When considering any major project for your property, both you and your property owners likely have the same question in mind: “What’s the expected return on investment (ROI)?”
The most proactive property management companies are constantly hunting for new ways to either decrease costs, or differentiate their properties. This being the case, the question of a smart apartment’s potential ROI is one that I receive pretty frequently.
Simply put, smart apartments offer a wide range of options for achieving your desired ROI. But for the sake of brevity, we’ll focus on just the top 3.
Lower Cost of Filling a Vacant Unit
Consider this: According to Apartment Data Services, the average rent for a 1-bedroom apartment in Houston is about $1,000 per month. Additionally, current specials for signing a new lease offer anywhere from 1 to 3 months of rent concessions. This means that a standard 1-bedroom apartment might cost Management an average of $2,000 to fill ($1,000 in monthly rent with a 2-month rent concession). Now let’s compare this average concession to the installation cost for SOTAH’s most expensive smart apartment solution: $840.
Not only are smart apartments typically cheaper than rent concessions, but that vacant unit is likely to lease more quickly than its non-smart counterparts. In our survey of 200 local Houston residents, nearly half of them were “moderately” to “much more likely” to at least visit a property that offers smart apartments. If you have a team of capable Leasing Agents, then an increase in foot traffic should get you excited.
More Control Over Vacant Units
Most properties use resident turnover as an opportunity to fix or upgrade the apartment. But what happens when someone accidentally leaves a light turned on in that vacant unit? Or if the AC is left running? You typically have no way of knowing when this has happened until someone physically steps foot in that unit again, which could range from days to even weeks (hopefully the former). Smart apartments give you complete control over those vacant units with remote access to lights and temperature settings. This provides you with immediate cost savings by minimizing the amount of electricity wasted by empty apartments.
Increased Value and Improved
9 out of 10 Houston residents believe smart home systems add value to the overall living experience in an apartment. They see real value in the modern lifestyle that smart apartments offer, which provides ample opportunity for you to capitalize on the perceived value of your property. Since each apartment attracts residents with different preferences and price points, it’s up to you to determine the best method for achieving your desired ROI.
The traditional Multifamily playbook tells us that when supply is surging, there’s only one guaranteed way to attract new residents: Concessions, concessions, concessions. I’d like to respectfully disagree with this notion. If your goal is to beat the Houston supply surge, then you should explore new ways to differentiate your property that can also offer a healthy ROI. Otherwise, how do you expect to attract new residents by offering the same perk as everyone else?