When looking to upgrade a community or planning a new development, a suggestion or consideration you might have heard is the addition of proptech. But what exactly does it encompass? And how do you select the right technology for your property?
Property technology — or proptech — is a broad range of products, services and systems that use technology to enhance or streamline the ways people interact with a property, according to Aaron Rudenstine, CEO of ButterflyMX. “The proptech sector is the technology-focused arm of the real estate industry and in the student housing world, proptech leverages technology to reimagine how students and staff live, work and visit buildings,” he says. This technology encompasses everything from touchless and mobile-friendly building access to virtual property tours, maintenance requests and smart thermostats.
The implementation of this sort of technology was a boon during the COVID-19 pandemic as owners and operators sought provisions to limit face-to-face interaction to keep residents and on-site staff safe. “The pandemic has accelerated the integration of proptech not only in student housing but in every industry, from hotels to office buildings,” says David Schnepp, vice president of marketing at Virdee.
“There are two main drivers: First, the pandemic made everyone more conscious about how much they interact face-to-face with others,” he continues. “Overnight, nearly every restaurant and store had curbside pickup. Zoom calls for work became a common practice, and similarly, properties of all kinds started introducing technology that enabled more ‘touchless’ interactions for tenants, guests and management. Staffing troubles have also plagued nearly every business since the start of the pandemic, and there is no end in sight. Proptech has the ability to reduce the pressure on staff while maintaining and even increasing the service levels to tenants.”
But not all universities or owners had the ability to implement new technologies at the drop of a hat. “The closure of numerous on-campus facilities during the pandemic, along with the resulting drop in attendance, delayed a bit of the application of proptech in this sector,” says Keenan Cheung, vice president of student housing sales with SmartRent. “Many educational institutions also suffered from a reduction in revenue during this period,” he continues. “Fortunately, with decreasing virus transmission concerns and students returning to housing, the proptech market is seeing increases in implementation. Heightened awareness of the Internet of Things (IoT) due to the pandemic has boosted interest in contactless move-ins and move-outs, keyless solutions, automated work order processing and more.”
For the Students
With student housing catering to arguably the most tech-savvy form of renter, it comes as no surprise that students are seeking properties that embrace the latest and greatest tecnological applications. In a recent RentCafe report, 62 percent of students stated smart home technology was a priority over traditional amenities such as fitness centers, laundry and parking, according to Cheung. “The most critical offering is managed Wi-Fi,” he says. “Students need multiple access points to the internet since they use Wi-Fi to complete assignments and interact with other students and professors.”
“You can see how solutions that embrace their fast-paced, on-demand lifestyles are going to be quickly adopted and used — especially if those solutions are mobile-based,” agrees Rudenstine. “An example of this is technology that ensures students’ deliveries — from their Postmates dinner to the textbooks they order online — make it past the front door and are securely stored until the resident picks it up.”
In addition, students don’t want physical barriers to hinder their digital lifestyles. And this comes to the fore most often in access control, Rudenstine continues. “Think about it: access control that relies on fobs and keycards is burdensome and restrictive,” he says. “Students risk forgetting their keycards or losing their fobs, and it’s a pain to dig through your backpack to find your keys.”
Instead, a mobile-based access control solution allows students to use their smartphones to unlock the door for themselves and their guests. “And you can go a step further by choosing a video access control system, which improves security by including video of the person who’s trying to access the property,” he continues.
Mark Zikra, senior vice president of technology and innovation with CA Ventures, agrees that access control and building security are top of mind for both students and their guarantors when selecting a community. “Renters are more aware of the security layers in a building than ever, including access control, security cameras, guest intercom and any backdoor position switches that keep entrances from being propped open,” he says. “Technology that keeps operators aware of what is happening in their building and students feeling safe is extremely important.”
The addition of occupancy sensors that can tell a resident how busy the gym is or if one of the amenity spaces is occupied, and offer the ability to reserve a study lounge or study room via mobile application, are another popular offering with students. “Having those pieces of technology allows for greater insight into the building for operators and allows residents to have greater control over their lives, which is really important,” Zikra continues. “Being able to allow our students to have insights into what is happening in the building allows them to study and learn and do the things that college students should do without the headache inherent with a lack of information.”
There is also a strong interest from students in finding answers to their own questions rather than calling the leasing office to ask, according to Kevin Jones, vice president of RealPage. “A student would rather search through an app or website to identify their answer than wait on hold to speak with a person to address their needs,” he says. “Providing a platform for any service or product with a simple user experience and accessible information for a resident will stand out and play a large role in their experience living at a property.”
For the Operators
One of the main benefits to operators of implementing smart technology is that digital communication tools increase response time and feedback from residents, allowing owners to mitigate any issues that may arise much faster, notes Gerry Wiatrowski, co-founder and chief marketing officer at Incentco. “The use of property technology dramatically reduces on-site labor and increases financial controls by automating the resident incentive process.”
