The Smart Technology Guide for Property Owners and Community Managers
Gen Y and Gen Z Will Spend More on Smart Apartment Technology.
We live in a time of change — generational and technological. These changes can affect many current markets, including real estate. This guide explores how Gen Y and Gen Z are driving rental properties to adopt smart technology that addresses their top three concerns, which are: Security. Safety. Convenience.
The guide also shows building owners and community managers how to get started with smart IoT-enabled technology and make their properties a magnet to attract high-value residents. Let’s get started.
- Generations at-a-glance
- Who Gen Y is and what they value
- Who Gen Z is and what they value
- What owners and managers need to know about the internet of things (IoT)
- How the IoT provides value to owners and managers
- How your peers are using IoT-enabled technology
- How to introduce smart technology to your property
The dynamics of change in 2023 fall into two buckets. The first is the change in generations. While Boomers and Gen X are still a factor in the rental market, the number of Gen Y and Gen Z renters will increase in the coming years. And, as more Gen Zers grow up and graduate from college or find jobs, their presence in the rental market will become more known.
The other change is the transition to smart technology enabled by the internet of things (IoT). We call devices smart because they can connect to the internet. In other words, smart equals connectivity. Gen Y and Gen Z grew up with this connectivity; for them, smart devices and smart home amenities are a given.
The use of IoT-enabled technology in real estate will especially impact how Gen Z renters choose a residence. In fact, Gen Z renters value smart tech amenities so much that they’ll pay up to $30.00 more a month in rent to get them. So, with generational change comes a change in the type of amenities that Gen Z renters want.
But this guide is also about opportunity — the opportunity for property owners and managers to attract and keep high-value renters by offering the smart tech amenities that today’s renters want.
IoT-enabled tech in real estate is also an opportunity for property investors and managers to dramatically improve their workflows. By applying IoT-enabled tech to properties, they can automate repetitive tasks, work offsite and monitor the safety and security of a property at any time, from anywhere.
Smart Apartment Technology: Generations at a Glance
Gen Y and Gen Z renters are driving the demand for IoT amenities in rental properties. The big takeaway from this chart is that Gen Y (millennials) is the demographic with the greatest number of people at 71 million. And of that pool, 45% are renters.
While Gen Z (aka Zoomers) with a population of 23 million (about the population of New York) has fewer people than Gen X’s 41 million, Gen Z’s demographic cohort is still growing. Researchers have yet to assign a generational end date for this group.
When you compare the growth potential of this demographic and factor in that 27% of Gen Z are renters, Gen Z, and the slightly older Gen Y are driving the demand for IoT-enabled, or smart technology, in rental properties.
Who Is Gen Y and What Do They Value
Let’s take a closer look at Gen Y, aka millennials. They were born between 1977 to 1994, making them between the ages of 28 to 45. Gen Yers are called ‘digital natives’ because they have grown up in a world where they were surrounded by technology at a time when technology developed at a faster rate than ever before. Subsequently, every move they make is accompanied by technology and gadgets.
Gen Y By the Numbers
86% of Gen Y respondents would be willing to pay more per month for a unit with remote-controlled devices or automated features.
55% of Gen Yers are likely to pay more for high-tech door locks.
61% of Gen Y respondents are more likely to rent a unit because of electronic access such as keyless entry.
63% of Gen Y would move out due to a lack of security.
When one in five Gen Y residents say that they feel unsafe around their community, owners and managers are losing in the race to attract and keep high-value residents. They are also missing out on an opportunity to charge higher rent for the IoT-enabled amenities that Gen Y is willing to pay more to get. You’ll see this concern reflected in the top five IoT-enabled amenities that both Gen Y and Gen Z value.
Who Is Gen Z and What Do They Value?
Gen Z, also known as Zoomers, was born in 1997 onward. They are currently between the ages of 18 – 24. The oldest of this rising generation turned 25 in 2022.The smartphone launched in 2007, when the oldest Gen Zers were 10. By the time they were in their teens, the main way that Gen Zers connected with the web was through mobile devices, Wi-Fi and high-bandwidth cellular service. Gen Z grew up with social media, constant connectivity, and on-demand entertainment. It’s no surprise that a little over 60% of Gen Z apartment residents felt that community Wi-Fi was more of an expectation than an amenity. That’s because Gen Zers like to connect from anywhere, whether it’s somewhere on the property or at a park.
Gen Z By the Numbers
91% of Gen Z apartment residents say high-speed internet is an important factor when considering an apartment.
75% of Gen Z apartment residents said that Wi-Fi should be pre-installed.
Convenient connectivity is so important to Gen Zers that they will spend up to $31.00 more a month on rent to get it. Today’s renters want an IoT-enabled approach to home and community spaces. That’s because Internet connectivity is what makes a device, like a smartphone, smart. And smart technology is what Gen Zers demand.
1 in 4 Gen Z residents would pay over $31.00 a month more to get the high-tech apartment they want.
Gen Z is the only generation to record an increase in renting activity in 2020 compared to 2019, according to the most recent data available. Keep in mind that this was at the height of the Covid-19 pandemic. With an increase of 22%, Gen Z plays a big role in the revival of urban centers, once considered doomed due to the pandemic.
