By Joe Bousquin (MultiFamilyExecutive.com Article) —
With all the focus on smart home technology in apartments today, owners of existing properties can feel left out in the cold when it comes to competing with newly built communities.
But don’t fret. The reality is, given the blistering pace at which smart home technology has been adopted in the apartment industry, owners of existing properties may actually have a leg up right now on the new build opening up down the street.
Why? Due to development timelines, many new builds today simply didn’t have smart home tech written into their pro formas in the planning stages.
“Oddly enough, many newer communities that were delivered within the last three years lack smart home features because that technology was really in its nascent stages when those projects were being designed,” says Greg Curci, vice president of multifamily operations at King of Prussia, Pa.-based Morgan Properties, which counts over 75,000 units in its portfolio. “It’s created an opportunity for us to offer a feature in our existing properties with smart home tech that is current and in demand, but that a lot of new communities surprisingly lack.”
Lucas Haldeman, CEO of Scottsdale, Ariz.-based smart apartment tech integrator SmartRent, sees that same disconnect in newly built developments across the country. “The bottom line is most new construction, shockingly, is not putting in smart devices by default,” Haldeman says. “So if an owner of an existing property has new construction moving in down the street, retrofitting with smart home tech can still be an easy differentiator.”
It was for Morgan Properties. Curci points to the firm’s Abrams Run Apartments, a garden-style community in King of Prussia built in the 1990s. “It’s now surrounded by thousands of units of new construction,” Curci says. “By adding smart home features, we’re able to offer residents amenities that aren’t available at communities built as recently as last year.”
Specifically, that means smart locks that give residents remote access to their units, smart thermostats that cut down on residents’ energy costs, and smart outlets and switches that allow for voice or app-controlled lights and other electronic devices.
“That’s part of the value proposition for a group like Morgan Properties right now,” Curci says. “We don’t do any new construction. So we feel we’re differentiating ourselves at this point by installing these devices in these homes.”
Perhaps the best part? Since returns on retrofitted smart home technology can be as high as 30%, owners of existing properties can triple the typical 10% returns that come from most capital improvements.
Here are five steps owners of existing properties can take to level the playing field, or even tilt it to their advantage, when it comes to retrofitting smart home tech into their buildings.
1. Core Strengthening
Experienced multifamily pros consistently stress the importance of ensuring a building’s existing network and wiring are fast enough to provide the quick connectivity residents want. But they also have to be robust enough to carry the extra load of all the new devices you’re connecting to it.
Working with a smart home tech integrator can help. But, depending on the age of the building, you also want to gauge the electrical wiring inside the walls. “The No. 1 issue is going to be getting your arms around an older electrical system,” says Curci. “If you’re fortunate, you’ll find that you have common wires for the thermostats and neutral wires for light switches, but that’s not always the case in older buildings.”
If you need to upgrade inside the walls, use the increased return on smart home tech as a buffer to make those improvements now.
2. Start Right at the Apartment Door
Just as the building’s connected core needs to be the foundation for the smart home tech amenities you add to your building, those amenities need a core foundation themselves. For many operators in the multifamily industry today, that core is a smart lock on the apartment door. So, if you’re going to make just one smart home tech addition to your existing building, go with locks first.
“Smart locks breathe new life into older apartment buildings and level the playing field for owners who are located in markets with lots of new construction,” says Colin Wiel, chairman, co-founder, and chief technical officer at Oakland, Calif.-based Mynd Property Management, which operates 8,000 units nationally. “With prices ranging from $200 to $300, the affordability of a smart lock further broadens its appeal to older building owners.”
3. Layer in Thermostats and Lighting
Beyond locks, smart thermostats, lights, and outlets inside apartments can provide a differentiator for residents, while presenting the very real advantage of saving them money on their electric bills—a great selling point when you’re trying to compete with newly built, energy-efficient properties.
“You want to consider anything with a wow factor,” Haldeman says. “You don’t have to go crazy to make your units stand out. A couple of light switches, a plug control, access control, and a thermostat can make older units feel totally modern and brand new.”
4. Consider a Concierge App
Once you’ve got smart electronic access at your building, you can leverage it to provide residents extra pampering in the terms of concierge service through an app, without the price tag of hiring a living, breathing human being to work on site.
“Concierge apps are becoming increasingly popular and come at a reasonable cost to the property based on the services and value provided,” says Dana Caudell, president of property management for the Wellington, Fla.-based Bainbridge Cos., a top 10 developer of apartments nationally.
For example, in lieu of actual package lockers, Bainbridge is looking at a new technology vendor that integrates with a concierge app to act as the central warehouse for resident packages, and then allows residents to set a time for the package to be delivered when they’re at home. “It’s not only more convenient for the resident, it also saves our team a lot of time,” Caudell says.
5. Give Residents Plenty of Heads-Up
Just because you’re going high tech at your existing building doesn’t mean you can forget the basics of property management. Make sure installing your tech improvements causes as little inconvenience as possible to your residents. Pointing out the advantages they’ll gain from the retrofit helps.
“It’s important to communicate well in advance the new upgrades that are going to be installed in their unit,” Curci says. “You want to emphasize the benefits of the new amenity and give a clear sense of timing. Then, along with our smart home provider, we give training and instruction on how to get the most out of their new smart home.”
By taking the right steps to install the smart home tech residents want today, owners of existing buildings can get a leg up on the new development being built down the street.