Smart technology has become a common feature in residential spaces over the past decade. During that time, a growing number of homeowners have been controlling their homes remotely, or enjoying voice-activated features at home. Currently, 69% of U.S. homes have at least one smart home device. Multifamily housing was a little slower to jump on the bandwagon, with the prevailing attitude being that smart features are luxuries out of most renters’ budgets. That seems to be changing, with an increasing number of renters living in smart apartments. The global smart apartments market was $1.67 billion in 2020 and is expected to reach $2.68 billion in 2025.
So, what are smart apartments? A smart apartment is defined by three key elements:
- Connectivity. Buildings are wired to connect residents, management, devices, and building systems.
- Smart Amenities. This includes devices such as smart lights and smart locks, as well as integrated services like dog walking and package delivery.
- Community Management. Incorporating services for residents that save time, money, and hassle.
While there are appliances and add-on devices you can buy for your home to give it some smart features – think Ring cameras, Echo and Alexa devices – smart apartments are wired with connectivity from their inception. During construction, smart buildings are outfitted with an IoT (“Internet of things”) network. An IoT network is a network of physical objects—a.k.a. “things”—that have sensors, software, and other technologies installed to allow connecting and exchanging data over the Internet. It’s a booming market, with global spending on IoT across markets estimated to exceed $1 trillion in 2020.
While the expense of smart apartments may seem daunting, according to IOTAS, a smart building tech provider, smart apartments can drive rents up by 3 percent to 10 percent while also reducing a 250-unit community’s labor and energy expenses by $5,000 and $4,000 per year, respectively. In addition, smart-home technology’s ability to detect water leaks can save up to $11,000 per avoided leak.
When it comes to constructing smart apartment buildings, the industry consensus is that real estate developers need to bring IT experts on board from the get-go. Developers not only have to consider a building’s current connectivity needs, but they must also forecast what future renters will come to expect. And renters’ expectations can change a lot in a few years. While most renters may be fine with manually operating their lights and appliances today, it’s possible that that would be seen as a drawback in a few years.