The most consequential innovation of my career in multifamily real estate has been the transfer of services to the Internet. We conduct nearly every aspect of the residential experience online: accepting applications, giving tours, receiving payments, scheduling maintenance and renewing leases. About the only thing we can’t do online yet is live there. We’ll check back in a decade.
Proptech, or property technology, is an economy unto itself, a market projected to surpass $32 billion by 2030 as people transform where they live. Residents can scout, tour, lease, move into and pay for apartments with little person-to-person interaction. Some people prefer it that way.
Meanwhile, property managers use big data and AI to supervise on-site functions, streamline communications, and curate personalized experiences for residents.
Today’s multifamily residents want smart-living solutions, and a WiFi infrastructure built to support them, more than they want covered parking or pools. To reach that constituency, the multifamily housing industry constantly scouts proptech’s leading edge for ways to enhance the residential experience. Creative companies sprout new proptech offerings daily. Here are some we’re watching.
Proptech for the home touring process
Because our renters prefer this solution, and the technology is so remarkable, we can administer the complete leasing experience online. Every aspect of the process is digitized, from the initial inquiry to the virtual tour to the lease application and execution.
Customers access 24-hour information through AI-powered chatbots and self-guide their progress. They even self-guide their apartment tours.
Prospective renters avail themselves more frequently of these services. We provide registration options and one-time codes to tour model units, and prospective renters do so on their schedule and without agents.
This process works well and has prompted management companies in a new direction. Some are moving their leasing and sales operations off-site, centralizing them with trained and specialized agents directing such traffic for all properties in a portfolio. It’s a procedural departure, and we’re not there yet, but the concept is gaining steam.
Moreover, AR (augmented reality) and VR (virtual reality) are gamifying the touring and staging process in a positive way. Some renters activate leases based solely on taking VR tours from across the country.
Tech enhances staging as well. Eighty-two percent of real estate agents say proper staging improves the buying experience. By using AR devices, agents stage virtual units more affordably and with better personalization. Prospective renters further use AR apps to compare square-footage prices, view interactive floorplans, geo-locate properties within communities, and walk or drive the area virtually before visiting a physical location.
Data and AI for multifamily real estate
CRM software is essential in multifamily real estate, and the market is filled with good products. We employ platforms such as Entrata and Yardi to manage services, attract new customers and consolidate operations. And, like other multifamily property groups, we’re driving NOI through AI-based applications.
Artificial intelligence will revolutionize multifamily real estate, as it will every other industry. As “Multi-Housing News” reported, property managers employ AI in marketing, leasing services, resident support, and so much more. AI and data now form our business’ nervous system.
We use Big Data to conduct predictive and prescriptive analyses of demographic data, industry trends, and tenant preferences. We’ll dive more into detecting patterns of customer behavior to tailor services and experiences to them. In doing so, we’ll increase satisfaction, loyalty and renewal rates.
To do this, however, we need more data. Ellen Thompson, CEO of Respage, wrote a thoughtful piece about harnessing the contrasting data we collect from PM software, residential apps and third-party surveys into a tightly focused funnel for better analysis.
Smart buildings, smart homes and smart apartments
Smart buildings deploy technology to improve efficiency and sustainability. Automated sensors and processes not only measure building characteristics (temperature, airflow, occupancy, etc.) but also use that data to manage building operations.
For example, as Cisco notes, smart buildings automatically can increase ventilation when room occupancy increases or activate disinfecting procedures when people leave a room.
Smart homes employ similar technology to automate locks, garage doors, HVAC units, appliances, security features, and entertainment systems. Smart home solutions will be a $581 billion industry by 2032, according to Precedence Research, and apartment residents demand access to similar features. One survey found that prospective renters value technology more than pools and covered parking and are willing to pay higher rent for it.
The smart apartment will integrate technology in and out of the unit to create a seamless experience across the property. Residents will open entry gates and doors with mobile apps. They’ll pay rent, file maintenance requests, and operate appliances via apps as well.
Property managers will use connective technology to build community through scheduled meetings and events. Residents themselves will mingle to discuss community issues and solutions.
Millennials, according to Goldman Sachs, prioritize services and solutions over products. “Access, not ownership,” the financial institution reports. As a result, an apartment complex parking lot might transform into a ride-share space within 20 years.
Let’s face it: Apartment WiFi can be challenging. Renters are dissatisfied with slow or interrupted service, often ask how to fix it and are willing to pay more for fast, stable WiFi. One solution property managers are exploring is managed WiFi.
With managed WiFi, or WiFi-as-a-Service, property managers provide internet access through a single provider instead of having residents maintain their WiFi services. Managed WiFi companies promise higher speeds, stable access and no (or at least fewer) dead spots. It’s considered more reliable, requires no additional devices and is move-in ready.
Since good WiFi is a requirement rather than an amenity, managed plans benefit renters and property managers. The National Apartment Association reports that 90 percent of renters dismiss properties with unreliable connections, and 75 percent are willing to pay higher rents for included broadband access. The NAA found that managed WiFi can attract new renters, increase revenue and lower cap rates.
My first experience with proptech — targeted digital ads for apartments that followed users after they visited our sites — left me amazed. That was only a few years ago. We now manage nearly every component of the rental experience digitally except fixing leaky faucets and replacing splintered doors. Who knows? Maybe that will change soon as well.
As for the experience of apartment living, residents continue to vote tech atop their list of requirements. And they’re inclined to pay more for it. Property managers must listen.
Michael H. Zaransky is the founder and managing principal of MZ Capital Partners in Northbrook, Illinois. Founded in 2005, the company deals in multifamily properties.