When many people think of real estate, innovation and technology usually aren’t their first thoughts. In fact, real estate has historically been behind the times when it comes to adopting technology.
But that’s all changing thanks to modern real estate innovators and disruptors. By embracing innovations like analytics, sensors, and smartphones, property technology (proptech) companies are taking real estate into the 21st century and beyond.
According to the market intelligence platform CB Insights, investments in proptech grew from $186 million in 2011 to a whopping $8.9 billion in 2019. Undoubtedly, proptech is the next big thing in real estate — and it has the power to help multifamily property owners overcome big challenges. Here’s how proptech can help cut costs, improve the resident experience, save time and maximize NOI.
The Problems Multifamily Owners Face Today
There are plenty of challenges affecting multifamily owners these days, but perhaps the three biggest are property management turnover, operational efficiencies and revenue growth.
Problem No. 1: Property Management Turnover
According to a survey conducted by the National Apartment Association (NAA) and ndp|analytics, staffing and recruitment are the biggest concerns plaguing multifamily professionals. Whether you have an in-house property management team or work with a third-party company, high employee turnover is hurting your bottom line.
Today, multifamily apartment staffing suffers an annual turnover rate of around 33%, which is well above the national average of about 22%. What’scausing property managers to quit? Job-related stress and burnout are perhaps the leading causes of turnover. And it’s easy to understand why.
Your property management staff handles endless paperwork, facilitates move-ins and move-outs, oversees property access permissions, works with vendors, coordinates maintenance requests, manages package deliveries and so
much more. It’s a difficult job rife with tedious, manual processes that lack much-needed automation. And turnover is especially concerning considering that management staff keeps the building running smoothly and contributes significantly to cultivating the resident experience.
Problem 2: Operational Efficiencies
On a granular level, building operations encompass everything from property access control and maintenance repairs to delivery management and lease administration. When you zoom out to view the bigger picture, you see that these processes create the keystone to your success. At the end of the day, your NOI depends on smooth building operations. Improving operational efficiencies will boost your bottom line.
You might not be the person handling these daily operational tasks, but you should be focused on streamlining them. That means sourcing reputable vendors, automating labor-intensive processes and cutting costs where possible — which is a tall order, especially now amid labor shortages, high turnover and market volatility.
Problem 3: Maximizing Revenue
Everyone wants to maximize revenue but increasing NOI and returning a property’s performance to pre-pandemic levels pose big challenges. Of particular concern are mass movements away from many urban areas and a shift in what renters look for in apartments (due to new remote jobs, changing lifestyles, etc). Generating revenue in these uncertain times feels especially daunting. Maximizing revenue also means differentiat-ing your building from others. According to Real Page, demand for apartments is especially high right now, but what will make a renter choose your building over the competition?
How Proptech Can Help
You’re all too familiar with the problems afflicting the industry today. Luckily, there’s a property technology solution for virtually every frustration you’re facing.
Boost Resident Acquisition
The success of your investment hinges on maintaining a low vacancy rate. And while there are steps you can take to reduce tenant turnover, you can’t eliminate it altogether. So, it’s important to put ample effort into your resident acquisition strategies — and your best bet is to invest in technologies designed to simplify those tasks.
Proptech solutions that can boost resident acquisition efforts include:
- CRM software: Invest in a CRM (customer relationship management) platform to keep leads organized and stay on top of communication with prospects.
- Self-guided tour technologies: With self-guided tours, prospects can view your building on their own schedule — and staff members don’t have to take time out of their busy days to lead tours.
Increase Employee Retention
Retaining your staff helps maintain a positive resident experience and reduces expenses associated with recruiting, hiring and training new staff members. The key to retaining property staff is making their jobs easier through automation. Modern proptech makes building automation a breeze, saving management time and hassle.
You can automate building processes by:
- Adding a controlled-access package room to expedite the delivery process and spare staff the hassle of accepting, storing and distributing deliveries.
- Adopting robust property management software, which streamlines everything from lease administration to rent collection.
Streamline Building Maintenance
Staying on top of building maintenance is vital to keeping your property safe, reducing liability, saving money on costly repairs and retaining residents. And proptech can help you keep your building in tip-top shape.
For example, many property owners have installed smart pipes equipped with sensors that can detect potential leaks, exchange information and talk to each other. By analyzing the data, a smart pipe system can notify you before structural failure happens so you can send in a mechanic before you have a costly problem on your hands.
Another helpful tool is property maintenance software. By automating maintenance workflows with software, you’ll streamline each step of the process. Automatically, maintenance crews can receive new work request notifications, technicians can be assigned to requests and management or ownership is notified when maintenance is complete — there is no manual work at all.
Simplify Property Access
Believe it or not, ensuring simple yet secure property access can help improve the resident experience, cut costs and save time for staff. In fact, implementing access control is one of the most effective ways to boost your NOI.
Think about it: your residents want an easy way to let in their guests and delivery carriers. Your staff is sick of spending hours vetting visitors or organizing mountains of delivered packages. Even if you have a staffed front desk, their time is better spent offering personalized services to residents. And outdated access solutions like physical keys, key cards and fobs are a nuisance and an unnecessary expense.
Proptech solutions like smartphone-powered video intercoms and access control systems save you time and money by empowering residents to manage access for themselves and their visitors right from their smartphones. These systems offer a convenience and versatility that many residents are finding hard to live without — in fact, residents will even pay more for them. According to a study by Wakefield Research, 86% of millennials are willing to pay more per month to live in a smart apartment — which gives wise property owners the chance to ride a market trend while streamlining building operations and reducing operating expenses.
More multifamily properties are investing in smart technology by the day — and with good reason. As you’ve seen, proptech today can help you overcome the challenges of inefficient building management, employee turnover, resident acquisition and lackluster NOI. Who knows what it can help you overcome in the future?