The 6 Criteria to Consider in a Smart Apartment Partner
In 1972 my parents bought a 4 unit apartment building in Santa Ana, and later several others. As the bookkeeper for our small family business, my Mom kept track of who had paid and who hadn’t on a giant green ledger. She later learned to use Quickbooks to log the rents and paid bills on her Dell computer.
The apartment industry has come a long way since then. My unscientific assessment is that well over 50% of multifamily vendors are providing some sort of technology solution with each of them promising to deliver better efficiencies, lower resident turnover, improved rents, and reduced costs. Smart apartment technology is one of those promising solutions that management companies and property owners are especially excited about.
Earlier this year, PayLease acquired Zego, the hub for smarter apartment living. Over the last four months, I’ve spoken with a number of customers, prospects, and key industry leaders about the hot topic of smart home tech. I’ve been pleased to hear how well our new products have been received in the market and the ROI that owners are getting from smart apartment technology.
Based on my conversations, there are three key value drivers that owners and managers are excited about.
1. Rent Growth
Smart apartments have proven to command an additional $25-$40/unit/month in increased rents.
2. Staff Efficiency
Smart apartment technology can dramatically reduce the liability and time spent on manually resolving lockouts. Because smart locks bypass the need for key control, service ticket times are often reduced by 15 minutes per ticket. Property staff can also control & audit maintenance requests and unit access, streamline their workflows, and reduce vacant unit energy costs.
3. Preventative Maintenance
A survey by HomeAdvisor found that the average cost to restore or repair water leak damage is over $2,500 per household or unit, and most water issues affect multiple units. Smart sensors and thermostats can quickly identify small water leaks and HVAC issues before they become catastrophic.
Despite the potential to significantly increase NOI, property values, and staff efficiencies, most management companies have not yet implemented smart technology across their full portfolio. The common concern, it seems, is the startups and new entrants in this space are too inexperienced to support established management companies and their residents.
This is a legitimate concern. As a property owner and technology executive with over 40 years of experience in the multifamily industry, I’ve seen owners get burned by flavor-of-the-month technology companies that didn’t fully understand the multifamily industry.
Vendor Evaluation Criteria
The good news is that the needs of the market have set specific criteria in place for multifamily smart apartment vendors. You’ll want to steer clear of any vendor who doesn’t have:
1. A proven track record in the multifamily industry.
An established, upstanding reputation in the industry will ensure that your vendor is familiar with the challenges that multifamily operators face, and can tailor their product offerings accordingly.
2. The ability to build and maintain seamless property management system integrations.
Any provider can claim to have an integration into a Property Management system, but you should choose a vendor that has a multi-year track record of building and maintaining Property Management system integrations.
3. Long term, committed capital.
A credible, long-standing business is crucial for success. Several of the venture-backed startups in the market will no longer be in business in 2-3 years.
4. An enterprise grade smart hub.
Watch out for providers that utilize Raspberry Pi computer boards in their Smart Hubs, a technology intended for small, DIY solutions. Instead, work with a provider that offers a commercial grade, security system caliber hub with the capability of connecting to smart home devices operating across all major industry protocols.
5. Integration with Z-wave devices.
Multifamily owners can eliminate the risk of obsolescence with hardware agnosticism. Choose a provider that integrates with Z-wave, whose devices make up 70% of the smart home market and are fully interoperable.
6. World-class implementation and support.
Consumers complain more about customer service than the actual product. Your new partner should have an established track record of providing 24/7, top-notch support to on-site teams and their residents.
Management companies and owners that follow this evaluation criteria will de-risk their implementations and benefit from the advantages of Smart Technology for years to come.
I would be remiss if I didn’t invite you to learn how PayLease Smart can impact your NOI.
Access your smart technology, resident communications, maintenance requests, online payments, and more on one community-branded mobile app.
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