2020 budget season is upon us. At a time of year when responsibilities are already overwhelming, additional financial work can feel like a burden – especially when it comes to thinking about new initiatives for a property, like installing smart technology. However, it is critical that community managers make smart tech a priority for 2020 and beyond.
Smart tech in multifamily properties is shifting from being an amenity to a necessity. Community managers who make smart tech a 2020 budget priority will not only get ahead of the curve in terms of rental trends but also find a number of financial and operational benefits for their properties and their residents.
Current & Future Resident Satisfaction
The most important part of any community manager’s job is resident satisfaction. Both current and prospective residents must be happy for a property to be successful. Amenities that provide more flexibility for those with overloaded schedules or long commutes enable residents to enjoy their home environments more, especially if they’re able to spend less time on chores and errands and more time with family and friends.
The makeup of the rental market continues to be dominated by younger, tech-savvy Millennial and Gen Z residents who are increasingly coming to expect a seamless, convenient, and secure living experience. On-site laundry, pools, and gyms are no longer enough. Resident demand for smart lighting, smart thermostats, smart locks, etc. is increasing to the point that some properties consider these amenities to be part of what they define as their new set of basic amenities1.
Business-savvy community managers who include smart tech in their 2020 budget will find themselves ahead of the curve, with less turnover, fewer vacancies, and overall higher resident satisfaction.
The benefits of smart technology aren’t just for the residents. Community managers will also see significant operational cost savings by incorporating smart technology into their properties.
Take smart package lockers, for example. Community managers who install package lockers on a property can reclaim anywhere from 14 to 28 hours a week2 in time previously spent accepting, processing, and distributing packages to residents.
Smart tech can also provide data about a community’s residents that is highly beneficial for community management. Smart locks, for instance, can provide data about when residents arrive home, allowing community managers to schedule community events or to send important emails regarding maintenance activities based on when the highest number of residents will be available.
The operational savings and resident insights provided by smart tech make community managers’ jobs easier and allow them to focus on the most important part of their job: the residents.
Strong Return on Investment
Adding smart technology may seem expensive, but, in reality, the return on investment makes smart tech a financial benefit, not a financial hindrance.
Properties typically see a faster and higher than average return on investment for smart tech. An A.C. Lewis Management property in Baton Rouge cited a projected return on smart tech investments at 30%3, well above the average capital investment return of 10%. Not to mention the shorter ROI turnaround time. Smart package lockers have the fastest ROI at an average of 8 months4, while smart locks and thermostats provide ROI within roughly three years.
While there is an upfront cost associated with adding smart technology to a property, there is also a relatively fast payoff for community managers willing to make the commitment.
As our society grows increasingly reliant on smart technology, community managers must adapt to residents’ changing expectations in order to stay competitive.
Smart tech not only allows community managers the opportunity to save on operational costs, but it also enables them to realize a stronger return on investment and higher resident retention rates. Properties that adopt this approach won’t simply adapt to survive, they’ll adapt and thrive.
- Rieder, Elie. Forbes. Strike the Right Balance with ‘Smart’ Tech To Boost Multifamily ROI. (2019). https://www.forbes.com/sites/forbesrealestatecouncil/2018/05/29/strike-the-right-balance-with-smart-tech-to-boost-multifamily-roi/#12d2028119af.
- Parcel Pending. Property Managers Saving Up to 28 Hours and $1,200 Per Week with Parcel Lockers. https://www.parcelpending.com/blog/property-managers-savings-parcel-lockers/.
- Bousquin, Joe. Multifamily Executive. Existing Apartments Need Tech, Too. (2019). https://www.multifamilyexecutive.com/technology/existing-apartments-need-tech-too_o.
- Parcel Pending. Parcel Pending Lockers Showing Solid ROI. https://www.parcelpending.com/blog/parcel-pending-lockers-showing-solid-roi/.