Monetizing the new tech reality in multifamily housing even if it was not by choice for apartment operators who scrambled to implement it.
By Morgan Dzak
Multifamily housing has been propelled into a new era of leasing – and not by choice. Apartment operators had to implement new technologies out of necessity during the pandemic. But in the mad scramble to implement new tech, operators didn’t have adequate time to consider the long-term ROI.
Now that the dust has settled from the early days of the pandemic, operators have taken a step back to rethink their tech stacks and identify opportunities for monetization. Monetizing tech, like community-wide WiFi, smart-home technology and even AI, drives revenue growth, increases asset value and saves operators money.
Here are some ways operators have made that happen, and the opportunities that still exist:
WiFi: The modern tech stack foundation
Community-wide WiFi is the modern tech stack foundation. It’s not only a feature that residents expect, but it powers other amenities such as smart-home tech, supports new leasing strategies, and enhances day-to-day operations onsite.
“Operators used to think connectivity was the responsibility of the resident,” said Shawn Mahoney, senior advisor at RET Ventures. “Ubiquitous WiFi is not only good for residents, but it’s even better for the operator. It’s the basis of modern leasing, maintenance, operations and the overall resident experience, and the enabling technology that lets operators and onsite teams try all types of strategies they probably haven’t considered before. Once you have true community connectivity, it’s difficult to imagine how you got by for so long without it.”
Residents will pay for a service like WiFi on their own, but it’s not just a lifestyle-enhancing amenity anymore – it’s a requirement. Apartment communities that offer WiFi as part of the living experience can better accommodate the modern renter lifestyle and support their needs, whether it’s for work or play.
Operators are seizing revenue-sharing opportunities offered by suppliers. Typically, supplier partners and operators agree upon a per-door fee, or operators receive a monthly percentage of revenue. Some operators have opted to make a bulk purchase of – for example, $50 a month per door – then remarket and sell it to residents at a premium.
“There’s a lot of education that still needs to happen in the industry, and that’s one of the biggest challenges that has hindered some operators from taking that step,” Mahoney said. “Once operators realize they can charge for various tech amenities and ubiquitous WiFi, and see the results in their NOI, they won’t just take a step – they will sprint towards the opportunity.”
Community-wide WiFi also offers the benefit of roaming around a community without hitting any “dead zones” – areas commonly found in apartment communities where cell service can’t reach. This capability is essential to new self-guided tours, which require a connection without any interruptions. Reliable connectivity supports every step of a self-guided tour, from initial community access to navigating the community and the capability to contact the leasing team.
“Leasing teams can let a prospect on a self-guided tour into a community with remote access,” Mahoney said. “The prospect can tour the entire community and have a connection. The WiFi is a really big part of self-guided tours, from how prospects enter a community, to the entire tour experience. They’re checking photos, videos, floor plans and even maps during their tour, and if there’s a connection issue, that prospect is going to have some challenges during the tour. It impacts the entire experience and inevitably, lease conversion.”
WiFi enables self-guided tours, and if operators have community-wide WiFi in place, they can not only create a more efficient self-guided tour, but they can support a higher volume of tours. The better the experience, the more likely a prospective renter will sign a lease. The connectivity piece of a self-guided tour is crucial, and if operators can create better leasing experiences for prospects, they will see the results in the lease-conversion rates.
“WiFi is integral to the new tour types being offered,” said Andrew Kusminsky, CEO of GiGstreem, a ubiquitous WiFi provider. “The modern touring experience all comes back to the customer experience. Operators across the country are trying to create better experiences for renters because they see how it impacts the bottom line. The new leasing technologies definitely create better experiences for renters, but without WiFi, they’re not going to operate smoothly.”
Time is money
Operators have heard the term “The Great Resignation,” and they’ve seen firsthand how it’s affecting multifamily, notably in leasing and maintenance roles. With thinner onsite teams, operators are now seeing time as currency.
While self-guided touring has been revolutionary for the industry, so have other technologies like AI, automation and mobile maintenance. While these technologies aren’t necessarily being monetized like ubiquitous WiFi, time is currency, and the time savings from these technologies also affects the bottom line.
The maintenance process has evolved with technology, and maintenance teams are now receiving and completing work orders via a maintenance app on their phones, which streamlines the entire process.
“Work orders used to be sent to onsite staff in the office who would then page a maintenance technician to get the key, gather supplies and then go to the unit,” Mahoney said. “That process creates a lot of extra time when maintenance teams are not receiving work orders directly from residents. With mobile maintenance, technicians can receive the work order directly, respond faster and complete a higher volume of requests in the same amount of time. And they also need WiFi for this, so the operator’s WiFi investment isn’t just being monetized, but it’s also saving time in the maintenance process.”
AI chatbots and automation technologies also save time for onsite teams while presenting revenue opportunities. Most renters who look at apartments tend to ask the same questions about apartment-specific details, pet and parking policies, or when the pool or fitness center is open. For the most part, a bot can answer those questions, or they can be published on the website. These technologies provide renters with enough information to make a decision while reducing the lead burden on onsite teams, which keeps payroll costs in check.
“I would say for anyone who is a long-term holder of real estate, it’s very important that they’re looking at this stuff because the payback is fast,” Mahoney said. “The upfront cost may be daunting, but the value you get from it is tremendous and will certainly offset the cost. It’s really a no-brainer from both the operations side as well as the investment side.”
While these strategies aren’t necessarily monetizing tech, they’re still increasing net operating income (NOI) and adding to asset value. Some of the greatest NOI opportunities are expense reductions and on the payroll side. Communities are already working with thinner onsite teams, but technology allows current teams to do more with less.
“You can spread the same number of leasing associates out across more communities because the tech is really filling some of the gaps and streamlining many onsite processes,” Mahoney said. “Centralized leasing is a hot topic in multifamily and more operators are seeing the value in it from a resident perspective and also from a revenue standpoint.”
The industry will continue to evolve with new technologies and software integrations, and they will set the stage for how communities operate and make money. Overall, tech plays a central role in resident satisfaction – arguably the largest revenue-generator. As apartment companies continue to deploy technology into leasing and operations, there will be more opportunities to monetize that tech or save money from the efficiencies it creates and the long-term residents it attracts.
Morgan Dzak is an account manager for LinnellTaylor Marketing, which focuses exclusively on the multifamily industry and its technology space. She previously spent time as a digital content and marketing specialist for Cornerstone Apartment Services in Denver.