One such form of technology is leak sensors, which Cheung notes are one of the most important proptech components to install at any property. “It’s very easy for a small drip to evolve into a catastrophic leak in a relatively short period of time, making leak detection of paramount importance,” he says.
“After that, the utilization of smart thermostats is important because of the cost-savings they offer — which is about 12 precent on heating and 15 percent on cooling,” continues Cheung. “Conventional multifamily is also reaching a point where smart thermostats are a necessity.” Grace Hill and the National Multifamily Housing Council (NMHC) conducted a survey last year that showed 70 percent of renters are interested in smart thermostats or would not sign a lease if a unit didn’t have one, he notes.
And one of proptech’s latest advantages is the ability for owners and operators to control these thermostats while a unit is occupied. “College students are busy, so thermostats may not always be at the forefront of their minds,” says Cheung. “Smart thermostats can be designed to automatically reset to an optimal temperature during the periods when students are least likely to be in their rooms — typically from 9 AM to 3 PM — thus maximizing savings. Adjusting a thermostat by seven to 10 degrees for just eight hours a day when a lot of people aren’t in their residences reduces costs by about 10 percent annually.”
Looking to start achieving these cost savings through the implementation of new technology? The first consideration for owners and operators should be the market, according to Rudenstine. “What are your prospective residents looking for and how do they live?” he asks. “Some communities may decide to focus on improving wireless signals in the building because cell reception is poor. Others might decide to offer high-speed internet to all residents as part of their rent. And others may feel that delivery and package management is a top priority for incoming student-residents.”
Next up for consideration are your goals as an operator, he continues. “Is your goal to speed up leasing? Increase rental rates? Or improve your building’s net operating income? This answer will inform your proptech selection, budget allocation and how you position your tech amenities to future and existing residents.”
It’s also important to think about your building’s infrastructure. “Most proptech requires some level of physical infrastructure to support it, like high speed internet, hardware and wiring,” notes Rudenstine. “If your building doesn’t have the necessary infrastructure, some solutions may not be an option because upgrading the infrastructure is cost prohibitive. If this is the case, consider wireless or cloud-based options which reduce the need for investing in building infrastructure.”
And ultimately, when property owners and operators are deciding on new technology, they should select solutions that solve resident needs while also being cognizant of operational friction, notes Jay Harkrider, managing partner with Foxen, a technology provider offering insurance solutions and financial services for property owners and operators.
“With the numerous tasks and responsibilities site teams oversee on a daily basis, it’s important to ensure the service or product offering is mutually beneficial to both the resident and the operator,” he says. “Day-to-day property management is a challenging responsibility, so solving for challenges on both sides of the table is imperative to successfully ensure your team embraces the new technology and adoption is successful.”
Adam Meshekow, co-founder and chief growth officer at Leap, suggests beginning with proptech that is going to move the needle with both low cost and high impact. “Test and learn,” he says. “There are many items that you can test and pilot and see how they perform at your property. The other core function of selecting the right technology is seamlessness and ease of use. If it doesn’t innovate, integrate and offer the opportunity to scale, it’s very hard for it to be successful.”
An additional benefit offered by property technology is the safety net it provides against employee resignations. “Keeping up with staff turnover is a growing trend,’ says Ann Morgenstern, community manager with StarRez. “Student housing was not immune to the ‘great resignation.’ Automated, efficient solutions help alleviate the burden felt by staff shortages. Additional support to the community through webinars, training plans for new staff and sample documentation help ensure that new staff are able to be quickly brought up to speed.”
For the Future
Technology is constantly evolving and presents a number of challenges for those trying to keep up with the latest and greatest offerings. “Every community will need smart IoT products to remain competitive,” says Cheung. “Residents expect it and communities that don’t offer it will be behind the curve. With so many communities looking to adopt smart home technology, integrations with property management systems (PMS) will be critical. Work-order management systems will grow in popularity. Also, we will see a shift away from ID cards and fobs and a move toward more advanced access technologies, including fingerprint, voice and facial recognition, as well as license plate readers in parking areas and on campus.”
Another challenge with technology in the rental is space is to not completely eliminate human interaction, notes Wiatrowski. “Renters still like to have some human interaction with their management team,” he says. “Engagement tools can offer help to provide a balance of technology with human interaction to ensure residents have an engaging experience which ultimately leads to more referrals and renewals.”
“It’s an exciting space — new technology is around every corner, like robots that deliver food throughout the building and even fold laundry,” says Schnepp. “The most important area will remain the expansion of what we’ve seen during the pandemic: touchless access to everything. We’re doing more on our phones. Driver licenses are moving to phones. Car and house keys are moving to phones. That access control aspect is going to remain the focus and will expand to cover more areas: give a friend a key when you’re not home; provide secure access to your dog walker; revoke a key from a roommate that no longer lives with you. All those interactions need to be seamless for both tenants and property management.”
This article was originally published in the March/April 2022 issue of Student Housing Business magazine. To subscribe, please click here.