Following the report of Statista in 2019, more than 33% of homes in the U.S. will have one form of smart home technology. This number is projected to grow to more than 50% by the end of 2023. Looking at the revenue generated, it summed up to about $27.24 Billion as of 2019 and is projected to go above $44.79 billion by the end of 2023.
Although the technology trend is seen to be dominant amongst the wealthy owners in the single-family home sector of real estate, a new stride is occurring in the multifamily sector regarding smart home technology. This has become a strong point for homeowners and managers looking to differentiate their homes using the latest trends and what renters want.
With the present increase of renters, Pew Research stated that more households are renting now than in previous years. This has pushed a lot of investors to increase their interest in multifamily buildings and has also pushed a lot of millennials to rent rather than own to save money. With that said, we cannot remove the fact that tenants are seeking something more than an ordinary apartment. They are searching for homes with sophisticated technology. Research has also established that more than 86% of millennials are willing to go for smart apartments well equipped with high-tech gadgets. This is also seen with 65% of the baby boomer generation.
Let’s take a closer look at how technology can be utilized in the multifamily sector.
Immersive Experience Using VR (Virtual Reality) and AR (Augmented Reality)
In recent times, immersive experience has caused a paradigm shift in the multifamily and real estate sectors. Intending residents can now experience a property using VR and AR without having to travel to the property. VR and AR are creating more personal experiences for intending homeowners and renters, and it is expected that this will see the next level in no time. There is also a look into how customers experience properties where a prospective client holds up a smartphone to an area of the multifamily property and all the information and details of amenities including pricing will show up.
Artificial Intelligence (AI)
Artificial Intelligence for multifamily homes is going beyond the normal Alexa technology and is transcending into more sophisticated areas like identity verification. We can already see the use in airports for security using facial recognition to confirm passengers faster. In the multifamily space, facial recognition is used for guest verification or service personnel going out and coming into the building. Also, we see the utilization of Google Home and Alexa in a wider form in most homes for property management.
Smart Space
Smart spaces are gaining traction in the industry as more and more environments are repurposing their buildings and properties to become smart spaces. The multifamily homes are not left out in this drive as many homeowners are opting for smart spaces to enhance cost savings, better security, proper maintenance, and customer satisfaction. Some of the areas touched include smart lighting, smart thermostats, smart locks, security devices, smart entertainment systems, and other automated systems.
Utilizing Blockchain for Multifamily home
Blockchain remains a disruptive technology in all sectors including real estate. It can be used to tackle complex everyday problems using instant and verifiable transaction recordings. This is the record-keeping technology that is applied by Bitcoin. Once data is stored on the chain, it is fully accessible and stored forever. The accessibility of such information is faster compared to traditional methods. This will speed up the processes of buying and leasing in the sector. Furthermore, the Blockchain will change the way payments are made; both for purchase and rent. This is most likely going to be a game-changer in the multifamily space and the real estate sector at large.
Four Ways to Use Technology to Improve Your Multifamily Investments
These are just a few ways in which technology is being utilized in multifamily homes. There is a lot to expect from technology in the way business is done between multifamily homeowners and renters. Also, there are numerous benefits that technology brings to the table for multifamily homes. A few of the advantages are:
- There is improved sustainability which is not just a function of minimizing the environmental footprint of the building, but it is underlined in the significant reduction of cost associated with lighting, cooling, and heating.
- There is real-time data that can provide property managers with proactive insight into identifying opportunities for improved efficacy and reduced waste.
- With the substantial risk faced by most buildings from mechanical faults to equipment malfunction and even tenant activities, the entry of technology can mitigate the risk in a very significant way.
- Finally, we cannot deny the fact that smart home technology makes tenants happy.
Looking at the different ways technology can be utilized in the multifamily sector and the various benefits it brings to both homeowners and tenants, there is no denying the fact that wider adoption of smart multifamily homes will be on the rise in no time.
Author: Veena Jetti, Vive Funds