Technology solutions continue to change the landscape of multifamily investing through all stages of a project’s lifespan, so much so that an entire property technology sector, called PropTech, now exists. This article covers nine multifamily technology solutions in 2021, from investment analysis software to technology that changes how we manage multifamily properties.
Kent Ritter is an experienced multifamily investor and operator helping you to build real wealth through real estate syndication. Learn More
Investor Analysis Tools
For investors, one of the best uses of new technology is the many analysis tools that assist in finding and vetting multifamily properties. While these programs do not guarantee a project’s success, they can reduce the time you spend finding a property and handle a lot of the heavy lifting of analyzing the property.
Find a Property
When a new investor first considers entering the multifamily market, familiarizing yourself with the market is the first step. However, that is easier said than done when you don’t know what is available or recently sold in an area. That’s where LoopNet.com comes in.
LoopNet serves as something like a Zillow for commercial properties. On it, you will find commercial property listings, property records, and sales comparisons. In addition, you can filter by property size and location to narrow down the search to units that best fit your business plan.
Compare Properties and Vet Investment Potential
After finding a property of interest, many programs exist to help you analyze relevant data. However, when one considers the many factors that shape the potential of a real estate investment, it quickly becomes apparent that these programs sift through extensive amounts of data.
Much of the information comes from public records, so theoretically, an investor could take the time to access each of the individual data points themselves. Alternatively, this information can quickly be at your fingertips for a price. Because there are so many of these products on the market, users can find the right combination of bells and whistles to accommodate their budget and needs.
For example, city-data.com creates detailed profiles of United States cities that include crime, population, and more information.
Other programs are much more complex and report data and use proprietary algorithms to analyze it. One such popular tool is Mashvisor Analytics, which compiles data for easy comparison of properties and provides a predictive analysis of specific neighborhoods, among other features.
Understand Your Data with Portfolio Analysis
Property owners end up with mountains of information reflecting occupancy, cash flow, expenses, and more. Those with more than one multifamily property in their portfolio can benefit from technology that analyzes the data for you, eliminating the human resources it takes to crunch and compare numbers.
Many systems, like Yardi Breeze, use a dashboard to connect and input data and then generate at-a-glance results. Not only does this information help owners pinpoint the current financial health of the property, but it also helps predict trends and patterns and identifies areas of risk.
Tenant Screening, Onboarding, and Care Technology
Recent technological developments make being a landlord easier than in the past, but they also create new expectations for residents. Therefore, even an owner happy with their current way of doing business would do well to stay abreast of these trends in order to remain competitive with similar properties.
Tenant Screening and Lease Application
Advances in tenant screening technology and lease application management provide critical relief in two pain points in the pipeline. And, there is no shortage of options; an entire cadre of services exist depending on the volume and budget for a property.
On the basic end of the spectrum, TurboTenant provides free tenant screening services to owners by placing the burden on the prospective tenant to provide information and pay the application fee. Landlords then receive rental and criminal records with a recommendation regarding the risk of the applicant.
Owners of larger properties and more units will benefit from more advanced software, like SimplifyEm, which operates as a monthly subscription plan with cost based on the number of units. Web-based services like SimplifyEm tackle the logistics of tenant screening and collecting online rental applications, sending payment reminders, managing vendors, and more.
Bluetooth and Smart Entry
Forgoing traditional keys in favor of modern alternatives is a trend particularly favored by Millennial tenants, but this new technology can also benefit owners. RFID key fobs are now the entry-equivalent of the DVD. Of course, many places still use them, but new and better options exist.
Tenants enjoy smart entry systems on their individual units because they no longer have to worry about carrying and losing a key. Some smart locks allow tenants entry using their cell phones, and others, like Yale Lock, use digital keypads. Tenants who use housekeeping, childcare, and pet-care services avoid the hassle of sharing keys with visitors to their unit.
Of course, property owners assume the upfront cost of installing the smart locks throughout the building, but this is an amenity that consumers are willing to pay for. Additionally, owners should see cost savings as they no longer need to rekey locks, and it should cut down on service requests for lockouts and lost keys.
Prempoint, an even higher-tech solution, gives owners access to all locks on their property through a single app. Send links for maintenance staff or other vendors for one-time access to a unit or area of the property, and even deal with tenant lockouts remotely. Tenants can also download the app to lock and unlock their own doors and community areas to which they have permission to access.
Internet of Things
The Internet of Things (IoT) refers to the growing web of smart devices that we bring into our homes to automate and simplify daily living. The smart locks mentioned above are one major component, but other IoT devices found in multifamily properties include smart thermostats, lights and outlets, security systems, and more.
