Between rising labour costs and operational expenses, the apartment industry has been leaning on tech to make their teams operate more efficiently. For portfolio landlords across the United States, a focus on efficiency makes sense… greater efficiency leads to higher NOI margins and predictable operating results, a win for all stakeholders. Every NMHC Top 50 owner and manager is actively investing in innovative solutions that provide superior expense control, increased resident retention, more leads and higher conversions. The rise in real estate technology startups are leading the charge, offering a variety of enhanced systems and processes that are redefining the traditional management of multifamily assets across the country.
Real Estate Technology Sector
Historically, most residential real estate tech (also known as RE Tech, PropTech, RE Technology) focussed on providing users/renters with information and landlords/agents with leads (Zumper, Nestpick, Apartment List). Today, we see marketplaces (RadPad, Homie), leasing-management software (Nestio, Flip), property management platforms (Rentify, Avail), and even virtual viewing solutions (Floored, HouseLens). In fact, CB Insights breaks the residential real estate tech sector into 15 categories.
The Residential RE Tech market map (image courtesy of CBInsights)
The emerging category of “On-Demand Services” is one that gets me most excited and has the potential to have the largest impact on the apartment industry’s bottom line. In today’s world, consumers have little patience. Companies that offer instant gratification by harnessing the power of technology and on-demand labour have proven to dominate countless industries. We’ve seen Uber grow into a mammoth dominating the passenger transport industry in ways one could have never imagined. Postmates is another great example of a service that has transformed the local courier space offering convenience and instant gratification to its users. It’s happening everywhere, and the apartment industry is one sector that is poised to benefit the most. One way apartment owners and managers are doing this is by enabling on-demand property tours.
On-Demand Property Tours
According to a report released by the Naked Apartments, 48% of renters want to view an apartment the same day. The report found that the majority of renters wanted their viewing during lunch and after work (evenings). As well, Saturdays were the most popular day for viewing apartments but their was fairly consistent demand 7 days a week. The speed of access to a property can be a decision-making factor for many renters. Naked Apartments and Stable.work are two startups that connect renters who want to tour a property with nearby agents ready and eager to service the request.
New York based Naked Apartments has gained steam in the rental market by letting renters schedule “showings on demand”. In-market renters send requests to view a listing, which is then pushed to Naked Apartment’s network of real estate agents; the first to respond gets the lead at a cost of $5 but has an opportunity to earn the commission on a signed lease which could be upwards of $2,000.
Stable.work, a Vancouver-based startup currently operating in both Seattle and Denver, has gained some impressive traction in a very short period of time. When an apartment leasing office is closed and during peak periods when on-site teams are stretched, leads naturally fall through the cracks. Before Stable.work, there was no good way to service the overflow without overpaying for labour in the form of full-time and part-time employment contracts. Stable.work connects large portfolio landlords to vetted local professionals looking for temporary or part-time work. The platform lets portfolio landlords build a team of on-demand leasing agents to optimize coverage at their rental communities.
Rather than staffing ‘Just In Case,’ which inevitably results in paying for a lot of employee downtime during slow days and off season, Stable.work provides “On-Demand Coverage”. With Stable.work, showings are no longer restricted to office hours. Renters can request an immediate tours 7 days a week (evenings & weekends included) by hailing a Stable leasing specialist who’s available in the area.
With Stable.work, Apartment managers can also post short-notice shifts to their team of on-demand workers in as little as 1 hour increments. Rather than committing to a full-time salary when rental demand may not justify the new hire, Stable’s unique pay-per-use labour model ensures portfolio landlords never pay for downtime.. only for work performed.
The growing expectations of renters to view properties at their convenience makes traditional staffing models highly inefficient and unnecessarily costly given the possibilities afforded by new technology. We’ve seen the proliferation of on-demand services like Uber across many different industries worldwide. For apartment operators, where the growth in wages is set to outpace revenue by 2020 (IBIS World 2017 Apartment Industry Research Report), On-Demand services have the potential to revolutionize the entire industry.