical role for multifamily communities in the years to come.
Time to Bring It All Home
We’ve taken a trip, you and I, down the smart tech road. We’ve broken your previous concepts of smart and hopefully opened your eyes to the numerous benefits. We’ve added functionality for your teams and given residents a shining example of the kind of asset you want yours to be. Ultimately, we’ve insulated your communities against competition from the new kid on the block, while providing additional sources of revenue and asset value. We’ve really accomplished, with our smart tech integrations, a solution for the traditional property management pitfalls. The most important step comes next. That step is moving from the norm into the future; moving away from the static and into the dynamic. That is what you must do next. That is what your competition is going to do. Get there first.
VP, Business Development