The web of devices can be mutually beneficial to both tenants and owners. In the home, the technology gives tenants remote access to their units and makes life inside easier. However, for owners, the true value comes from the data created by these devices that can do many things, from pinpointing HVAC system maintenance and replacement needs, improving energy efficiency, and even creating online, interactive tours for prospective tenants.
Eliminate the Leasing Office
Technology and pandemic changes are working to make leasing offices a thing of the past. Increasingly, current and prospective tenants prefer virtual interactions with building representatives and want those interactions to be on their own time.
For example, iApartments is another company at the forefront of the smart access movement. Using their system, prospective tenants can take secure, independent leasing tours. This saves on property management costs and can attract tenants with challenging schedules that make traditional business day hours impossible. This feature is particularly attractive to younger tenants. Studies indicate they vastly prefer viewing a property without a leasing agent for the most genuine impression of living conditions.
Many of the portals discussed in this article, like SimplifyEm, also generate vacancy listings, filling another role of the traditional leasing office. And finally, thanks to the pandemic, QR codes are regaining popularity as a way to provide contactless information.
Online Rent Payment and Maintenance Management
Multifamily properties can expect to have at least one interaction, rent collection, with every tenant each month. Finding a way to streamline that monthly transaction should save property management time, and by reducing hurdles to payment, increase on-time payments.
Many tenant online portals exist to facilitate payments, but we recommend using one that can tackle other tenant communications, like maintenance requests and community notices. One such example is Buildium, which even allows tenants to upload photos of their maintenance needs, reducing the likelihood you will have to send out staff on a separate visit to assess the problem.
These types of web-based programs also allow owners to associate leasing and other documents with a specific tenant and link move-in and move-out inspections with the corresponding unit.
Conquer the Mailroom
Finally, some of the most popular technology solutions in 2021 tackle the growing problem of tenant packages. Online shopping tends to be more popular with younger populations, but the pandemic convinced even the most skeptical to click and ship everything from essentials to luxury items.
As a result, leasing offices suddenly became de facto package tenders. This scenario is inconvenient for both management and residents. Staff time becomes consumed by storing and fetching packages, and tenants have to rush to the office to pick up their packages while it is open.
Apps like Notifii help staff quickly log packages in and out of the cloud-based tracking system, which automatically notifies residents to pick up packages and mail. Others, like PackageX, include inventory features to make locating the deliveries easier.
To take the most hands-off approach to package management, consider installing smart lockers. These standalone systems altogether remove the burden of package management from staff. Instead, delivery drivers deposit the packages in the lockers, and then tenants receive a notification to retrieve the parcel via a key, QR code, or fob.
How to Choose Real Estate Software and Technology
The real estate software options are nearly endless, making it challenging to settle on just one or two or even know where to begin implementing technology solutions to your multifamily projects. Unfortunately, there is no standard order or formula for deciding, but there are some questions you can ask yourself to find the right fit for your properties.
Stay Within Your Budget
Each company creates its fee system. Some only provide cost information via a quote after determining the number of units or cash flow of a property or set of properties. Generally, the cost increases with the number of units, but the per-unit price drops.
Many of the programs operate on a monthly fee basis, and others on annual one-time payments.
Investors with only one or two properties can undoubtedly benefit from the free software out there, but paid versions can provide benefits well worth the cost. Know that the sticker shock can be painful for some all-inclusive programs that run in the thousands of dollars per year bracket.
Take Advantage of Demos and Free Trials
Many web-based programs targeted at improving multifamily analysis and management offer free 7-day or 30-day trials to give you time to explore the platforms and learn how the features will work for you. Additionally, many offer one-on-one support to tour the program before purchase. If you don’t see either of these options available, contact customer support before paying the total price to fully experience the program.
Be Realistic About Your Customer Support Needs
Finally, be honest about your comfort with technology and choose a product that you will actually use. All of these technologies should improve the performance of your multifamily business, whether through time savings, data analysis, or tenant satisfaction and retention. But none of that will happen if you don’t actually use the software.
Many of these products offer continuing customer support, and choosing an adequate level of support is key for success. For example, some offer 24/7 individual support, while others only have a call center available during business hours.
Remember that additional assistance may come at a price, so be sure to factor that into the cost-benefit analysis you do when selecting new technology solutions.
While most of these technology options do require a monetary investment, they are increasingly vital for multifamily investors who hope to expand beyond only a few units. When implemented judiciously, they are cost-effective solutions that reduce property management costs, increase income, and free up your time to pursue additional real estate projects, and consequently, experience greater returns.
PropTech is a major technology sector right now, so if the perfect product to meet your needs does not exist yet, it may very well in the next year or two.To find out more, call us with any questions you may have.