Editor’s note: It’s hard to believe that this is the Buildium Blog’s 1,000th post, and that we’ve been publishing content for over 10 years now. In that time span, it’s also mind-boggling to conceive how much technology has evolved with us and the property management industry as a whole. Innovation isn’t slowing down—and neither will we—in helping our customers navigate those evolutions while still managing and growing their businesses. The future is all about being an empathy-driven, tech-enabled business that connects with residents and owners in a human way before all else. For this reason, we decided to make this our 1,000th post and cover what the tech-enabled future might hold.
By 2030, renters are expected to form more than 22 million new households in the US. In light of this upward trend, one of the true tests property managers and landlords face is in their ability to stay competitive in an increasingly demanding market—created by technology. Figuring out how to serve clients within the frenzy of change is a question on most business owner’s minds every day. Is the real estate industry ready to meet renters’ expectations and navigate the new opportunities that technology brings?
Generation Z (‘97 – ‘10)—which came of age in the era of the smartphone—is now entering the rental market. With this generation moving into adulthood, will come high expectations around what the home of the future actually delivers. Each year, we witness smart home innovations move more quickly upstream from the early adopters to the mass market. For property managers, offering the latest technology in their units is already a key differentiator to attracting and retaining renters of all generations.
As they enter the rental market, Generation Z bring their high expectations of technology with them.
Market trends are redefining homeownership and putting a dent in the American dream, while changing the rental landscape for property managers. A whole host of factors are making it harder for Americans to buy homes. Stringent credit standards make it hard to qualify for a mortgage; stagnant wages and high rents make it hard to save up for a down payment; and the affordable housing shortage leaves potential homebuyers with a lack of feasible options.
All the while, technology moves in tandem; always finding a creative method to monetize these shifts. Today, we are seeing the Internet of Things (IoT), artificial intelligence (AI), and automation spawn new opportunities and drive business decisions—all driven by the increasing penchant for gathering large quantities of data to analyze, and iterate.
Beyond the Smart Home
In Buildium’s 2018 Renters’ Report, we identified that 87% of Millennials would appreciate being able to take care of rental processes online, along with 60% of Baby Boomers. Moreover, we found that 71% of Millennials and 55% of Baby Boomers say that smart home tech increases a rental property’s desirability. One can only imagine that the hunger will continue for the convenience and hipness of the latest technologies. To move with this trend, property managers must now evaluate the cost-benefit of adding smart thermostats, locks, security systems, and personal assistants to their units.
Yet, smart home tech is still fighting its way into the mass market. According to a survey done by McKinsey & Company, smart home tech is growing by 31% per year, but is lagging behind overall household growth. As it inevitably becomes an attractive differentiator in new homes, what’s even more fascinating is how property managers might use the data gathered in their units to deliver a better resident experience in the future.
Outside of our industry, we are already seeing this type of rapid innovation in the retail space as can be illustrated by Amazon Go. Not only can you venture through the store and have an experience that’s cashless and cashierless, Amazon can track inventory by cross referencing various sources of data to identify a specific item through weight sensors, cameras and app usage. They may even be able to follow your every move to record traffic patterns and optimize your shopping trip with personalized offers. Imagine if, as a property manager, you could measure the usage of amenities and communal spaces in your multifamily or community association with this level of complexity.
Why mention Amazon? When it comes to the real estate industry, there is an application for data, especially when managing multi-unit buildings and large community associations. IoT technology can optimize everything from the temperature of the pool to the fielding of maintenance requests more efficiently than a human can.
While most small to mid-sized businesses couldn’t afford such an offering, it’s still beneficial to know the developments so that property managers might enhance their services through affordable, modern technologies. In Buildium’s guide, What to Watch in 2018: 7 Predictions for the Housing Market & Property Management Industry, we wrote that a smart strategy to attract and retain residents included digital capabilities like mobile communication, electronics payments and leasing, online maintenance ticketing systems—and that recommendation stands today.
How to be More Human, Algorithmically
In an ironic fashion, technology—the phenomenon that could be blamed for hindering our social skills—is also attempting to make us better communicators.
One of Boston’s latest unicorns, Cogito—who recently drummed up $37M in funding—and their investors think that we can be more effective with an AI companion to augment our emotional intelligence. Cogito’s software offering assists customer service reps by doing just that. The technology is able to analyze voice and speech patterns in real-time to make recommendations on how to respond to a customer on the phone.
For property managers, it has never been a better time to sharpen their soft skills with every customer interaction. Understanding the latest resident communication trends is paramount in knowing how. Both residents and owners want to receive consistent updates through online portals as well as communicate through text messages be it a leaky faucet or an imminent weather emergency.
Property management software has already become an expectation for many residents and owners.
Where Property Management Software Fits
Modern property management SaaS software connects the dots and allows property managers to accept payments online, screen residents, and track maintenance requests at scale. The important element to remember is that by becoming more efficient with routine tasks, property managers and staff can spend valuable time on developing relationships to serve their residents and grow their business. As the industry progresses, these online services are already becoming the new normal for property managers along with their residents and owners.
Gadgets aside, property managers can still incentivize today’s renters with tried-and-true amenities. From our research in the 2018 Renters’ Report, we also found that the top amenities residents are willing to pay higher rent for are an in-unit washer and dryer; central air; and a private outdoor space.
When technology is at its best, it’s invisible and integrates seamlessly into our lives. If technology ever gets in the way of the connection you have with your residents, then it will always do more harm than good. While we continue to push the envelope, nothing overshadows the human touch and exceptional customer service that focuses on the resident experience first. The most successful property managers already know that.
Interested in learning more about the evolution of technology in property management today? Register to receive your copy of the 2018 State of the Property Management Industry Report in partnership with NARPM.Read more on Property Management Trends