Multifamily Executive: Tech Tools Could Spur Quick Economic Recovery for Multifamily

Multifamily Executive: Tech Tools Could Spur Quick Economic Recovery for Multifamily 2020-05-26T15:48:40+00:00

Project Description

While it’s unclear when the economy will return to a semblance of normal, optimism from the apartment industry is certainly justified. The multifamily sector has always proven to be resilient, and it wouldn’t be a stretch to predict that it will recover more rapidly than many other industries.

In recent years, the industry has become especially adept at developing tech tools to prosper. Whether it’s innovative leasing solutions, maintenance communications platforms, or advanced data analysis tools, multifamily continues to invest heavily in PropTech to elevate the industry.

The social-distancing environment has hastened the already robust demand for digital solutions, particularly those that enable activity from beyond the leasing office. For prospects, that includes remote leasing, virtual tours, and other ways to view and connect with a property remotely. For site teams, that includes intuitive communication tools, integrated data solutions and additional enhancements that can help streamline operations.

“Having a workflow platform that enables us to remain in constant communication with our residents and instantly update our residents has made an incredible difference,” says Emily Mask, associate vice president of operations and revenue for ECI Groups. “When the communication is instant and transparent, it makes the communication that much better. If you can focus on customer service, especially in a time of crisis, that’s going to yield better results. For us, our attention to communication and customer service has even led to improved collections.”

While workflow and resident communication platforms, such as the ECI-preferred SightPlan, have become increasingly paramount during the pandemic, so too has the need for visualization tools. The industry has gradually introduced virtual tours and interactive maps that allow prospects to see apartment homes within the context of the community, but now the value of such visualization tools has ascended with most teams aiming to attract prospects while they stay home.

Prospect search activity is ramping up after an understandably slow start to the leasing season, although many remain reluctant to visit a property on-site. When researching their next home, however, 2D online representations of a property no longer satisfy renters’ standards. Research from Engrain indicates that leasing conversions are two to three times higher when prospects can see and understand where an apartment is located.

Additional tech-based solutions are assisting the industry during the pandemic and have the potential to help teams resume operations afterward with as few hiccups as possible. Additional challenges—and potential tech-based solutions—include:

Rapid Verification

Something tech has been slow to solve is the prospect verification process. While credit and background checks can be done in reasonably rapid fashion, the task of verifying account balances—or whether an account genuinely exists—significantly slows the process. That’s what makes tools such as Entrata’s forthcoming advanced account verification feature invaluable when quickly trying to determine whether an applicant has furnished valid information.

“The ability to immediately verify a bank account as valid, and whether account-balance information is accurate, creates a multitude of benefits for on-site teams,” says Nicole McLemore, national marketing operations manager for Lincoln Property Co. “It ensures the prospect is paying with legitimate funds and virtually eradicates the chances of costly payment returns. It also helps the team filter out potentially high-risk prospects from ever completing the application and becoming residents.”

Instant verification also makes life easier for prospects. Once their account information is approved, they can utilize ACH payments as certified funds to pay application fees and rent. On-site teams, meanwhile, can move on quickly from unverified prospects.

Missed Calls

In the digital age, many apartment operators deprioritize what remains an integral lead source—the phone call. While answering calls to the leasing office should remain a primary objective, that task has become more challenging during the pandemic. Many on-site teams are reduced to a skeleton crew or have reduced staffing hours to accommodate social distancing protocol.

According to Anyone Home data, first-time calls to multifamily properties from Feb. 25 to March 14 were answered at a rate of 65%. In the next 10 days, as communities started to adjust to the new realities of the pandemic, the number declined to 33%.

Prospects are still eager to lease, as the data indicates that calls have increased more than 30% since the outbreak. Many prospects are starting to search on an extended timeline of more than 30 days out, which elevates the need for teams to track their long-tail leads. Communities missing an abundance of calls might consider using a contact center to decrease their missed-call percentage to zero.

Replacements for Security Deposits

According to Mark Stringer, executive vice president of Avenue5 Residential, a growing dissatisfaction with security deposits had already emerged within the industry well before the pandemic.

“They are expensive, cost-prohibitive outdated solutions that no longer make sense for operators or residents,” Stringer says, noting jurisdictions within Ohio and Pennsylvania are among those introducing legislation to eradicate security deposits in favor of more affordable solutions.

Avenue5, the 15th largest apartment manager in the country, according to the National Multifamily Housing Council’s latest annual ranking, has been utilizing LeaseLock to replace security deposits across a portion of its portfolio. The platform replaces the traditional security deposit with a more affordable monthly deposit waiver fee for residents. Lease insurance is then applied to all new leases. Stringer notes that lease insurance is even more valuable in the current environment, when virtually all residents are at risk of losing their jobs and not being able to pay their rent.

Lease insurance offers the ability to improve move-in affordability while ensuring risk mitigation in the potential event of rent loss,” Stringer says. “Frankly, the security deposit is a thing of the past. Financially, they—along with alternatives like surety bonds —don’t make a lot of sense. They don’t correlate to the amount of damage that could be done to a unit or the potential amount of debt. They’re just not relative to the risk.”

Resident Referral Platforms

Despite the influx of PropTech, one of the most effective leasing tools remains word of mouth. It is no secret that consumers, regardless of industry, broadly trust the words of their friends and peers. But solutions exist to mesh tech and old-fashioned word of mouth.

Some operators are now using platforms that allow apartment searchers to go directly to the source for specific feedback about a community—existing residents—as they know happy residents can be some of the best ambassadors.

“We’re using a resident referral program in which prospects can speak with current residents via the website and ask questions about what it’s like to live at one of our communities,” says Cindy Sanquist, president and chief executive officer of Edgewood and Vantage management companies. “Even before all this, I was a big believer in resident engagement. I think when we get to the other side of the pandemic, these platforms will continue to lead to the ultimate goal of resident retention.”

Fostering Connection from Afar

Leasing apartments is built on personal connection and customer service, as Joe Melton, vice president of marketing and support services of The Morgan Group notes.

“In the time of crisis and uncertainty that COVID-19 brought into our industry, the continued ability to build a personal connection and deliver even higher levels of customer service are of key importance,” Melton says. “We’ve seen technology adoption skyrocket, one because we had no choice, but second, because it has offered the ability to connect in new ways.”

That includes building on the concepts of virtual tour technology, which The Morgan Group, a Houston-based multifamily investor, has done so in recent weeks.

“The industry has taken it a step further with live tours directly through the integration of Zoom within our Power Pro Leasing app,” Melton says. “It has empowered our teams in new ways. They are building connections, delivering top-notch customer service, creating an experience, and they are leasing apartments—all while maintaining a safe physical distance.”

In addition to an increased reliance on PropTech, the industry has adjusted in other ways during the outbreak. While competition has and will continue to be part of the apartment landscape, the industry is more than ever exhibiting a collaborative approach. That has opened the doors for communication and increased transparency for sharing solutions that genuinely move the needle.

“Among all of the owners I’ve dealt with at other companies, there is a real empathetic passion for one another that has developed during this time,” Sanquist says. “People are taking what’s happening at their own communities, and we’re all sharing ideas about what we’re doing. It can be something as simple as, ‘What kind of flyer did you do?’ I think there is some kind of consortium that is going to occur. In some ways, it has happened already.”

 

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