The 5 fastest-growing areas in proptech for apartment property management

September 20, 2024

TABLE OF CONTENTS

If there’s one thing we can count on in 2024, it’s that technology will keep evolving to solve more and more problems in our world. It’s even beginning to take on an increasingly bigger role in industries that historically haven’t been software-focused. Multi-family real estate is one example. 

Over the past several years, there’s been an explosion of innovation in the property technology space, also known as “proptech.”

While we’ve already seen major growth in market value, this trend is only going to continue over the next 10 years. In the next decade, the market size is projected to quadruple from $35 billion to $133 billion. 

So… as a property manager or owner, why should you care?

Whether it’s improving operational efficiency, generating revenue, or attracting new residents, there’s no end to the ways the latest technology can benefit property managers. These enhancements can be the make-or-break factor in a community that stagnates and one that shines, and the multi-family professionals who keep their finger on the pulse of the latest trends and technologies are best positioned to make their property stand out.

That being said, you may not have the time (or interest) to scroll through all of the latest tech news to search for mentions of proptech, and even if you did, how can you determine what’s a fleeting trend and what’s real innovation?

Luckily, we’ve nerded out on it all for you and have uncovered the fastest-growing areas in proptech. Aside from table stakes property management software (expected to grow from $24.18 billion to 52.21 billion market size between now and 2032, by the way), here are the areas you want to keep your eye on and perhaps begin to implement now, if you haven’t already. 

1. Smart home technology

While smart home technology has been growing in popularity in single family homes for nearly the past decade — just think of how many of your friends or family members have a Google home or Alexa — it’s starting to become table stakes in multi-family, too. 

In short, smart home technology includes devices and systems that automate and enhance the living experience in rental units. 

The numbers

In 2024, the Smart Home market is projected to reach $154.4 billion, and over the next 4 years, it should have an annual growth rate of 10.67%, meaning the market will likely be valued at $231.6 billion in 2028. Household penetration — i.e. the number of households with smart home technology — is expected to be at 18.9% in 2024 and should explode to 33.2% by 2028. 

Many current studies show that the availability of built-in smart home technology is already one of the main considerations that renters have when looking for a place to live. More than 75% of residents indicated in a survey that they would pay more for a package of 3 smart home amenities. 

The growth of this market points to a clear opportunity for apartment complexes to get ahead of the growing expectations that current and prospective residents are likely to have. 

Ways to include smart home technology at your property

Some resident-facing applications for smart home technology include:

  • Smart locks and access control systems
  • Smart thermostats
  • Smart lights
  • Smart leak sensors

These use cases can both increase tenant satisfaction and retention, since they are able to take advantage of a more modern, user-friendly system, as well as increase security for the property. 

These benefits can extend to operations, as well. Property managers and owners can use smart leak sensors and energy management systems to help optimize energy use and catch leaks before they become much more costly. This delivers the potential to reduce water damage repair costs by 70-90% because it allows for more preventative maintenance. 

Smart locks also bring some benefits for owners and management because they eliminate re-keying expenses, which are on average $50-100 every time a unit turns out. This can add up to thousands of dollars each year, depending on how many units your property has. 

2. Parking management technology

Parking is one area of property management that has been slower to experience a renaissance. Too often, we see all aspects of parking operations handled between spreadsheets, pen and paper, and spoken word between team members. Up until now, there were no options to modernize operations. 

The tide is slowly beginning to change, though. 

The numbers

The sheer demand from residents alone is strong enough to prove the great need for better parking management technology. Smooth parking operations consistently tops the list of what residents care about most in a potential home. A recent study found that 68% of residents considered controlled access parking an essential when deciding which apartment to sign a lease. 

Old-school systems simply don’t allow for the speed and flexibility needed to keep parking running smoothly.

Innovative parking management software, on the other hand, makes it possible for both residents and property staff to enjoy an easier and more intuitive parking experience. 

Use cases for parking management technology at your property

  • Easy parking reservations with a user-friendly mobile app, including both long- and short-term parking
  • A staff dashboard to view all parking records and generate reports in real-time
  • Mobile gate access to enable entry only with a valid parking reservation, including license plate recognition that can help with access control and security for your property
  • Mobile enforcement to submit problem reports and instantly provide solutions to unauthorized parking.
  • Better EV charger management that enables more efficient and reliable use of this oft-coveted amenity at your building 

The benefits of a technologically advanced approach to parking can’t be understated. Parking technology can:

  • Increase revenue by improving utilization and putting idle spots to use (Parkade customers experience an average of a 30% increase in parking revenue)
  • Boost resident satisfaction by offering easier and more parking for residents and guests
  • Streamline operations, giving staff back hours of time per week

3. Virtual and augmented reality (VR/AR)

Gone are the days where Virtual Reality (VR) and Augmented Reality (AR) is just for video games. It’s now beginning to make its way into more professional environments, including multi-family real estate. And in fact, there’s a real possibility that AR/VR-supported leasing operations may become table stakes sooner rather than later. 

