Smart apartments are the hottest thing in multifamily living. Residents love them, but are they really worth the investment?
The short answer is a resounding yes.
But the long answer is a little more complicated, simply because we don’t have a lot of data on smart apartments specifically. We know the ROI is there, but we are still waiting to see the actual numbers.
However, we can look at another industry for guidance: Building Automation Systems. BAS are the intelligent systems that make up smart buildings, and there is hard data to suggest these systems save a ton of money.
According to Intel, smart HVAC systems alone can save commercial buildings between $15,000-$50,000 per year (and savings can reach $100,000 in states like Arizona). Moreover, the ACEEE predicts that smart building systems will save the commercial real estate industry over $50 billion.
This is just the savings from building automation. Smart apartments combine BAS systems with even more ways for property owners to save money. Let’s look at the different areas where smart apartments will generate a positive ROI.
Attract and Retain Residents
Turnover can be a big issue for apartment buildings. It’s costly to find new tenants and prepare units for those new tenants to move in. Resident retention is a major cost-saving mechanism that smart apartments can help amplify.
New studies have shown that renters prefer smart apartment amenities to traditional amenities like swimming pools. Combined with the early-adopter advantage, smart apartments are highly attractive to picky residents.
Moreover, smart apartments free up building managers to concentrate on retaining residents by building community within the complex. Since many of their day-to-day tasks are automated, they can spend their time making their apartment complex feel like home.
Utility Cost Savings
Smart apartments and smart building systems are the sources of incredible utility savings that translate into cash back for residents as well as property owners. Smart HVAC, thermostats, and Power over Ethernet (PoE) lighting can save buildings thousands of dollars every year.
In smart apartments, property managers can automate and regulate utilities throughout the building directly from the smart apartment platform. Residents can also use automation to manage their utility costs, such as scheduling their thermostat to adjust to cost-saving mode when no one is home.
Smart apartment platforms can also help managers regulate areas that are not in use, such as vacant apartments and common areas that aren’t populated. When managers have appointments to show vacant apartments, they can set the environment so that it is comfortable by the time these potential renters arrive.
Command Higher Rents
People are continuing to flock to cities, especially millennials and, surprisingly, retired baby boomers. These urban residents want to enjoy their weekends without having to mow their lawns or fix up the bathroom. They also prefer smart apartment amenities to traditional amenities. Renters are willing to pay up for spaces with high-tech amenities and proximity to the urban core.
Renters today are looking for apartments that enable their lifestyle. This includes “Living as a Service” amenities like easy transportation, resident mobile apps, and on-demand professional services. These are the types of perks that command higher rents, especially in highly-competitive urban markets.
Improve Staff Efficiency
Smart apartment platforms help managers streamline workflows and keep staff on track. With automated task scheduling, managers can set up daily, weekly, and monthly tasks for their staff, communicating in real time for execution and follow-up. Other tasks are removed completely thanks to smart home tech.
One example is the act of retrieving keys for maintenance requests or lock-outs. In a traditional complex, when tenants are locked out of their apartments, it could take a staff member 15 to 20 minutes to grab a key, and he or she may be tied up when receiving the call. With smart locks and temporary e-keys, building managers can let the tenants in remotely. This saves significant time for the staff.
The smart apartment platform is key to higher levels of staff efficiency. Tasks that used to take hours a day are now simplified to clicking a button.
Early Detection of Major Problems
With traditional apartment buildings, managers often wait until something stops working before issuing a work order. Residents won’t always alert building managers about appliances that are not operating normally. Small issues can turn into big problems if not caught right away.
Imagine a small leak starts under a resident’s kitchen sink. They don’t notice the link and it drips for days, then weeks. Once the resident notices the problem, the kitchen floor is ruined and water started to trip into the unit below. A $1 fix turns into thousands of dollars of repair.
However, if this happened in a smart apartment, the leak would have been found on day one by smart water sensors. A maintenance ticket would have been automatically generated, and maintenance staff would have spent 5 minutes fixing it. Crisis averted.
Routine maintenance is a huge cost saver for apartments, and it’s made even easier with smart apartment technology.
Underlying all of these cost-savings benefits is the biggest benefit of all: Data. Smart apartments capture and utilize data to save energy, improve maintenance workflows, and make the lives of residents easier. From catching water leaks to monitoring foot traffic in public areas, there are innumerable ways to optimize the living experience for both tenants and landlords.
One key insight made possible with smart apartments is the use of public space. Thanks to occupancy sensors, you can know which spaces in your building are used most often and which are ignored altogether. If you’re trying to decide whether or not to repurpose a physical amenity like a basketball court, this occupancy data will give you a definitive answer.
Investing in Smart Apartments
Smart apartments aren’t just a smart investment today– they can also help future-proof your development. By laying the foundation for future technologies, smart apartments become a platform on which new services and amenities can be added. As tastes change, smart apartments can change with them. Your building will always be compatible with the latest popular amenity or time-saving management feature.
Not all smart apartments start from scratch, either. If you have an existing building, you can work with an IoT service company to retrofit your building for a fraction of the cost of buying new.
While we’re still waiting on the hard ROI data for smart apartments, the benefit to owners and residents is clear. The exciting part is that we are just beginning to see their true capabilities. The more we invest in smart building infrastructure, the more services, amenities, and devices will be created to live on those platforms.
The possibilities are endless, and those who make the investment today are sure to reap the rewards of the future.
Homebase brings the smart apartment experience to new build and retrofit multifamily with trusted technology that delivers intuitive building access control with smart locks, automation of property management, new revenue with property-wide WiFi, and IoT technology amenities residents enjoy. All completely installed and managed for the multifamily innovation leaders of this decade.