Apartment demand increased significantly in 2021, but there are hints that it could slow down next year, according to RealPage chief economist Greg Williett, GlobeSt. reports. Analysts still believe that demand will stay above historical figures, but product absorption volume won’t remain as high as it was this year.
Near-term job additions in industries with low to moderate pay is one reason economists forecast a decrease in apartment demand, according to GlobeSt. Recovery from the mass layoffs last spring happened faster in areas with high-paying industries like technology and various professional services. The recent uptick in lower-paying jobs just doesn’t boost new housing demand to the same degree as when higher-salaried job openings are available.
A return to pre-pandemic rent prices is another reason apartment demand could slow in the New Year. During the COVID-19 pandemic, younger renters took advantage of the discounted rents in cities they might not have been able to afford otherwise. Outside of the San Francisco Bay Area however, rents have returned to, or have exceeded, pre-COVID prices.
There’s also the issue of build-to-rent single-family homes’ arrival in the Sun Belt region. These homes do not make up a big part of rental properties, but a number of them are currently under construction and could pull renters away from apartments. Build-to-rent single family homes are primarily in Sun Belt locations now because land prices are affordable enough to make the product worthwhile financially.
“We’ll have to wait and see how demand sources for this line of product are split among those who previously rented apartments, those who previously rented older single-family product from mostly mom-and-pop landlords, and those who are downsizing from larger single-family homes that they owned,” Willett wrote.
How can apartment landlords sustain demand?
As analysts noted, apartment demand will likely exceed prior numbers, but a return to pre-pandemic rent prices and lower-paying jobs comprising most of the employment rise could lead to a drop-off in rental requests. Landlords can safeguard against a demand decrease by making their apartment buildings as enticing to potential tenants as possible.
Rent price and building location will drive a lot of tenants’ decision making, but what building has to offer in terms of amenities will also play a role if they lease an apartment or not. As people become more dependent on their cell phones and other mobile devices, the more “smart” amenities a building has, the more likely a tenant will want to live there. Pools and fitness rooms are great, but the more things someone can do with their phone or over the internet is what could make them want to sign a lease with one building over another.
Here are 15 smart building amenities landlords should consider in order to keep up demand for their property.
With a smart lock, tenants can use their smartphone to get into their unit (and perhaps the building) rather than have to look for their key. Tenants simply use their mobile phone to unlock the electromagnetic device on their door. Implementing this device makes it so tenants don’t have to worry about holding onto a key and the landlord doesn’t have to worry about retrieving it when someone moves out or distributing a key when a new tenant arrives.
Plenty of tenants will likely want their own internet connection for security reasons, but others might not want to go through the hassle of setting up everything. For those tenants, landlords should offer building-wide Wi-Fi so they can connect their mobile devices to the internet whether they’re in their apartment or elsewhere in the building like at the pool or the common area. It’s important that the landlord does everything in their power to ensure their network is secure, however.
Installing thermostats that operate on Wi-Fi in every apartment is a win-win for the tenant and the landlord. Tenants can control their apartment’s temperature from wherever they are. Plus, they can track their energy consumption, which in turn will encourage them to use less energy—that’s good news for the landlord.
Smart lighting is another apartment amenity that could help save energy. Like the smart thermostat, it can also be controlled remotely. Tenants can dim the lights or change the color with their mobile device. They could also be set to turn on when someone enters a room or shut off at a certain time. Smart lights can also adjust to sunlight and turn off when they’re not needed, according to Homebase. Meanwhile, landlords can leverage the smart lighting solution to manage costs in unoccupied apartments or decide how to light a unit in real time during an apartment tour.
Automated package management
Online shopping has increased due to the COVID-19 pandemic, and the trend is likely to continue even after it subsides. That means apartment buildings can expect more package deliveries. In smart apartments, landlords can easily receive and track packages that are delivered to the building. Tenants then automatically get messages that their package has arrived.
In-Unit Package Drop-off
The automated package management amenity could be made even more convenient with in-unit drop-off. Rather than getting alerted that a package has arrived, tenants could have their packages dropped off inside their front door. With the smart lock apartment amenity, tenants grant delivery services access to their home so their package could be left inside, removing the fear of it being stolen.
Automated maintenance requests
It can sometimes be a hassle for tenants to get in touch with maintenance when they need something repaired. With an automated request system, a tenant can submit a ticket with their phone in less time. Plus, the landlord and their staff can more easily keep track of maintenance requests and assign the jobs in an efficient manner. If the building’s apartment doors are equipped with smart locks, maintenance teams can easily enter the unit, make the repair, and alert the tenant when the work’s finished and they’ve exited.
Sensors can add an extra layer of security to an apartment building. For example, sensors can activate a light whenever there’s movement in the stairwells, elevators or walkways. Sensors can offer peace of mind to tenants who are coming into the building late at night. Additionally, sensors can help save on energy costs as they can control when lights, heating or air conditioning is on based on movement in a certain area.
Smart video monitoring
Motion sensors can also activate wireless security cameras that offer additional peace of mind to tenants. Some systems can send tenants a smartphone alert if the sensor detects movement. Tenants can also use smart cameras to watch their children or pets and record video if they prefer.
Tenants can also put a camera within their apartment door peephole, according to property and financial services company Draper and Kramer. The devices act similar to a doorbell camera, but wiring and drilling is not necessary. Additionally, tenants can select an optional impact sensor that activates when someone knocks on their door. It’s also possible to communicate with visitors through a built-in speaker and microphone.
Smart plus, also known as smart outlet controllers, give tenants a way to turn appliances like their lamps and more into smart devices. Once the smart plug is in place, a custom smartphone app can be used to dim apartment lights or turn a fan on or off. Some apartments offer programmable schedules and can let tenants know how much energy their devices are using.
A potential step up from smart plugs is install devices that are already smart in apartments. Major appliances such as refrigerators and ovens can now be controlled with smart speakers and smartphones. Not only are these appliances more convenient for tenants, but they are also often more energy efficient.
Bike Sharing Stations
Landlords with apartment buildings near parks and trails have a unique opportunity to offer their tenants a chance to ride bikes and reduce traffic in cities. They can have a bike-sharing location near their building and tenants can use the company’s app to reserve a bike and pay the rental fee through their credit card on file. Tenants do not have return the bike to the original station either. If they opt for another mode of transportation to get back home, they just park the bike at a nearby docking station.
Designated Ride Sharing Locations
Ride sharing services such as Uber and Lyft are popular ways for people to get around. Trying to pinpoint an exact pickup spot at an apartment complex can be frustrating at times, however. Smart apartment landlords can eliminate that frustration with designated pick-up and drop-off spots for their tenants. When a tenant requests a rideshare, they can tell the driver where the pick-up location is. When they return, there’s a spot to point the driver to, rather than having them drive all over the complex.
Tenant mobile app
An all-in-one mobile app might be the most convenient smart apartment amenity of them all. Tenants can pay their rent, manage their utilities, Wi-Fi and communicate with their landlord in one location. A tenant mobile app could also be used to control unit smart devices like locks, thermostats and lights from the user’s smartphone.
Landlords have enjoyed record-setting apartment demand for the past year or so. While requests might not reach those heights again, there are plenty of steps landlords can take to keep demand as high as possible. Equipping their buildings with as many smart devices as they can is a great first step. Tenants will want a space that’s in a good location with affordable rent, but landlords should expect the next question after price to be about amenities—especially the smart ones.