As an investor in rental real estate property, taking advantage of current market trends is key to the success of your business. Understanding what will help you finance, manage, and increase your property value while drawing prospective tenants is important in gaining leverage in such a competitive field.
In 2021, one of the best investments you can make in your rental property business is technology integration. In all facets, technology has continued to benefit both investors and tenants, making its advantages key in any multifamily property.
Purchasing and Financing
Purchasing your rental property will take time and patience. However, whether you’re purchasing a multifamily residential home or condo/apartment complex, you can take advantage of technology and digital capabilities for a better purchasing and financing experience.
For multifamily residential homes, you should still look into a mortgage to help finance your property over a period of time, even if you have enough expendable cash to purchase the home. Doing this will leave room for any recurring or fixed expenses you must pay as an investor/landlord. Utilizing a digital mortgage lender will provide efficiency throughout the whole process, from applying for the loan to closing on the home. Even commonly tedious tasks like applying and waiting for a mortgage preapproval can be conducted through digital lenders to help expedite the process.
In fact, not only do 74% of borrowers use digital lenders, but they are also 41% more likely to rate their experience in the financing process as being “excellent” “or “above average.”
Condo and apartment complex financing operate more efficiently under similar technology. Most investors will opt for a commercial real estate loan, and these days, many are processed using automated technology to help drive efficiency for lenders and investors. Robotic process automation has helped lenders to streamline loan origination and servicing workflows like customer portals. Because of this integration of automation in commercial lending, investors can see a reduction in loan pricing and even better closing time frames from lenders.
From the tenants’ perspectives, technology implementation within the property and individual units is a must-have and typically drives success for you as an investor as well. With so many millennial renters having a strong presence in the digital age, they have become accustomed to the integration of technology into their lives, and their rental expectations are no different. In fact, 86% of millennials are willing to pay higher rent for apartments with technology integration than those without, showcasing the importance of technology when it comes to your property’s amenities.
Many property owners have adopted smart home technology to ensure an enjoyable experience for each of their tenants. Smart home technology has been useful for HVAC systems, water usage, and lighting.
Smart thermostats, for example, are typically very popular in multifamily real estate because of their almost immediate return on investment. The thermostat’s cognitive abilities will reduce heating or cooling in the vacant units or while the tenant is sleeping. Although this may seem like a minuscule feature in your units, it actually saves most investors/landlords between 10-15% of the annual heating bill. Automated thermostats can be extremely beneficial in maintaining a temperature level above freezing in vacated units on an operational level. By doing so, you greatly reduce the risk of pipes freezing or bursting during colder months.
In recent years, real estate has made a huge step in the right direction by integrating technology into security and home protection systems. Typically, through artificial intelligence and machine learning, systems can offer automated sensing, security alerts, and protection to ensure the safety of renters and buyers.
More specifically, tenant-controlled smart locks are a security measure that many multifamily building investors have implemented. Depending on the type and brand you choose, most smart locks will allow tenants to lock and unlock their doors through the use of a smart device. Many of these systems are also beneficial to servicing and maintaining the property because of their temporary e-card capabilities. Landlords can allow maintenance workers temporary access to tenant units in need of maintenance. After usage, the card will deactivate and no longer allow that employee access to the room. Simple changes in security, such as this, can be the difference between tenants applying and not applying to your available units.
Aside from smart locks, consider investing in other smart security systems like sensor-controlled fire and flood emergency systems, camera-enabled smart doorbells, and so much more.
Utilizing emerging technologies in your rental property can be a great way to more easily finance and manage your rental property, add value for tenants, and keep both you and your tenants safe and secure. Be sure to integrate some of these tools into your rental—your tenants will thank you for it!
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