How Smart Apartment Technology Reduces Property Expenses

When it comes to running a property, operating expenses can cut into 50% of a property manager’s overall income. A substantial portion of these expenses comes from disasters such as property floods and apartment break-ins.

When these expenditures get out of control, net operating income (NOI) suffers. Here are some ways smart technology helps prevent these disasters and reduce expenses.

Disaster Mitigation: Apartment Flooding

Did you know that most renters insurance policies do not cover water damage as it applies to Liability Coverage?

This can leave PMs like you picking up the tab for these types of disaster-related expenses.

For instance, apartment flooding, which you can read about here, brings on a variety of spiraling costs.

These costs include

• Waste and water removal (up to $8,000 each occurrence)
• Mold remediation (cost: upwards of $3,500)
• Reconstruction (cost: up to $70 an hour for labor)

To combat this, smart technology boasts smart leak detectors that catch water leaks as soon as they occur, preventing costly damages like apartment flooding.

Disaster Mitigation: Property Fires

In recent years, an estimated 109,700 multifamily residential building fires were reported within the U.S. annually.

This resulted in an estimated $1.4 billion in property loss.

However, by providing managers with real-time smoke alerts, smart smoke detectors help to eliminate the risk of fire-related expenses.

These real-time smoke alerts are synced to a helpful app that can be viewed even if the PM is not on the property.

Limiting the excessive costs due to fire damage is just another example of how technology improves property managers’ net operating income.

Disaster Mitigation: Burglaries and Break-Ins

According to the FBI, there were 346,312 daytime burglaries in 2018.

It’s also a well-known fact that residents are particularly vulnerable to break-ins and burglaries during the summer and holiday seasons.

As PMs are responsible for so many multifamily units (and even multiple communities in some instances), it’s simply not possible for them and their staff to be everywhere at once.

Additionally, a community’s vacant (or under-renovation) units are also vulnerable to break-ins.

Even if it were possible to monitor every unit in a multifamily community in person, the staffing costs to do so would greatly decrease NOI.

On the other hand, smart entry sensors do this same work.

This easy-to-install technology enables PMs and tenants to remotely access and monitor the status of their unit(s), oftentimes through one single app.

The resulting real-time response and notifications when motion is detected protect the property from unwanted intruders, driving down NOI costs in the process.

Tenant Retention

For a property manager, retaining tenants is just as important as attracting them. Research shows that each retained resident is worth an additional $900 each year, and that is in addition to their rent payments.

Knowing this, it is important for property managers to retain tenants and avoid the expenses necessary to attract new tenants and to execute leases. These expenses are one of the many”money-pit” expenses, which are defined as any (avoidable) expenses that drain a property manager’s (PM’s) financial resources. Read our full article on retaining tenants, avoiding “money-pit” expenses, and other methods of improving your property’s NOI.