Installing smart home technology is growing in popularity in the multifamily property industry. Many property owners are installing devices in both individual rental units and common areas. And smart tech can be a smart move. Offering this kind of technology in your property can increase your fair market rental value, attract higher-paying tenants, and make your property stand out on the market.
But it’s not without its drawbacks. You need to weigh the pros and cons of offering smart home technology before you start investing in it.
What smart tech is right for multifamily properties?
Smart technology shouldn’t be a gimmick. It should provide a valuable service to you and your residents. That service might be a convenient amenity, energy savings, or increased security. Here are some of the most popular smart home tech items in multifamily properties:
- Smart locks and digital doorman. Rekey properties without incurring an additional cost and create a system that acts as a digital doorman for deliveries and guests. Vendors like brivo and Mobile Doorman have created cloud-based access control systems and apps that allow residents to interact with your property from their mobile devices.
- Smart home lighting. Turn lights on and off from a smartphone, reducing energy costs and providing an extra layer of security for vacant properties.
- Automatic temperature controls. Stop paying to heat empty properties with smart thermostats, controlled by a smartphone from anywhere with an internet connection.
- Automated water sensors. Sensors alert you to the presence of water when there shouldn’t be, helping you put a stop to potential water damage issues.
- Building-wide wifi. Offer building-wide wifi for free or a nominal charge as a rental perk.
Is smart tech right for your property?
Smart tech won’t be the right choice for every property in your portfolio. But if you have a Class A property, then you can’t compete on the market without it. Renters at this level expect it. Class B properties should have the tech if the current market is demanding it. Otherwise, you won’t need to consider it for at least a few more years until the prices drop or the tech becomes obsolete.
Smart home tech can be a great addition for Class C properties, but you’ll need to choose the items carefully. Make sure current rental rates will support the investment and look for less expensive options.
Make sure you protect yourself & your residents
The biggest negative when it comes to smart tech in your multifamily property is the risk it creates for you and your renters. You’ll need to put safeguards in place to mitigate that risk. Because this technology is all connected to your internet service, you’ll need protection from cyber-attacks. That includes encryption for sensitive data as well as anti-virus and anti-malware software.
You may want to partner with an experienced IT company who can help you keep your smart tech up-to-date with the latest protection. Leslie Carhart, a cybersecurity professional, offers advice for property managers considering smart home tech. At a minimum, she says, property managers need to prevent resident access to controls and have networks professionally secured.
Remember that you’ll need to teach renters how to responsibly use the new technology. Then put community rules and guidelines in place. This will ensure that everyone knows the rules and understands what will happen if they don’t use the technology properly.
Consider putting tenant’s devices to work
You can spend a small fortune installing smart technology in your multifamily property. But you don’t have to. One of the ways to cut costs is by putting your residents’ own devices to work. Most systems will connect through their smartphone, so you won’t need to provide a separate hub for operation.
Many residents likely already have an Amazon Echo or Google Home device that can control smart home technology. If they don’t, think about using these devices as a renewal incentive or rental concession. They are inexpensive, will operate all the smart home technology, and can be a big perk for renters.
Questions to ask before you invest
Ready to take the smart tech plunge for your multifamily property? Here are a few questions to answer before you start shopping.
- How will installing the technology help my property? It could make it more competitive on the market or attract a new demographic of renters. Multifamily Executive says that smart home tech also “provides asset protection for owners and operational benefits for property managers.” Take those benefits into consideration.
- How much could we save on energy costs? Do an in-depth analysis of what you are currently spending on common areas and what the tech could help you save. Remember that your renters could end up saving, too, making your property a more attractive one.
- Will there be a return on the smart tech investment? If you purchase the devices, will it help you increase the fair market rental value of your property? Or are you unlikely to see much increase? Don’t invest in it if it won’t pay you back in the long run.
- Can I actually afford to buy the technology? Don’t buy the technology if it’s going to create cash flow issues for you. Carefully price out everything you are going to need and look at your annual budget.
- How could it complicate my job as a property owner? You’ll be responsible for the maintenance and upkeep of the technology, especially in common areas and possibly in your individual units as well. Ask your property manager if they have the resources necessary to help out with this task.
Once you’ve answered these questions, you should have a clearer idea about what technology is right for your property and where to start investing. Need more advice on bringing smart tech to your property? Contact Theresa Bradley-Banta today to set up a free consultation.
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