The numbers

By 2025, the global market size of augmented reality in real estate is projected to reach $2.6 billion. COVID is to thank for the start of this boom, due to the necessity of a solution for contactless or remote tours. 

But the need didn’t go away once COVID surges began to go down. 

In a recent survey, 95% of renters would be more likely to rent a property if they have access to a 3D virtual tour on their website. And 90% of that same group surveyed indicated that they would be more likely to choose a property with a 3D tour available when compared with a property that doesn’t. 

How to incorporate AR/VR at your community

As indicated above, virtual tours are what are really driving this trend. Many properties are already using technology like Matterport or Zillow 3D Home to create immersive virtual tours. While in-person tours are not likely to go anywhere anytime soon, these online tours offer more flexible options to accommodate a wider range of needs. 

Tina West, executive vice president, Client Advisory Group, SRG Management said of this opportunity: 

“Digital is the new curb appeal. They can do their homework to narrow down their selections. Where they physically toured 10 communities before, they now cut it down since they have delved in online first.”

Offering these virtual tours can help to reduce vacancy rates by helping prospective tenants make quicker decisions. On top of that, it can also lead to cost savings due to the reduced need for physical staging and in-person viewings, as well as a competitive edge for marketing. 

There are also growing opportunities for AR/VR to be used on the back-end of property operations, too. Many properties are taking advantage of augmented reality to assist them with interior design work and space planning, which is critical when trying to compete in luxury markets, either for furnished tenants units, show units or common spaces. 

4. AI insights and data analytics

We can’t talk about technological innovation without talking about Artificial Intelligence. There are several ways that AI is playing an increasingly larger role in the multi-family property industry, helping to deliver more efficiency and enable better data-driven decision making. 

The numbers

In 2023, the global market for artificial intelligence in real estate was valued at $2.1 billion. Between now and 2030, it’s projected to expand to $22.5 billion, demonstrating a 27.9% compound annual growth rate. 

While there are several applications for AI in real estate, data analytics delivers the most impact for property managers and owners, both in the current and future state of the technology. 

AI use cases in real estate

As just stated, there are a variety of AI use cases that are not data related, such as marketing automation, virtual leasing agents, and automated tenant screening, those are likely to become table stakes as we move forward in the next decade or so. 

Here are the more innovative data-driven use cases:

  • Predictive analytics for rent pricing: Properties can leverage AI-based tools that use data to optimize their rental pricing strategies, ensuring they maximize revenue by staying competitive with properties around them. 
  • Market trend analysis: Managers and owners can leverage platforms that analyze local market conditions to help them make strategic decisions about renovations, pricing, and amenities. 
  • Amenity usage trend tracking: One interesting potential use of artificial intelligence is employing people-counting sensors to gather anonymous data on how much tenants are actually using various amenity spaces to aid investment and renovation decisions.

By using AI as a tool for better decision-making, properties are able to improve their profitability, reduce risk, and better allocate their resources. 

5. Resident-centered fintech

Technology in the rental space is even making its way into the hands of residents. To illustrate this, we thought it would be fun to point out an interesting startup to provide some inspiration for all of the new and evolving possibilities that are emerging in the proptech space. 

Stake is a fintech startup that is a win/win for both residents and landlords by incentivizing on-time rent payments or early renewals with cash-back rewards. While this is standard in other industries like airlines and retailers, it’s an interesting new development in multifamily real estate. 

Rowland Hobbs, co-founder and CEO, explains how the dashboard works: 

“It becomes a pretty simple equation: here’s how much cash back to get the action that you want from your renters.” This gives landlords the option to really customize their incentives to address any specific pain points when it comes to on-time payments or renewals. 

This is just one example among an influx of innovative tools that benefit renters.

To continue to thrive, you need to keep up with innovation

While your team may have the heart to provide a great face-to-face experience, if you don’t scale your processes to take advantage of the latest technology, you will likely struggle to keep up. 

By keeping tabs on all of the latest innovation happening in your industry, you’ll be well-positioned to lack onto competitive advantages early.

Inspired by new technology but having a hard time getting budget approved? Check out our blog post with expert advice about how to make the case for new proptech.

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BlogParking Management Software ROI

Investigating the ROI of parking management software

With parking being one of the largest drivers of ancillary revenue at multi-family properties, it's imperative to get it right. But just how much return can you expect from parking management software? Read on to find out.

