Technology Package for Older Apartments?

12 Replies

Amongst other value add plays, I'm looking into adding a technology package to a C+/B- complex in a Class B+ area. The location is more family friendly, than millennial focused so want to keep it fairly simple. This would primarily be smart thermostats and light switches. Curious to know what kind of premiums people are receiving and has this caused headaches for the PM staff for residents who are less tech savvy and/or during unit turns. Also, given that it's an older property (1970s construction), I'm trying to determine if the demand and returns would be there. Initial thinking is to have it available for about 20% of the units. 

@John Casmon I wouldn't bother. At most, maybe a USB charging capable outlet here or there but nothing more. Think about it, would your target demographic likely buy smart thermostats and/or switches?

Agreed, most people haven’t bought into the idea of smart switches and such. Mostly because figuring it all out is still difficult and most people don’t really know what to do with lights they can control remotely

I can’t imagine most people paying more for it.

Maybe ‘free’ WiFi might be a better sell?

Yes, I‘m getting estimates for the Wi-Fi to see the cost/benefit analysis. Still curious what premiums people are achieving with these tech packages even if we don’t do it.

Originally posted by @John Casmon :

This would primarily be smart thermostats and light switches. 

The power company in Northwest Florida offers a free smart thermostat program (Google "Gulf Power smart thermostat"). Participation in its Energy Select program requires either ownership of the home or the homeowner's permission (along with broadband Internet with secure WiFi).

When I asked my landlord about it (because I would need their permission), the answer I got back suggested they had no idea what it was about, so I dropped the matter. I'm happy with the manually-programmable thermostat that came with the apartment.

I installed programmable t-stats that allowed the tenants the ability to manage their A/C. Biggest PITA. calls all the time on A/C not working only to find out they had it set wrong. 

I installed washers and dryers that use credit cards and connect to wifi in the laundry room, it allowed the tenants to have the ability to check W/D and pay on line. It's was a PITA. Calls, "I can't get the credit card to work!"

We found that the simpler it is to use the less calls we receive. so, we apply the K.I.S.S principle. "Keep it simple, stupid"

 

@John Casmon it is a great thought to convert the units, however from a rent bump perspective, I wouldn't count on an increase.

Based on my experience, a C+ resident most likely won't consider this value-add or want to pay for it.

I had an all bills paid 200+ unit deal. I contacted my electric provider and they would install "smart" thermostats at no charge, but they wanted me to lock into a long term contract, which I didn't feel comfortable doing.

If you are looking to increase rents my suggestion is to focus on other value-add strategies such as interior upgrades.

Originally posted by @Brian Adams :

@John Casmon it is a great thought to convert the units, however from a rent bump perspective, I wouldn't count on an increase.

Based on my experience, a C+ resident most likely won't consider this value-add or want to pay for it.

I had an all bills paid 200+ unit deal. I contacted my electric provider and they would install "smart" thermostats at no charge, but they wanted me to lock into a long term contract, which I didn't feel comfortable doing.

If you are looking to increase rents my suggestion is to focus on other value-add strategies such as interior upgrades.

Thanks. I wasn't thinking about it originally, but the HHI for the area is at $100k and we would be repositioning the property to be more of a class B asset when completed. Definitely planning on all the interior upgrades and a handful of other value-add plays, just wasn't sure if we should consider a tech package. We'll scrap the idea, but monitor what our competitors are offering. 

@John Casmon , you could always offer the package to new tenants and install on an as needed basis, as opposed to installing in a fixed percentage of units off the bat. This would allow you to gauge value without committing fully. Of course cost of single units vs bulk would need to be analyzed here as well.

I agree with @Brian Adams that smart home features seems more like a B and up amenity. But then again, you have folks struggling to make ends meet paying $40/mo for every iPhone in the family.

Originally posted by @Krishna Chava :

@John Casmon I have installed tech package in most class C+ properties and tenants are ready to pay 25 extra for it. This wasn't possible a year ago, what changed the game is immense popularity and utility of video doorbells.

Thanks for the response. I wouldn't expect these in all class c properties, but I could imagine video doorbells would be popular in c class areas for added safety. 

Vidoe doorbells improve security but main attraction for my working class tenants is knowing who is home and knocking on the door as they work long hours. There is also novelty value like an iPhone

Krishna.