The inaugural MICA conference was held last week in Atlanta, GA — bringing together a unique group of industry thought leaders to discuss how new technology will impact the future of the multifamily industry. In an industry notoriously slow to embrace new technologies, the energy of those that attended was inspirational. Emerging innovations in tech and finance will undoubtedly change the direction of multifamily property management and, ultimately, how the growing number of renters live their lives. Here are a few of our takeaways:
Innovation Will Improve Access to Capital
When you hear Blockchain technology you may first think of the tumultuous reputation of the popular cryptocurrency Bitcoin, but there is much more to it than that. Blockchain is a technology with the potential to innovate many more industries than cryptocurrency. Blockchains permanently record transactions between parties through a global decentralized network of computers and allow the free movement of finances and information, but the property management industry is pioneering its own use cases – transparent record keeping and access to capital. The growing popularity of “smart contracts” are allowing multi-step transactions related to property ownership and financing to take place globally. A property can, in theory, receive investment funding, distribute and modify articles of ownership, and even verify the identities of investors and renters alike. The end result can mean greater access to both capital funding and liquidity for investors. There still are a number of regulatory issues that need to be resolved in the United States before funding projects via blockchain technology becomes ubiquitous, but as Margaret Rosenfeld stated, “In 5 years, this is how all money will be raised.”
Innovation Is Unlocking New Revenue
There was a lot of discussion around how to shift the way the industry thinks about the utilization of property assets and ancillary income. Many of these services require property managers to reevaluate long-held assumptions about ownership of space, occupancy, and the willingness of residents to participate in the peer-to-peer sharing economy. Security will always be an important concern for residents, but many are open to ideas and services in which they gain value — and that, in turn, will boost revenue for communities. WhyHotel operates a licensed hotel out of multifamily communities during lease-up, slowly handing back inventory to the community as it is needed. WhereiPark aggregates empty parking spots of communities and nearby businesses and makes them available to rent via their mobile app. AirBnB allows residents to rent their home while they travel, providing a new revenue stream to both the resident and the community. In each of these cases the hesitation was that the resident would not be open to sharing, however, findings showed that is not the case and value for both parties is unlocked as a result.
Innovation Is Improving Decision Making
With the increased adoption of the internet-of-things, CRM collecting customer data, and 3rd party providers supplementing additional data, multifamily has no shortage of information to use when making critical business decisions. However, implementation and usage of these platforms can be as much of a challenge as identifying which data is most useful. The challenge of the next few years will be distilling all these reports into useful insights that can create recommendations for owners and managers to improve the efficiency of their operations – and increase NOI. In a candid discussion among a small group of industry leaders, many agreed that this is one of the biggest opportunities for property managers in the next few years.
Data optimizations and insights were also a hot topic at OPTECH 2018 this past year — read our take on how “Multifamily is Swimming in Data.”
Innovation, the Time to Test is Now
Multifamily is in a time of growth, but a downturn will come eventually – unfortunately it always does. When it happens, multifamily property managers will find themselves in an environment where everyone will be looking for areas to cut cost and the appetite for new technology will decrease. Now is the time to identify opportunities for technology to make a positive impact on your NOI so that your team has the data needed to justify the technology stack when times get tough. Don’t wait for the next innovation, build a process for including innovation in your company’s culture now.