October 14, 2019

The Hidden Costs of Smart Access

Overview

When owners and developers of multifamily properties began to evaluate smart access solutions, they found themselves faced with multiple system providers to choose from. In order to provide their residents and building operators with a simpler and more secure way to open, manage, and share their spaces, they needed to find a supplier that specialized in common areas, like the front door and gym access, and a separate supplier who could install devices on unit-entry doors. Often, they even needed a third provider to develop the back-end software that linked these various access points together, or have each resident use a separate fob for the entry and key for their unit in their building.

The result? By the time the installation was finished, they had been bogged down with line items that weren’t apparent at the start of their evaluation process—an all-too-common occurrence when selecting solutions that aren’t full-building solutions.

At Latch, we’ve designed a fully integrated access platform that reduces the need for multiple vendors at the start, and lowers capital expenditures and operating expenses over time. Here, we highlight some of the most common hidden fees and how to identify them—from the front door all the way to the cloud—and explain why Latch is priced differently.

Hidden cost #1: Control panels and hubs

Many common entry solutions, which provide buildings with readers that sit adjacent to doorways on an interior wall or next to the front door on an exterior wall, require control panels for roughly every four to five readers. Then there are unit entry locks, each of which require a hub or router to register the user’s access credentials each time they try to unlock their door. These hubs and control panels can incur enormous construction and labor costs to install, disrupting existing walls and infrastructure and requiring owners to consider complex wire cabling, network switches, and ongoing maintenance. All of this impacts both capital budgets and NOI.  

Beyond installation, panels and hubs incur cost due to the fact that they require building-wide internet connectivity, without which users’ unlock requests are not processed. This can prove problematic in the event of a power or system outage—and owners should ensure that if the building loses internet, a resident will still be able to use their fob to enter the building or a key to access their unit.

Finally, there are the costs associated with vendors. Because control panels and readers require software in order to communicate with one another, developers often need to identify (and pay for) an additional vendor who can oversee this portion of the project—and consider the cost of ongoing maintenance.

Hidden cost #2: Servers  

To facilitate the transfer of user data permissions to the control panel and reader, owners of Class A buildings will either need to install on-premise or cloud-based servers.    

On-premise servers are located within the physical confines of the property, giving building staff physical access to user data and making it easier to directly control that data’s configuration, management, and security. However, on-premise servers are almost always more expensive in the short-term, requiring a large upfront capital investment for hardware and installation. As technology becomes outdated, this can result in having to replace servers every three to five years (similar to the way we replace our laptops every few years). Longer term, they also require sourcing an IT specialist for ongoing server and network support and maintenance.  Automatic and unexpected server operating system updates can become incompatible with older server access control software versions, causing system downtime that requires a specialist to come onsite to fix.

Cloud-based servers are quicker to get up and running. While they’re fully automated, requiring less maintenance and scaling across multiple properties more easily, they’re often dependent on third-party security measures like firewalls (which may not always meet the highest standards).

Hidden cost #3: Middleware  

Oftentimes, smart access solutions require middleware platforms to function most efficiently—especially when smart home devices are involved. This middleware, also known as the technology layer that’s deployed to help devices and platforms communicate with each other more intelligently, comes with its own set of costs.  Although they might initially seem more attractive on a balance sheet when compared to access solutions that don't include connected devices as part of their offering, middleware often ends up being more expensive in the long-term due to a host of unpredictable and uncertain risks.

A key uncertainty that can surface revolves around data security practices of middleware providers—and can cost owners when residents become aware that their privacy and security are at risk. Too often, resident data is shared with landlords and property managers, or sold to third parties for the purposes of advertising and marketing—exposing residents in the very places they’re supposed to feel the safest, and increasing liability for building operators. As a result, owners can lose tenants due to breach of trust instead of gaining the efficiencies they were hoping for, like reduced turnover.    

There are also many reliability risks, especially when it comes to warranty management. When working with multiple vendors, it’s not always clear who to call when an issue arises. Obsolescence risk runs high when warranty periods across hardware and software systems vary, as do vendors’ commitments to maintain or release upgrades throughout the life of the contract, or if security vulnerabilities occur. Because most middleware companies build neither hardware products nor the embedded software on those products—and instead just integrate a number of different devices and solutions—they are not responsible for keeping those devices and solutions upgraded. As a result, owners often find themselves needing to replace these systems every four to five years as the technology becomes obsolete.  

The solution: a fully integrated hardware and software solution  

Latch helps to mitigate both the headaches and unexpected expenses that can accompany smarter access. The first full-building access solution to seamlessly integrate hardware, software, and services, it has been designed to provide residents and property managers with unprecedented flexibility, convenience, and security—and has been priced to be as simple and straightforward as possible.

With Latch, you’ll only pay for hardware and software and can say goodbye to costly infrastructure, wiring for unit entry devices or panels—all of which make the installation of smart access solutions more time-consuming as well.

Here’s what else you’ll find.

No hubs, no panels

Our unit-entry devices, the Latch M and Latch C, have been designed to facilitate access without any need for additional hubs, lowering infrastructure costs and increasing data security. The Latch R, our reader for the front door and common spaces like the gym and garage, features a built-in control panel in addition to connecting to existing panel infrastructure—allowing it to stand alone.

By building our software into our hardware, we have also replaced any need for on-premise servers or additional cloud-based servers to enable smart access. Additionally, we’re constantly developing and deploying software and firmware updates to make sure our products are always up-to-date—eliminating the need for owners to purchase new devices every few years.

No required electrical, Internet, or WiFi for unity entry devices

With an offline-first design, our unit entry devices don’t require a persistent Internet connection to lock or unlock—reducing project costs during construction and installation, and reducing the risk of residents’ data exposure. They’re also battery operated, eliminating the need for any wiring.

No middleware necessary

Unlike many access solutions that depend on middleware to function effectively, Latch makes it possible to future-proof your property without introducing additional technology layers (and vendors). When we do integrate, we only partner with device makers and software platforms that connect seamlessly with our existing solutions. The result: the simplest, most cost effective, and most secure centralized experience.

Choose the best option for you, but ask the right questions

Multi-family owners and developers have many options to choose from when it comes to selecting a smart access solution. Here are a few questions to ask:

  • What costs are being incurred by hubs, panels, wiring, and Internet?
  • Have line items been grouped together by an installer or distributor? (Look for labor and materials, installation costs, software, and taxes.)
  • Have miscellaneous costs been added, including mounting hardware, wire cabling, power supplies, or network switches?
  • What unforeseen costs could impact capital expenditures, development costs, or net operating income?

At Latch, we’re committed to providing as much transparency around our pricing as possible. What you see is what you get—which is a smarter way to open, manage, and share the spaces that matter, and bring possibility home.