Housing owners and operators faced with declining rent revenues are turning to technologies that … [+]
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Six months of paused evictions, lulls in rent hikes and waived fees have helped countless renters better weather the pandemic, but have left many housing providers feeling the pain of lost revenue. How are the savvy providers responding? By seeking to grow asset value via investment in technologies that fortify the integrity of their data. They’re finding open APIs and true data integration within their proptech platforms can help them do just that.
Once the pandemic forced providers to make financial accommodations for their residents, the resulting lease extensions and deferments required systems to be revamped, says Brad Steiner, CEO and founder of technology and software company Engrain. The result was a disruption in data-dependent trends, forecasting and planning. Operators soon understood they needed more robust strategies for managing and using data.
“For example, it used to be sufficient to adjust rents broadly across a specific floor plan,” Steiner reports. “Now rent decisions will take into account inventory, maintenance requirements, proximity to amenities, number of packages a resident receives and multiple sensor inputs coming from the property and within each apartment. By using data visually and contextually, multifamily communities can be operated more efficiently, at higher valuation . . Each community has [its] own ecosystem that’s constantly reacting to data points from a myriad of internal and external sources.”
Limited access to buildings for the purposes of leasing, touring, inspections and maintenance calls for intuitive data visualization through the lends of property maps, which combine unit-level data points from every system and vendor interaction with the property for intuitive analysis and consumption, Steiner adds.
Investment in smart home systems, modern operations platforms, new tenant managing software and other technologies integrating with each other through APIs will allow savvy owners to realize higher asset valuations, he concludes.
“While most were slow to embrace these investments, many are now being forced to prioritize data-based projects [resulting] in more efficient operations, better pricing models and happier residents,” he asserts.
Data accuracy
Providers of housing are advised to seek vendors that can not only help ensure the accuracy of data when a lease starts but can update the data prior to renewal, says John Bradford, founder and CEO of PetScreening, which lets multifamily owners outsource their pet risk assessment at no charge. Over a lease term, renter income can rise or fall, roommates can change and even new pets can be welcomed without property managers being aware. “All these examples demonstrate why using technology that helps maintain updated data, even at a lease renewal, can improve the value of the asset,” Bradford says, adding providers should consider proptech platforms that co-exist with their current property management platforms while providing the audit capability essential in maintaining data integrity.
Blenim Z. Zegin, CEO and co-founder of Radix, a company that helps apartment operators collect data about their comps and the apartment markets in which they operate, reports real-time data his company delivers have helped owners and operators. “We gather property- and unit-level data each week, and from that can build weekly submarket- and metropolitan statistical area-level data,” he says.
“In other words, owners and operators do not have to wait for months to see what is happening, but can evaluate in real time how the industry is being impacted and thus understand where valuation is trending as well.”
Informed buying
Of course, it’s worth remembering improved data is helping not just those providing housing, but folks interested in buying it, including at the single-family level. So says Nima Wedlake, principal with Thomvest Ventures. He observes that increasingly robust and more instantly-updated data are equipping “prospective buyers to better weigh the pros and cons of their home-purchase decision,” he says.
“At the tips of our fingers we have access to the full universe of available properties across every market, the relative cost of these properties, as well as ratings and reviews of local areas, schools and demographics. This should enable a migration to new markets in a way we didn’t deem possible in prior generations.”