The rise of the Smart Apartment is well-heralded, and with good reason, as residents have shown they are willing to pay a premium for the latest digital features. Millennials are willing to pay about 20% more and stay longer in buildings that offer modern lifestyle conveniences.
At the same time, those digital upgrades can significantly improve operational efficiencies, giving property owners and managers better net results. Owners and managers can create significant value for their properties around smart apartments, mobile apps, and ancillary revenues from a host of highly desired services, from dog walking to automated package management and much more.
There is a wide range of IoT solutions available today to support smart apartment initiatives. Focusing your resources depends entirely on your specific situation, competitive set, local market variables, and portfolio management imperatives. For example, a twenty-dollar per month savings on electricity due to smart thermostats may be highly valued in some markets. In another market, smart apps and access control for dog walkers and delivery people may be of higher interest.
When making investments in technology solutions to enhance net operating income (NOI) and add value to your multifamily or another multi-dwelling unit (MDU) properties, consider these three factors:
Invest in a scalable foundational architecture that will grow with your needs.
Most legacy buildings (over 5-10 years old) do not have a managed WiFi infrastructure. Most often, apartment buildings are set up to provide individual connectivity to each unit, with each resident making their account with one of the approved service providers for the building. By investing in a property-wide, managed WiFi infrastructure, you are investing in a foundation on which to build all the new and future systems you choose to deploy.
Align with knowledgeable, trustworthy expert advice and guidance.
Technology changes quickly, and so do your needs. Seek out and align with managed service providers and consultants who understand today’s tech solutions and are willing to listen to your specific needs and planning initiatives. Investing in the services of a reputable technology architect or consultancy is often a great place to start. When it comes time to sign up with a managed service provider, make sure they can handle everything, from network design and installation to maintenance, support, and analytics.
Choose with an Intent
Choose tech with an intent to create community, experience, and lifestyle.
By focusing on creating these essential elements, you will be making investments that are not simply knee-jerk reactions to the latest fad but well-reasoned, intentional decisions that will help create lasting value for your portfolio.
Some specific IoT and Smart Apartment solutions to consider:
Whether for individual apartments, property gates, fitness rooms, pools, and more, connected entry and access control solutions make it easy for residents to let friends or service people into their apartment, access gates, or doors through a mobile app or digital key technology. Research shows that 61% of millennials are likely to rent an apartment specifically because of its electronic access features, including keyless entry doors. They are also likely to rent an apartment specifically because of its electronic access features, including keyless entry doors.
Whether smart thermostats or intelligent lighting, these IoT solutions can deliver significant savings. Many operators report that heating and cooling alone accounts for half or more of their monthly energy costs. It gives joy to many to start cooling down their apartment twenty minutes before they come home on a humid day! Providing automated, remote access and control of these systems deliver savings residents and managers can see and deliver smart home convenience residents want.
Today’s residents want community and lifestyle over all else. Their apartment community should be a place that supports their preferences, not just a place to store their stuff. Mobile apps provide the glue that pulls it all together. From messaging apps to stay in touch with other residents, paying rent and utility bills, controlling the lighting and temperature, investing in an integrated, customized mobile app helps build community.
WiFi as a Service
When residents pay you for their monthly internet service, you are in effect becoming the carrier but don’t worry; you don’t have to actually become one! Using a reputable managed service provider to deliver WiFi and maintain service levels, you shift all the costs and worry to a third party. The revenue share agreement you make with a managed service provider is up to you. It can be pretty common to generate an additional $20-$30 per month per apartment for just internet services alone. The rent lift associated with smart apartment features is often an additional $25-$50 per month as well – even higher in luxury markets.
Your managed WiFi network will also provide outstanding opportunities to improve operational efficiencies. Connected appliances like dishwashers and refrigerators help enable effective preventive maintenance programs, saving money on repair or replacement costs. Connected leak detection and similar safety systems help prevent minor mishaps from becoming much more significant problems – again, saving you money.
Smart Apartments are the key to higher guest satisfaction and new revenue opportunities. By starting with the proper foundation of a managed WiFi network, getting the right professional advice, and committing to making technology decisions that support the community and enhance resident experience, you position your portfolio for growth.