Published: August 7, 2024
Hannah Michelle Lambert
Content Writer
Boosting ancillary revenue is often a major focus for property managers and owners alike.

Especially given that the baseline forecast for rent growth is slightly lower this year than average (2.5% versus 2.9%), properties are increasingly looking for ways to raise their bottom line without compromising the quality of living for their residents. 

One often overlooked but significant opportunity lies in parking. If managed well, it’s a potential treasure trove for additional revenue. But that’s only if it’s done well. 

Parking tends to be one of the biggest thorns in the side of a property manager. Because traditional systems — like spreadsheets and rentable items — are not built to handle tenant parking efficiently, teams aren't able to reap the full benefits parking has to offer as an ancillary revenue source. As soon as a team makes the decision to invest in a proper parking management system, the benefits often more than pay for themselves.

In this guide, we will explore those benefits, touching on both the financial and operational upside of a solid parking management strategy.

We’ve combed the data from all of our clients to identify the exact numbers to prove that there truly is ROI in parking management systems like Parkade. 

Understanding parking management

Before we dive into the numbers, let’s first establish a baseline of what exactly parking management entails. As any property manager will tell you, it involves much more than just hanging a tag on a resident’s car and calling it a day.

The key components of a parking management system are:

  • A system of record to track parking assignments, lease lengths, vehicle details, and parking prices, ideally integrated with your PMS.
  • An enforcement strategy that ensures parking rules are clear and establishes consequences (typically fines or towing) when someone breaks them.
  • A method to pay for parking, whether it’s bundled in with rent (which we don’t recommend) or paid for in a separate system.
  • A self-serve system for residents and guests to book long or short-term parking. 
  • If there is a gate on the property, provisioning and deprovisioning of gate entry should also be considered in the parking management strategy. 

The old-school way of addressing these needs isn’t cutting it anymore. Many properties are still using manual processes, like an Excel spreadsheet, rentable items, or even a physical piece of paper to keep track of their parking. 

And far too often, properties are relying too heavily on staff members to handle parking matters that take up a significant amount of time, like enforcement or guest parking.

Moreover, there’s one point that just can’t be ignored: If you’re still using old-school parking management systems like spreadsheets and rentable items, you’re leaving money on the table. 

So the parking management we’re discussing here that delivers positive ROI is a technology-led solution that automates all aspects of parking operations, improves resident experience, and unlocks new revenue streams.

Setting the stage: Residents value good parking

Delivering on resident expectations should be a main priority for any multifamily property, and parking is one area of the resident experience that is especially critical to consider here. 

65% of property managers cite parking as a top concern among residents. Whether it’s for existing residents or prospective residents, providing a simple, reliable, and flexible parking solution has a direct impact on the success of your property. 

Part of this is due to reputation. Properties have reported a 44% increase in their reputation scores after fixing their parking problems. And this boost in a reputation score can trickle into several different areas, boosting not only the number of new residents, but also leading to more renewals from existing residents.

But we know you want the hard dollar amounts, so let’s talk more about some real-world outcomes that Parkade's parking management software delivers. 

So, what do the numbers say about the ROI of parking management software?

Long-term net parking revenue for stabilized buildings

Once properties implement a system to help them optimize pricing and management of long-term parking, they see immediate gains in their long-term parking revenue. The average 6-month increase in net long-term parking revenue for the cohort of 7 properties we sampled was 24%, translating into thousands of extra dollars. 

Long-term net parking revenue for lease-ups

Better parking management also empowers properties to far outperform their projected revenue from long-term parking when they’re in the lease-up phase. 

On average, properties from the cohort we sampled estimated that they would bring in $15,925 on average from long-term parking revenue per month. But thanks to Parkade helping them optimize their parking strategy, better enforce their parking rules, and keep a better record of who is parking where, the average revenue from long-term parking was $23,450 on average, which is a 47.3% increase from the estimates in their pro forma. 

Total net parking revenue for stabilized buildings

For buildings that are already at full occupancy, the average increase in parking revenue sits at 31% once they implement Parkade’s parking management solution. 

Revenue metrics for lease-ups

The best time to implement new parking management systems is at the inception of the building. Getting parking right from the beginning ensures that you are maximizing total parking revenue from day one, as well as establishing a positive reputation around parking. Many properties underestimate the revenue from long-term parking and may often leave out potential short-term parking revenue altogether. 

When a few properties we worked with during this phase were estimating parking revenue at the start of their lease-up, they estimated around $35,000 on average. But the results, since they decided to go with Parkade right from the start, blew those numbers out of the water. In reality, they were able to bring in closer to $58,000 on average, which is a 66% increase from the estimates.

