Multifamily Residences Turn to Tech for Tenant Appeal, Efficiency
Fast, secure, reliable connectivity is now an expectation at multifamily residences, according to a report released Monday by market research and consulting company Parks Associates and Xfinity Communities.
Residents need access to high-speed internet services to work, attend class, and stream video and games, among other high-bandwidth activities, it explained, while properties need connectivity solutions that help them better manage operations, bring down costs, and reduce risk in an age of skyrocketing insurance costs.
“By embracing connectivity, IoT, and wireless technologies, property owners can not only improve their operational efficiency and cost-effectiveness but also enhance tenant satisfaction and retention, ultimately leading to increased profitability and long-term asset value,” Jeff Barney, president of TP-Link Systems, a global provider of networking devices and accessories, headquartered in Irvine, Calif., told TechNewsWorld.
“Property owners can generate revenue by providing IoT and property-wide Wi-Fi services to the tenant,” he added.
Many multifamily properties are looking at different ways to deploy and adopt connectivity technologies, noted Parks analyst Kristen Hanich, but they’re also carefully considering the financial results they can expect by rolling them out.
“They want to know what the return on investment [ROI] will be on operations,” she told TechNewsWorld, “and if they’re a short-term kind of investment company, how much will be added to a property’s value by rolling out some of these technologies.”
Gaining Competitive Edge
The multifamily real estate market is embracing connectivity and IoT to enhance tenant experiences and attract tech-savvy renters, explained Mark N. Vena, president and principal analyst at SmartTech Research in Las Vegas.
“Smart building technologies like automated lighting, temperature control, and security systems improve operational efficiency and lower maintenance costs for property managers,” he told TechNewsWorld. “Additionally, connected devices enable better energy management, reducing utility expenses and promoting sustainability.”
“As tenants increasingly expect seamless connectivity and smart living solutions, properties offering these amenities gain a competitive edge in the market,” he added.
Hanich explained that many new properties under construction for the last few years are about to hit the market. “When they do, we expect that a lot of existing properties are going to have to compete more tightly for renters and residents,” she said. “So we expect that a lot of existing properties, older properties, are going to look at what amenities they can offer folks and see what they can do when it comes to some of these connected solutions.”
However, according to the Parks report, a lack of suitable pre-existing networking infrastructure is a top barrier holding multiple dwelling units (MDUs) back from widely deploying IoT.
Many existing properties were created without suitable wiring or the infrastructure to run new wiring, it continued. Additionally, many properties do not own the wiring infrastructure, making new connectivity deployments costly or not feasible. As a result, older properties are far less likely to offer smart amenities and have worse experiences with their existing infrastructure.
Parks researchers found that 82% of properties 10 years old or older that offer Wi-Fi have difficulty maintaining device connections on the network compared with just 13% of newer properties.
Internet Must Be Available Immediately
Poor connections have been a chronic problem due to wireless environments becoming increasingly crowded and wireless devices proliferating, Barney noted, but the introduction of Wi-Fi 7 promises to address those problems with more stable connections.
In addition, multi-gig Ethernet is becoming available. “With multi-gig Ethernet, more and more bands are becoming available and are being deployed to the properties to help people get connected,” Barney said.
Infrastructure woes aren’t the only challenges facing tech in the multifamily residential market. “There’s a lack of understanding about what these technologies can and cannot do, and a lack of skills on how to set them up so they perform as intended and provide a better return on investment,” Rob Enderle, president and principal analyst with the Enderle Group, an advisory services firm in Bend, Ore. told TechNewsWorld.
The Parks report maintained that connectivity services must connect residents to experiences they care about: entertainment, work, safety, and smart living.
Furthermore, it must be ready at move-in, it added. According to Parks’ research, the majority of MDU residents say having internet ready to go immediately after moving in is “very important” in their next home. That ranks third among 16 amenities rated by consumers in the research, just after good insulation, soundproofing, and low-cost internet.
Parks also noted that more and more MDU residents are using smart home tech acquired themselves and from their properties. It explained that 22% of apartment renters and 58% of condo owners use smart home devices today, and these residents need modern networking services to support them.
In fact, it added, many properties are offering smart home devices as a differentiator to attract and retain residents — a differentiator that appears to be popular, as 79% of MDU dwellers with property-provided smart home devices and services are satisfied with them.
Curbing Insurance Costs
Connected technology can impact another concern in the multifamily residence market: insurance. Citing information from TBM Multifamily, an insurance and risk management firm, Parks noted premiums have soared 10% to 40% for multifamily property owners.
The report explained that properties are seeing the benefits of deploying risk-mitigation technology solutions to reduce the damages caused by catastrophic events such as leaks and floods, which damage multiple units. These solutions are not typically resident-facing but have a strong ROI when implemented on a large scale through reductions in insurance rate increases and preventing small leaks from becoming large incidents.
There is a growing trend towards insurance discounts for properties with connected solutions, such as water leak detectors. However, Parks acknowledged that this is still at an early stage, and properties may need to negotiate rates or change providers to see the full benefits.
“Without question, connectivity and IoT in the multifamily market offer significant benefits by enhancing tenant satisfaction, streamlining property management, and improving operational efficiency,” Vena said.
“These technologies also contribute to sustainability efforts through better energy management and resource optimization. As smart living becomes more prevalent, embracing connectivity and IoT can help properties stay competitive and future-proof their offerings.”
