In this wired world, technology has had an enormous, wide-ranging impact on the multifamily real estate market. That impact is most notably seen in the way property owners innovate and differentiate their holdings but really begins much earlier than that with the way in which owners examine the market and appeal to potential renters. It also affects the way in which owners and renters interact once they have entered into an agreement.
The bottom line is that demand continues to outstrip supply, and apartments are being snapped up as quickly as they can be built. The World Property Journal noted that as of February 2018, no fewer than 17,000 multifamily units were under construction in Chicago alone and that more than half were expected to come online — that outlet’s phraseology — by year’s end.
“Coming online” can be taken in a literal sense as well, as our firm is well aware. We have been including high-speed Wi-Fi in our Class A properties for the last five or six years, and in our Class B properties for the last two and a half to three — and we feature it not just in the units themselves but also the common areas.
That is the baseline standard in this day and age. That is what renters demand — particularly those from Generation Z, who are in their 20s and expected to outnumber millennials by later this year, making them a growing force not only in real estate, but in the economy as a whole. Gen Zers are the first generation to have the internet their entire lives, meaning (among other things) they are more tech-savvy than their predecessors and place a premium on connectivity.
Simply put, a smart property owner would be wise to embrace smart devices, as the presence of such technology — whether it controls security, lighting, televisions or thermostats — has great appeal to younger renters, particularly millennials. They have grown up around such gadgetry, and want to continue to live in places that feature it.
So, by all means, install voice-controlled services like Google Home and Alexa. Do as we do at our properties and equip renters with key fobs, which will allow them access not only to their units but to such common areas as the fitness center.
In a competitive landscape where young renters are very likely considering multiple properties, I believe those featuring the newest technology will be more appealing. And if prior experience with other amenities is any indication, the availability of technology-equipped apartments should translate into a rent premium for the property owner as well.
Yet another area in which tech has had an impact is that of package delivery. One source claims 41% of Americans receive between two and five packages a month, and the glut is particularly felt at multifamily properties: A typical building receives 100 packages a week.
To ensure safe delivery, install delivery locker systems at your property. These are far more cost-effective than those available through online vendors like Amazon. Tenants can receive a text or email alerts when packages arrive in their name and can then access the room courtesy of the key fobs mentioned above.
Texting and emailing are no longer viewed as cutting-edge technologies, of course, but they are the most widely used methods of communication among tenants and residents. Collecting contact information, and maintaining a database in which it is included, will take on added importance when other communication tools come down the pike.
Smart property owners are also able in this day and age to process leases and renewals online, courtesy of smart contracts and e-signatures. Also, I have found that hard copies of in-house communications like newsletters have gone the way of the dinosaurs. Renters much prefer to receive such dispatches electronically — and that is especially true of younger renters like millennials, who tend to be so environmentally aware.
Marketing is another area where tech comes into play, as many real estate firms do so solely online, courtesy of websites and social media. Instagram is a worthwhile frontier to explore, as it is the preferred platform of Gen Z — a small surprise, perhaps, since IG dates all the way back to 2010, making it relatively ancient by social media standards.
Other marketing avenues are sites like apartments.com and rent.com, which give a potential renter access to real-time pricing and availability. Another useful tool is Google Ads, which will improve an apartment building’s ranking whenever it is the subject of a Google search.
Analytics — how a property is performing, whether it is priced correctly, etc. — have become a huge part of the business. Those with the leading technology in that area are apartment-listing services like apartments.com, rent.com, and apartmentguide.com.
Those with the leading technology in that area now are the apartment-listing services (ALS). In addition to offering property owners the ability to get better online recognition by listing their properties on their site, they also offer additional services, and I think are becoming more cutting edge in offering analytical services and lists of people currently searching for apartments in particular areas. Once people sign a lease, it will keep within the ALS database when their lease is expiring, which helps target them as prospects for a potential new lease. Such information is obviously invaluable to property owners, which is why I would highly recommend taking advantage of sites such as these.
In this wired world, technology will no doubt continue to evolve, and as it does it will impact real estate in unforeseen ways.