Smart Apartment

Smart Apartments Make Financial Sense

The smart home market is growing rapidly. With an estimated 50-200 billion connected devices in the wild by 2020, the future of “home” is coming faster than expected. Safe to say, homeowners have embraced the new technology: in a recent survey, over half of Americans said they already owned smart home technology or planned to invest in it in 2016. But there are millions of Americans who live in multi-family housing, who do not own their homes, and depend on their property management to implement new technology.

The implementation of smart apartments has a slower path to the mainstream than smart homes. Property managers are understandably hesitant to undertake projects when the future is unclear. However, there are many benefits of connected multi-family housing, for property owners and for residents. And the truth is, every home and apartment in America is going to be connected at some point — the future is coming, whether you’re ready or not! It’s time to start preparing, whether that means laying down more wiring, incorporating smart tech into vacant apartments, or working towards a goal of fully connected multi-family housing.

Benefits for apartment managers and owners

Perhaps the most obvious benefit of smart technology is for managing vacant apartments. At any given time, a company could have thousands of vacant apartments. In a traditional apartment, if someone comes in to do maintenance and accidentally leaves the heat and lights on, it could be days — or weeks — until it’s noticed and turned off. This is not a rare occurrence, and simple errors like this often end up costing thousands of dollars. Many property managers are seeing the potential of smart tech to eliminate problems like this completely: if the lighting, thermostat, and door locks in a vacant are all connected, managers can easily check to see if vacant apartments are locked down, and turn everything off without leaving their office.  Flooding is another area where smart tech can save thousands of dollars. Sensors can be installed in all units that detect when water is present and send a notice to the PM whether the unit is vacant or not.

Managers of multi-family housing say the biggest benefit of smart apartments, for them, is the streamlining of operations. While there’s a secondary benefit for renters, the smart apartments’ true value is in automating processes that are necessary but inefficient aspects of the job.

For example, take smart locks. Normally, when someone moves out, the manager has the locks changed, which costs anywhere from $50-$100. If the building has a lot of turnover, that adds up quickly. With smart locks, the manager can simply change the code so that the previous tenant no longer has access. While the upfront cost is higher than a traditional lock, over time the savings will build up, and so will time saved by employees on the clock.

Another way that smart technology can automate operations is in conservation efforts and building code adherence. As climate change becomes harder to ignore, local governments are passing new ordinances aimed at reducing some of the damage of global warming and inefficient energy usage. For example, many cities are requiring lighting in common areas to automatically turn off after a certain amount of time. While we have no way of knowing what’s coming in terms of new laws and codes, we do know that a connected building will have a huge advantage in meeting those codes. The infrastructure will be in place already, and so meeting new laws will just take a minor tweak of the system, or, in the ideal case, the building will already meet the new codes.

After all, take the example of auto-lighting. Regardless of whether it’s required in your city, implementing it anyway will save the building a ton of money on utility bills — and it will help the environment, if you care about that sort of thing. For some people that’s reason enough to start building automated, smart housing: it is a powerful weapon in our war on climate change. I don’t know about you, but I’m all for saving money while also helping out our planet.

An additional benefit to smart multi-family housing is data collection. Most smart-hubs allow for anonymized data collection, so that managers can see the aggregate of data (without seeing which apartment the data is attached to, for privacy reasons). Even though it’s anonymized, it’s still useful. For example, managers can monitor hot water usage in the building. If there’s a consistent time of day when hot water usage is low, the manager could opt to turn-off one of the water heaters for a few hours at a time (automatically, of course), to save on utility expenses, and to reduce wear and tear on the system.

Benefits for residents

For residents, the benefits are simple: increased security with smart lock technology, reduced utility bills due to automated HVAC and lighting systems, and — a big one — accessibility. For those with disabilities, automated systems can drastically improve their quality of life. In particular, voice automation, which will soon be ubiquitous in smart housing, will open up opportunities for many people, and will streamline the lives of the rest.

When asked about what makes a home “smart” in a survey by Coldwell Banker, 63% said security (locks and alarms), 63% said thermostats and fans, 58% said lighting, and 56% said safety (fire and carbon monoxide detectors).

A large chunk of the rental market is young and tech-savvy, and that chunk will continue to grow. As of now, 55% of renters in the U.S. are Gen X and Millennials, who grew up with the internet as part of their daily lives. That percentage will only get bigger as more millennials graduate college, and as the next, even more tech-savvy generation (those born after the year 2000) enters the workforce. 74% of millennials believe that technology makes their lives easier. 72% of millennials said they would pay $1500 more to make their home smart, a pretty astounding number. So, smart housing is the future. And property managers better prepare, because the future is coming at an accelerated rate.

Conclusion

While implementing smart technology throughout multi-family housing is a big undertaking, it’s inevitable. This is not a fad, this is technology that will change how we live. The key is going to be distinguishing the fads from the future, and preparing in a way that “future-proofs” your property, so to speak. Many property management companies, while taking a wait-and-see approach on connected, centralized systems, have already prepared for the next wave by laying additional wiring throughout their buildings to accommodate the oncoming flood of connected devices. While WiFi works fine now, it’s already getting overloaded, and experts say that soon we will need a new solution, especially for smart housing. Many companies have identified laying down fiber wiring as their next step in future-proofing. Fiber is faster and more robust than traditional copper wiring, and it will work with the next wave of technology.

For many, the main concern is upfront cost: implementing new technology can be expensive. And the return on investment is not always direct, or clearly evident. But investing in the future — and in an increasingly tech-savvy market — is always a good idea, especially in this day and age when things move so fast.