Apartment Management Magazine The Next Frontier in Property Technology (PropTech) is the Workforce Housing Sector
Article provided by Arize
Smart technology is the blueprint for the future of multi-family communities. You can tour luxury skyscrapers and see all the latest products that make life easier, but this technology is now also finding its way into Class B and Class C properties. As devices and software become more increasingly mainstream, more and more owners, operators and residents are looking for the latest real estate technologies and their benefits as they look for more energy efficient solutions and security monitoring systems.
Tech companies are finding new revenue beyond their more affluent customers, and investors and venture capitalists want to get involved. In 2021, venture capital-backed companies in the real estate and real estate technology sectors raised $21 billion investors, according to data from Crunchbase.
The need to house the American workforce isn’t going away anytime soon, and the single-family housing market isn’t exactly favoring the buyer due to rising interest rates and soaring real estate prices. , rental units in multi-family properties are already seeing an increase in demand. the technology needed to manage these properties is ripe for wider use in industry.
The house has also become the new office for many professionals, so there has been less demand for commercial space. As many businesses have reassessed their need for office space with a growing pool of employees working from home, owners of Class B buildings are looking to convert office space in multi-family housing due to the availability of these commercial spaces and the current demand for housing.
Bridging the gap between value-added options for Class B and Class C properties
Real estate technology, or “PropTech,” does more than just make things more convenient. Many luxury, high-rise buildings, apartment complexes, and now low-income housing use similar technology as a property management tool. These smart solutions allow homeowners to find cost-effective solutions to costly issues such as energy consumption and costs, security monitoring and utility costs. It also allows Class B properties to give tenants what they are looking for, but at a better price. Being an early adopter is key to thriving in today’s Class B real estate market while remaining competitive with Class A communities.
There are many examples of how value-added amenities have crossed the class divide. Take the washing machine, for example. Several decades ago, most residents did not have washing machines in their apartments. Over time, landlords took advantage of washing machines, which grew in popularity, as a gifted amenity to attract new residents. Smart technology is following this same trend. Owners realize the importance of PropTech. The market has shifted from implementing smart technologies just to improve the resident experience to maintaining the cost of doing business to attract residents. It’s now a need that builders and developers are incorporating into their construction plans, as smart real estate technology – once a luxury piece of equipment – becomes a necessity to stay competitive in the marketplace.
What does the landscape look like now?
Driven by strong tenant demand for smart technology in homes and the attractive value of rising rents, multi-family communities are leaning into technology more than ever. Smart technology has made inroads in solving one-time problems faced by multi-family communities. This includes granting residents access to their units without having to manage hundreds of keys or remotely control the temperature inside the home with smart thermostats. These devices have made life easier for property managers.
The evolution of smart technology and its ecosystem platforms has arrived. Owners and operators now have intelligent, end-to-end technology ecosystems that are fully integrated with their property management platforms. Offer them turnkey solutions that streamline, automate and generate new revenue streams. Property owners are leveraging smart technology solutions to mitigate risk and protect assets. By using water leak detectors that alert managers the moment moisture is detected instead of hours later, managers minimize and even prevent costly property damage.
Plus, motion sensors and alarms help enhance property-wide security. Alarms are effective in deterring break-in attempts and protecting residents and property. These alarm sensors can also be placed in common areas, offices, hallways and apartments. Finally, smart locks allow residents and owners to lock and unlock apartments using an app on their phone or through their web-based management platform. Smart locks also have an auto-lock feature that ensures apartments remain safe and secure, even when an employee forgets to lock them. Smart apartment technology provides simple, smart, and innovative solutions to common multi-family problems, and it seamlessly forms connections that enrich people’s lives.
What are the benefits of smart technology?
Smart Tech Generates Net Operating Income (NOI). Smart technology is a safety measure and an investment in loss prevention. However, it is also an amenity that landlords can offer to attract new residents (and retain those they already have). In fact, offering smart technology as equipment can justify a rent increase of $40 to $50 per month per unit.
Increase in class and commercial conversion. The amenities are one of the main considerations when it comes to the class rating of a building. Smart technology alone won’t turn a building from Class B to Class A, but combined with other upgrades it can make things happen.
Return on investment (ROI). PropTech brings relief to property managers when they realize they can implement it in a multi-family unit without having to knock down walls or rip out drywall. Compared to the cost of adding other conveniences, smart technology is a bargain. Class B properties offer residential living at a more affordable price. Early adoption of smart technologies can allow Class B property owners to compete with Class A properties.
Call for the green wave of tenants
In 2021, Gen-Z was the only generation to submit more leasing applications than the previous year, in particular when it came to multi-family properties. These tenants are looking for apartments with smart technology that will not have a negative effect on the environment. Smart thermostats are more environmentally friendly. Lower energy consumption decreases the demand for electricity produced by power plants, reducing carbon emissions that cause global warming. This, of course, appeals to environmentally conscious tenants.
Do not wait ! Join the smart tech revolution
Smart technology adds immense value to owners and the communities they manage. It offers solutions at a lower price than what other amenities or services typically cost, and it’s easy to implement, prevents damage, and generates consistent revenue. Today, smart technology upgrades provide residents with an experience that meets and exceeds their expectations. Smart technology ecosystems, such as Arize, reliably improve ROI, NOI, operational efficiency, and resident retention and acquisition. These once “nice to have” upgrades are a necessity today, quickly becoming the cost of doing business and staying competitive in today’s multi-family market.
Arize is an all-inclusive platform that provides convenient, connected and secure living for properties of all kinds. From traditional apartment upgrades to new build high-end luxury apartments, we help your community thrive effortlessly with cutting-edge technology. For more information, visit www.arizehub.com.