Over the past few years, we’ve seen an increased demand for smart home technology as consumers continue to embrace a digital lifestyle.
“Smart home technology, whether it be keyless entry locks, smart thermostats or leak sensors, these are all things that, five or six years ago, were still pretty new to the marketplace,” said Andre Sanchez, COO of Rently, a smart home and self-guided touring solutions provider. “Now, however, renters actually expect to see this technology in their living spaces.”
The call for smart home technology is coming from inside the house, as it were — but during times of economic pressure, how can investors and property managers justify the effort and expense of upgrading their communities?
Why smart home technology now?
Interest rates are at their highest level in 20 years, and housing inventory is only at about a quarter of what it was in 2008, according to National Association of Realtors Chief Economist Lawrence Yun. More people are renting but still seeking the premier amenities enjoyed by homeowners.
“We are heading into a more turbulent environment in the coming years, and it’s very important that investors and property managers assess their needs,” Rently CEO Merrick Lackner said. “It may seem counterintuitive in this climate to invest, however, there are many economically sound reasons to deploy smart home technology now.”
As an example, Lackner pointed to current staffing shortages leaving leasing offices with fewer people on staff to conduct tours for prospective renters. Self-showing technology like Rently’s can help make up for those losses in productivity.
“Whereas a leasing agent might find it hard to find the time to show properties every day, our technology is essentially allowing somebody to tour any day without being limited by the agent’s schedule,” Lackner said. “It’s a much more cost-efficient way to show properties when we’re in a recession. When you don’t have the headcount to facilitate traditional agent showings, self-showing is a wonderful tool that can keep your leasing goals on pace.”
In addition to enabling a greater number of tours, self-showing technology also maximizes an existing staff’s efficiency and output, he said.
Sanchez added that smart home technology also enhances an operator’s ability to monitor and protect a vacant property.
“With economic conditions being what they are, we hear about more incidents in the field where there’s potential for property breaches and things like that,” Sanchez said. “With smart home technology, you can see if there’s been activity at the property, especially during a vacancy period – have lights been turned on, have thermostats been turned on, have locks been unlocked? – and that really helps an operator maintain a higher level of security.”’
Lackner said he believes the current economic environment will ultimately increase the use of smart home technology.
“It allows owners and operators to maintain their properties better, to be more efficient in their leasing operation, to save money on utilities and to protect their assets,” he said. “In a more turbulent environment, you need to be taking these efficiency and automation steps to be able to reduce costs and keep your portfolio operating at the same caliber. So, I think economic pressure will actually be a catalyst for more smart technology deployments.”
How does smart home technology benefit investors?
Lackner described two groups of investors in rental properties – groups that directly own and manage their properties, and groups that manage properties on behalf of others. He said both of these groups are motivated not only by the benefits listed above but by the ability for smart home technology to differentiate their properties on the market.
“In this environment, it’s much, much harder if you want to sell an asset to do so unless there’s something more compelling and differentiated,” he said. “It’s the homes that are better maintained, better painted, have better technology – those actually end up, in a difficult market, having more value for resale or long-term investment.”
Ultimately, Sanchez said that smart home features maximize real estate values both operationally and as investments.
“Number one, it’s easy for your management company to deploy the technology; they’re not just spending money on a platform and not utilizing it,” he said. “Number two, the popularity of the tech helps them lease faster, making sure there’s not a vacant unit that’s sitting on the market, not generating revenue. And third, smart home technology also helps keep that resident and satisfied and less eager to move, stabilizing revenue streams.”
If the renter has a better experience by renting a property that’s equipped with smart home technology, the renter will ultimately be happier and stay longer, reducing churn loss, he said.
“Retaining residents ensures that operators maximize their investments,” Sanchez said.
Rently’s Smart Home Technology
Rently’s self-guided touring streamlines leasing by automating property showings, and its smart home technology helps property managers fulfill key operational tasks including property access, energy management, property security, and damage prevention.
Because Rently follows an open and flexible product integration approach, all of their solutions can be easily integrated with most popular property management systems, eliminating technical frictions that sometimes occur when properties change ownership – something that happens more often in turbulent economic times
Rently’s newest product innovations include a dynamic mapping feature that renters use to navigate property tours and a common area access panel that secures shared amenity spaces, such as pools, gyms or package delivery areas.
“At the end of the day, it’s all about being that customer-centric product that provides property owners with everyday benefits and long-term value,” Sanchez said.
For more information on Rently’s smart home technology, visit Rently.com.