For rental apartments, smart tech has quickly morphed from novelty to necessity. Whether it’s smart locks, thermostats, lights, or rent-payment apps, a decisive majority of renters (82%) want at least one smart device or system in their home, a 2022 Rent.com survey revealed. The global smart apartment market is expected to grow from $3.1 billion this year to $5.3 billion in 2027, according to the Business Research Company.
“Smart technology is no longer considered nice-to-have for residents. It has now become an essential amenity that renters look for when considering property rentals,” says Rick Goldberg, vice president of sales, Arize, a smart apartment technology provider that engineers property automation solutions for multifamily communities.
RENTERS ENJOY SMART TECH, TOO
For multifamily owners, smart tech can provide a competitive edge for both retrofitted and new units, Goldberg advises. “Smart tech is incredibly marketable,” he says.
Despite the upfront costs, 95% of property managers say smart home devices can increase rental fees between 5% and 30%, according to a Parks Associates study. “Smart tech is a differentiator that adds value to a property, and it justifies the upfront capital expense,” Goldberg says.
Occupants Aren’t the Only Ones Who Benefit
Today’s renters want property technology (PropTech), but building owners benefit, too. With smart locks, for instance, operators don’t have to manage hundreds of sets of keys or fobs. And with remote access, operators no longer have to deal with lockouts since they can simply change the entry codes.
Like occupants, owners also benefit from devices such as smart smoke listeners that alert residents of triggered smoke detectors, as well as water-leak detectors that can warn of impending property disasters—before they cause costly damage.
In addition, multifamily owners and operators can leverage smart tech that’s integrated with property management platforms to streamline and automate operations. “Owners want the operational efficiencies they’ll receive when they automate their property operations, while residents want to live in apartments that feel safe and convenient,” Goldberg says.
Different Generations Prioritize Different Tech
“Preferences differ between different generational demographics,” Goldberg says.
Gen Z is most likely to value the convenience of smart home products and least likely to have a positive perception based on security features, according to a 2021 Cinch Home Services survey. Conversely, baby boomers are most likely to be impressed by security or energy-saving benefits.
“Although their priorities differ, renters of all ages value three things: convenience, safety, and security,” Goldberg says.
The survey also found that 77% of all respondents view smart homes positively. But that percentage has an inverse relationship with respondents’ age—from roughly 80% of Gen Z and millennials, to 75% of Gen X, to 69% of baby boomers.
Not All Tech Is the Right Tech
Developers and builders often struggle to invest in the smart tech their properties really need, Goldberg cautions. “They often invest in bundles and packages, only to realize those devices don’t fit the community’s needs.”
For example, if a property experiences frequent break-ins, residents will want smart locks to enhance their security and safety. If that property’s developer instead invests in a bundle of smart lighting devices, that’s not serving the needs at hand.
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Get the tech and tech provider that are right for your community, Goldberg advises. “It’s imperative to find a provider who will teach you, your staff, and your residents how to get the most out of their new devices.”
Consider the As-a-Service Approach
With the apartment-as-a-service or hardware-as-a-service model, owners pay monthly fees for smart devices and tech services. As-a-service solutions turn capital expenses into operating expenses that don’t require large upfront payments. As-a-service also can enable owners and operators to retrofit units with smart technology without paying for costly renovations.
“Smart property technology and as-a-service solutions create a win-win for both renters and developers,” Goldberg says.