A Property Manager View on Smart Homes and MDUs
The ability to attract and retain residents are among the leading benefits prompting smart home device adoption by property managers.
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The role of broadband for consumers continues to be important. Social distancing during the COVID-19 pandemic has increased consumer dependence on reliable connectivity and high-speed access. It is the foundation for access to and quality of connected services like telehealth, video conferencing and online fitness solutions to meet their daily needs.
In the multifamily sector, adoption of smart home technology is accelerating as developers and owners are persuaded by several business cases: improvements in operational efficiencies and increased rental revenue, as well as improved tenant acquisition and retention.
Property managers and owners perceive substantial business benefits from installing smart home devices throughout their properties. Smart home solution vendors also perceive MDUs as a potentially lucrative channel for new business. As a result, traditional MDU technology vendors are making investments to rapidly expand their service offerings, including acquisitions and IPOs.
In 2020, RealPage, a leading multifamily property management software company, acquired STRATIS IoT, a leading multifamily smart home solution vendor. Brivo, a leading access software vendor in the space, acquired smart home solution vendor Parakeet that same year.
In 2021, Latch, a smart home platform vendor, announced that it would go public and was valued at over $1.5 billion. SmartRent, a comprehensive smart home platform launched in 2017, has also gone public and is valued at $2.2 billion.
Several Internet service providers are targeting the MDU market segment as residents expect bulk broadband. Parks Associates’ research shows that 57% of property managers surveyed have bulk Internet services in at least one of their properties. Additionally, 55% of property managers who offer bulk internet services do so because they perceive it is an expectation among residents.
These include traditional Internet service providers such as AT&T and Spectrum. Smaller Internet service providers are also emerging nationwide, offering competing services.
This research reveals that 69% of property managers who offer WiFi services do so to attract new residents, and 89% of those who do not provide services plan to do so in the next 12 months.
High deployment costs and technical problems are leading reasons for not implementing WiFi. About one-third of property managers who offer WiFi on their largest properties experience difficulty maintaining connectivity and managing credentials.
Property managers are satisfied with smart home devices, but some intend to switch service providers. The firm’s research shows that the vast majority of property managers who use devices are satisfied with device reliability and use. The extensive training offered to platform users likely impacts their experience as 99% are offered in-person or video-based training for smart home device use.
Despite high satisfaction with the smart home devices, more than one-half of property managers report intention to switch vendors in the next 12 months.
The ability to attract and retain residents are among the leading benefits prompting smart home device adoption by property managers. The brands offered is an essential factor for vendor selection.
Unquestionably, this data underscores that today’s homes are dependent now, more than ever before, on connectivity and technology. The MDU market for Proptech is still fairly new, but growing rapidly. To gain competitive advantage, device and platform vendors must seek to understand which smart home use cases and value propositions are most highly valued by MDUs.
Device vendors must also understand how the need for dedicated networks, integration with property management software, and security and privacy concerns impact properties’ willingness and ability to implement smart solutions. Solution vendors must also create proposals that adequately demonstrate the business benefits of smart solutions and meet property manager and owner expectations for ROI.
Patrice Samuels is Senior Manager, Market Research at Parks Associates. Visit www.ParksAssociates.com for a comprehensive and deep analysis of the latest perspectives from property tech managers and developers on smart products.
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