In today's multifamily industry, exciting new technologies offer the opportunity to revolutionize operations and customer experiences. The universe of solutions and suppliers keeps growing, and it's getting harder for operators to keep up with the pace of change and choose the right technologies at the right time for the unique conditions of their properties.
When operators think about new technology projects, they don't always complete the step of estimating the returns that the new solution will deliver. We are ultimately in the multifamily industry to make money, and it's certainly the case that some technologies offer a greater bang for the buck than others. At Latch, we have been thinking of ways to help our customers think about the financial impact of smart building technology.
Our work with an ever-growing customer base has taught us a couple of things about the way that owners and operators think about ROI. First, the range of benefits that a technology like smart access offers is unusually broad, with cost efficiencies and improved customer experience improving both the cost and revenue sides of the ledger. As a result, several divergent views have emerged on how smart communities achieve ROI, which we will outline below.
Smart access control improves the resident experience, enabling the technology-driven lifestyles of increasingly digitally native residents. When the resident gets to control building access via an app, rather than coordinating the handling of keys, it becomes far easier to schedule services (think dog-walking, cleaning, babysitting) and package delivery, as well as managing guest access.
The technology is a powerful amenity that increases the appeal and the stickiness of the community that implements it and adds tangible value to the living experience. When an amenity is as desirable as this one, we should expect a resident to pay a premium for it. A community with smart access, for example, should be achieving higher rents than an otherwise similar neighboring property that still uses keys.
Keys are a drag on multifamily productivity. Historically, every move-in and move-out costs time and money as the community has to process keys. Every day site team members have to make unnecessary trips to and from units to open doors and collect keys. Lock-out situations, guest access, and package handling all cost time and money for properties still handling access the old-fashioned way.
These inefficiencies are well worth removing from property operations, and we know that the efficiency gains are a big motivator to companies choosing to enable their buildings with IoT technology. If we could convert the hours that site teams waste each week handling keys into more lead follow-up, more lease renewal outreach and more maintenance tickets addressed, the efficiency gains would accrue.
While the efficiency gains described above put more hours back into site teams' weeks, technologies like smart access enable operators to make more radical changes to their operating models. Keyless entry is foundational to the increasingly popular self-service leasing model, which in turn can provide operators with the opportunity to centralize some of their leasing functions.
While access is only one of the steps in creating a different staffing model, it is arguably the most foundational. The financial benefits of changing site team structure are obvious, but in today's challenging talent environment, operators should not overlook the improvements to associate experience. Focusing leasing agents' time on closing leases (rather than touring) creates a better job with a better career progression.
Above, we described the way that smart access improves resident experiences. Some operators find the way that the technology enhances marketing and leasing to be an even bigger benefit. Tours that showcase beautiful, simple access control tend to be more successful than tours that start with a lockbox, for example.
Beyond the tour experience, the reputational benefit of the technology can be a force multiplier for marketers. As reputation scores have grown in importance to multifamily marketers, they have amplified current residents' digital "word of mouth." A great tech-enabled tour and living experience burnishes the reputation of the community and ultimately improves marketing performance.
Experience has taught us that operators tend to use at least one of the above benefits to estimate ROI and ultimately plan and execute their smart building projects. We recently published a set of four examples of how communities can characterize the benefits and the costs and understand the payback on the technology investments. Take a look, and see how this exciting technology can change your communities' financial performance.
Smart building technology delivers a wide range of financial benefits for multifamily owners and operators. From cost efficiencies to improved customer experience, a strategic investment in the right technology solution can positively impact both the cost and revenue sides of the ledger.
There are several different ways to estimate how smart communities achieve ROI. Learn more about the four most popular approaches in our easy-to-read guides.