Short-term parking: An opportunity

The boost in revenue continues to be apparent when you zoom out to look at short-term parking, too. Short-term guest parking can be one of the most underutilized revenue streams, and represents a huge opportunity for multi-family properties to tap into. However, it's historically been very difficult or impossible for properties to see this revenue without parking management software that automates the process.

Especially in popular areas, like city centers or near shopping malls and sporting arenas, there’s often a high demand for short-term parking. When properties put a system in place to monetize this guest parking, they can unlock hundreds or even thousands of extra dollars per month. 

Automating guest parking

Without a good system in place to manage parking, many properties often leave guest parking as a free-for-all (meaning they don’t make money from it), or if they do attempt to monetize guest parking, it turns into a massive beast to handle. 

Erica, a property manager at Thrive Properties, told us about her pre-Parkade experience with guest parking, preventing them from delivering on a key resident need: “There was no world where we were doing short-term parking by the hour or even by the day because there was just no way to manage that.”

If you have a complicated or inconvenient system for guests to reserve parking, especially one where they have to walk into the office during office hours, guests are often more likely to try to get away with not paying for parking. (And if you don’t have a great system to enforce parking, they may very well get away with it).

With the right parking system, you’re able to give guests a flexible, 24/7 solution, removing any previous barriers that may have caused them to break the rules out of convenience. 
Maximizing guest parking availability

Another way that manual parking management may stand in the way of effectively monetizing guest parking is the inability to accurately track how many spots you have available for guests to reserve in the first place. 

Taylor, the property manager at Strata and Venue, shared her experience of desperately needing more guest parking and discovering they had a full 50 more open spots than they thought. 

“We actually had way more spots that we could have used for guest parking, but we didn’t know that because of the way we were using our parking system. Not to mention, we wouldn’t have the system to leverage them without a Parkade.”

When your parking management system gives you an accurate, real-time view of available spots, you can leverage guest parking to its full capacity.

Utilizing idle parking spots

A reliable parking-management system also allows you to make the most use of every single spot available. With technology that uses smart inventory management, properties can release idle or unassigned parking spots into the system for short-term use. So spots that would have otherwise been sitting empty between leases can suddenly be leveraged as an extra revenue-generating spot in the meantime. 

Net revenue for short-term guest parking

When properties have a great system to implement paid guest parking, without putting too much strain on their staff, they immediately see a boost in revenue.

They’re able to turn an operation that was perhaps bringing in no money — or some revenue, perhaps at the expense of staff time —  into a significant revenue source with little-to-no staff involvement. 

On average, Parkade customers experience a 303% increase in their guest parking revenue after Parkade fees. And there were some properties that saw almost a 400% increase.

Opex (operational expenses) savings

When handled manually, parking management can steal hours from on-site property management teams every week. Between fielding requests or complaints from residents, tracking down parking records, walking the lot to enforce rules, handling guest parking, and manually inputting rentable items, parking can quickly balloon into one of the most time-consuming tasks for staff.

Parking management software can automate away a lot of the most tedious aspects. For example, Parkade gives residents self-service access to reserve and pay for parking (while allowing for any rule sets the property wants to enforce), provides hands-off enforcement support, and even automates gate access via the app so that teams don’t have to worry about distributing or replacing clickers. 

Properties have seen that the time teams no longer spend on parking leads to a direct decrease in operational expenses. As a result, they can redistribute those team members' time to more meaningful tasks.

On average, we’ve seen properties decrease their operational expenses by $60,000-$100,000 from savings on parking operations alone. This means that they were able to save what’s equal to a full-time employee’s salary. 

Annual NOI improvement

All of the revenue metrics mentioned up until this point have been after Parkade's fees. 

When you roll everything up together — both the increase in revenue (after fees) and the opex savings — investing in parking management software has an incredibly positive impact on annual Net Operating Income (NOI).

Whether teams are looking to calculate their property value, secure financing, make operational decisions, or pitch to investors, NOI is one of the most critical numbers to boost. 

By coming at NOI from both sides, in terms of opex savings and revenue generation, parking management technology is extremely low-hanging fruit when it comes to boosting NOI. 

At the Parkade properties we surveyed, teams saw anywhere from a $66,000 to $126,000 improvement to their net operating income from parking alone. 

While parking may not seem like it deserves to be the biggest priority for many properties, the numbers tell a different story. By investing in a proper parking solution, properties are able to significantly improve upon all of their business goals, whether it’s boosting revenue, streamlining operations, improving resident experience, or all of the above. 

About Parkade

Parkade is the #1 parking management software for multi-family buildings. With our resident-facing app and staff dashboard, parking runs itself. Your team will boost revenue, reduce time spent on parking, and improve experience for residents and guests, all without lifting a finger.

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