Digital Curb Appeal Drives Value in BTR
Today’s Residents Have Higher Tech Expectations
By Peter A. Gudmundsson
In many industries outside of real estate, products and services evolve according to a technology adoption curve. This means that today’s luxuries become tomorrow’s must-have requirements, fast. Think air conditioning, power door locks on cars, wireless internet connectivity, or even home kitchen refrigeration as examples that started as novelties, became modern conveniences, and ultimately baseline prerequisites.
Technology deployment in the Build to Rent (“BTR”) space is experiencing that same rapid evolution from exotic early adoption to “if it is missing they must have cut corners” judgments.
BTR as a market provides two challenges that become opportunities when addressed with modern home management technology:
- The mastery of distances between units and operating processes for efficient management.
- The fast-growing convenience and efficiency expectations of today’s rental residents.
Modern property management platform systems offer so much more than just independent smart locks, thermostats, and access control. While it is true that these are the building blocks of many adoptions, leaders in BTR and other sectors properly see these tools as only the beginning.
The best lens for considering technology is to bifurcate consideration into what is best for the physical asset itself, that is to say the building and property, and what pertains to the people who live and work there. It is the unity of the physical asset and the operating processes in the context of superior resident experience that sets the best run properties apart.
Asset Protection and Control
Beginning with the hardware assets required to outfit the property, the earlier one considers technology considerations, the better. For example, smart devices like locks, thermostats, leak and noise detectors, lighting controls, and security equipment need not cost much more than their analog or “dumb” antecedents. In fact, many builders are relieved to learn that only a small incremental investment in hardware and devices over the sunk cost of incumbent hardware is required in many cases.
When chosen carefully, today’s open software can work with many different manufacturers and models. Other providers will present hardware/software combinations that are elegant in their fusion but do not “play well with others.” Since optionality is critical, prudent builders will choose open software that will still be relevant when new hardware or software is acquired.
Efficient Operations, Risk Mitigation, and Enhanced Revenue
Managing and marketing BTR units can be labor and cost intensive. Centralized visibility and control at the unit level can save innumerable hours of work when it comes to managing a BTR property or property group. When all hardware is connected to a unified management system or dashboard, maintenance personnel, for example, can prioritize their routes and tasks based on real time activity rather than spot checking statuses of disparate systems throughout the development. On the marketing side, self-guided tour technology allows leasing personnel to focus on demand generation and lease closings rather than repetitive showings to prospective tenants who may only be kicking tires.
Leaks are risk events that should be mitigated; not remediated. For as little as five dollars, a connected system inclusive of leak detectors alerts maintenance at the leak’s inception, helping to avoid water damage or mold. Regulations and common sense drive the deployment of smoke and heat detectors, but water, a greater risk than fire, should also be part of a mitigation plan. Some insurance underwriters will even offer financial incentives for integrated detection systems.
Finally, the use of a modern property management platform solution allows the manager to not just save money through efficient operations but also generate incremental revenue through the assessment of a technology access fee to current and future renters. At all price levels, renters will not object to $25 to $50 of incremental monthly fees if they believe they enjoy state of the art technology access.
Renter Experience and Expectations
To state it bluntly, renters will judge your property if it lacks modern technology for access, security, energy, convenience, and insight. Remember, these are people with modern technology in their pockets, on their wrist, and in their cars. They will judge a new or old property as deficient if the technology base is not current.
Think about how you react when you stay at a hotel where the WiFi connection is spotty or weak. Most make sweeping judgments that if the connectivity is poor, one must wonder what else is substandard. Residential property brands and locations are equally vulnerable to the expectations of today’s renters.
A savvy renter wants to know that they will be able to moderate their energy usage from day one. They will want to turn on lights or grant access from far away or know if the noise level of their party is too loud before it triggers a visit from local law enforcement. A property that features up-to-date technology will offer “digital curb appeal” complementary to the additional investments made in landscaping and a friendly, professional leasing team.
Marketing data shows that most renters seek community when choosing a home to rent. Community is an intangible concept, but most know it when they see it, and all agree that it begins with communication. This is why a property management platform needs to offer built-in communication that ties together the management of assets and processes. Has the gym access code changed? Will Taco Tuesday still occur at the pool if it rains? Will scheduled roof maintenance be moved to next week? Is the electric vehicle charging station available? These and more are the types of questions that residents need to be answered in real-time.
Today’s residents have higher expectations for their rental residence, whether it is a studio apartment or single-family home. No longer will fresh paint and billboards suffice when it comes to attracting and retaining high quality residents. A well-run and technology enabled rental community will drive revenue, conserve costs, and provide the resident experience that will set your property apart.
Whether a BTR investor intends to own and operate for the long haul or sell to another entity, a foundational investment in a modern property management platform will drive high value for the investor and superior satisfaction for the resident.