What Owners and Managers Need to Know About the IoT
We’ve introduced the generational demographics, in particular, their preferences when it comes to IoT-enabled amenities. Now, let’s turn our attention to the IoT and the value it brings not just to residents, but to property owners and managers.
“The IoT integrates the interconnectedness of human culture — our ‘things’ — with the interconnectedness of our digital information system — the internet.” – Kevin Ashton, often called the Father of IoT
Who is Kevin Ashton and why should you care?
Ashton is a British-born, serial entrepreneur now associated with the MIT Media Lab, and first coined the phrase in 1999 when he was theorizing about the idea of adding data to everyday things.
But this next part is super cool. Ashton thought that if a wireless network could pick up data on a credit card, it could also snatch data off a chip on a product package. This idea is called RFID tracking, and you may be familiar with it. RFID tracking uses radio-enabled chips to track inventory for every kind of business. That’s why Kevin Ashton is kind of a big deal.
The Language of IoT
There are a lot of words and phrases associated with the Internet of Things. So, let’s clear away any confusion with some helpful definitions.
Definitions of IoT-Related Terms
INTERNET OF THINGS: IoT is the internet connected to devices like a refrigerator, thermostats, and even other software. In other words, IoT is the internet connected to things.
SMART TECH: Smart tech is any device, like your smartphone, that can receive and send data via the internet.
SMART ACCESS CONTROL: Smart access control is internet-connected software plus video intercom hardware with 2-way audio. It allows owners and residents to manage requests for building entry.
SMART BUILDINGS: Smart buildings deliver actionable information about a building itself or a specific room inside it so that owners or tenants can better manage it.
Many Multi-Dwelling Units (MDUs) already offer some IoT-enabled devices.
Most use a wireless connection.
How the IoT Benefits Property Owners and Managers
The release of the first iPhone was the unofficial start of connecting consumers with the computer in their pocket that then connected to other people, processes, data, and even other devices.
This is where the Internet of Things comes into play. IoT is the name for this human-device connection, and it is particularly relevant to owners of multi-family communities and the people they hire to manage them. That’s because IoT enables smart tech.
In plain English, smart tech is a software application that is hosted on a secure internet server. You may have heard it described as “the cloud” or cloud-based software, even web-based software. They mean the same thing. Here’s the important thing. Cloud software can connect with other software and devices like video intercom hardware, for example.
But, it’s cloud software’s ability to interact with devices without human intervention that delivers tremendous value to owners and managers.
Top 4 Benefits of Access Management Cloud Software
Automation: The internet transforms what were once manual (analog) tasks and automates them by making them digital. For example, suppose you have telephone intercoms for your access control system. In that case, you go onsite to the building itself and ‘manually’ update the resident directory every time a new tenant comes on board or every time a tenant departs. If you’ve done this, or are doing it, you know how time-consuming this is. Cloud software, like myQ Community, automates this process. In other words, it’s done without human intervention.
Collaboration: Resident information can be updated and shared in real-time with others, like an area supervisor or employee. If you’ve used Microsoft Teams, you understand how documents can be shared and accessed. Access control management is like that. Everything is updated in real-time and the changes made by a colleague, or an employee, show up automatically.
Visibility: Because cloud software updates in real-time, you always have the most current data available. For example, when it comes to video intercom access control, you can see live stream video clips of who has entered a building. You can also review video logs of activity at the entrance to a building.
Security: In this specific instance, security refers to the security of your data. When compared to an on-site server, the cloud has far more data security layers and certification protocols to keep your data safe. This is important, not only to protect your proprietary data but to protect the sensitive information you have collected about each of your residents
How Property Owners and Managers are Using IoT-Enabled Technology
34% of MDU managers reported offering smart home devices to residents.
57% report having a lighting control system in their largest property.
26% have an energy management/monitoring system.
13% have a smart home device or IoT platform hub.
44% of properties with energy management systems incorporate smart devices such as thermostats and lighting for remote monitoring and control.
IoT-enabled Access Controls Your Peers Want
Here’s how property owners and managers ranked smart access control features they would most like to have in a pop-up survey with the American Apartment Owners Association (AAOA).
If you’re ready to attract high-value renters, now’s the time to get started with smart technology for your property. Here’s why.
The Future of IoT in Real Estate is Here.
Now’s the time to invest in the future success of your property and its ability to attract and retain Gen Y and Gen Z
renters. So, have big plans. But start small.
How to Get Started with Smart Technology
Invest in a property-wide Wi-Fi network. Work with your internet service provider to map a coverage plan that works for the entire community, including pre-installed Wi-Fi in each unit.
Upgrade your property with affordable smart items like locks, thermostats, or a smart access hub.
Take your property to the next level with smart technology solutions that enhance safety and security while providing the modern experience residents desire.
- Schlage’s Industry Insight Survey
- What Apartment Renters’ Value
- Rent Cafe
- Simplifying the IoT Edge
- IoT & the Future of MDU Wi–FI