With inflation high and staring in the face of possible global recession, many a property manager seeks ways to increase their margins and sell properties faster to ever-cautions buyers. Property management using Internet of Things (or IoT) is one of the options that can help business owners here. Maybe even the one with most lucrative prospects.
Global consumer and business spending on Internet of Things was forecasted to reach 1 trillion U.S. dollars in 2022. Almost a third of that spending (29%) is attributed to North America, and another 23% to the EMEA area, although the biggest chunk belongs to Asia Pacific — 37%. This means consumers are eager to buy smart devices, and smart homes aren’t an exception. And that’s only one side of IoT use in property management.
So, how can the implementation of IoT help businesses in the niche of property? Is the potential output worth the investment? These and some other questions we will be answering in this article.
Property management issues that can be solved with IoT
While on the surface, turning on driveway lights and heater remotely before you get home is just pure convenience and a fancy trick, dig a little deeper and you’ll see how it cuts your energy bills.
And energy bills aren’t only paid by your average Jane and Joe, i.e., the consumers. Property management businesses have maintenance costs on their property too, and those are often way higher.
Here are just two big issues that such businesses can solve by optimizing property management with IoT.
Cutting energy costs
The use of IoT in property management allows owners to cut costs when the property is vacant. To show the property to possible tenants or buyers at its best, it should be heated and well-lit when they arrive.
However, keeping the heating and electricity on at all times will cost quite a lot, especially if your business manages multiple properties. Moreover, keeping utilities on in vacant premises will inflate average operational costs and cause cost overruns, negatively affecting business’s performance.
IoT sensors will not only add automation and remote control to the premises, they’re also able to collect data on the use of energy in commercial buildings. Such data as the number of visitors to common areas at different times can help optimize the use of energy as well as other resources (e.g., cleaning services).
With the help of IoT sensors and software, property managers will be able to:
- Remotely turn everything on before the client arrives and off at the times no one is supposed to visit.
- Monitor real-time consumption for both vacant and occupied property, thus building more efficient budgeting. This works for IoT in rental property management as well as for selling property.
IoT devices with energy conservation functionality can help save up to 25% on energy-related costs.
Reducing wasteful energy consumption
Property management with IoT is growing fast in the wake of not just tech advancement, but also climate change. Climate emergency was the Oxford Word of the Year just recently, in 2019.
Excessive energy consumption doesn’t only result in enormous energy spending, it also leads to higher carbon emissions.
According to the U.S. Department of Energy, 16% of all U.S. carbon dioxide emissions (826 million metric tons) comes from commercial buildings. Sustainability is the word we hear during political campaigns, and energy efficiency is at the heart of many new policies in developed and developing countries alike.
Property management businesses should care about this as well, if not for ethical reasons, then for financial and legal ones.
Ways to use IoT to optimize property management
The use of internet of things in property management can be quite varied.
#1 Self-guided and 3D tours
As many as 40% of homeseekers prefer touring potential properties after hours. Which is understandable: most people work normal nine-to-five shifts. Additionally, quite a number of people would prefer to see their potential home or apartment without the agent. To calmly look around, without hurry (and without that very professional selling speech 🙂).
With the help of IoT for smart property management, property owners and agents can offer two possible solutions:
- Smart locks that open via a mobile app
- Virtual 3D tours
The second option is popular among property buyers who are either extremely busy or live too far from their intended area and wouldn’t want to travel for each home viewing. It’s way more convenient to narrow down the selection first, isn’t it?
#2 Smart safety systems
One of the most important — or maybe even the most important — use of IoT for property management is the installation of safety monitoring devices. These devices include:
- Security cameras
- Access control (smart locks)
- HVAC (heating, ventilation, and air conditioning) sensors
Such IoT-enabled devices will help keep the property safe from both outside (burglars, squatters) and inside (fire, flooding, gas leaks) dangers.
#3 Predictive maintenance
Nothing is eternal in our lives, and this includes buildings. A lot of things influence buildings, from internal activities to the traffic around. Building age and materials as well.
Generally, it’s recommended to perform regular check-ups on buildings to ensure they’re safe for tenants and visitors.
With IoT in property management, it’s possible to keep track of any changes constantly. A variety of sensors exist to monitor the condition of a building, including vibration sensors, indoor air quality sensors, and more. These sensors will notify the building owner or manager of any changes or irregularities indoors and around the property, promoting efficient maintenance.
Additionally, by collecting data from sensors for a period of time, a special system might be able to predict when the maintenance should be conducted even without any disturbances or issues.
#4 Smart lighting
This is probably the most widespread collaboration between property management and IoT. Motion sensors detect when someone enters the area and the light turns on automatically. There are two main outtakes from the use of smart lighting:
- Saving on energy costs for communal spaces like corridors at night
- Providing a sense of safety for tenants, thus enhancing their “user experience”
#5 Space utilization in commercial property
If we’re talking about commercial property — stores, offices, coworking hubs, manufacturing premises — space utilization is of utmost importance there. Such premises are usually large, therefore, their energy consumption is high compared to living quarters.
The use of infra-red sensors to monitor whether a certain area is occupied at a given moment can help optimize energy spending. For example, in a large workroom or a store, when no workers are busy at a certain area, it’s sensible to dim or turn off lights over it.
In a coworking hub, monitoring full and empty areas will allow a manager to faster and more efficiently direct newcomers, possibly grouping people to better manage lights and air conditioning.
When installed in an office, IoT sensors can notify everyone whether conference rooms are busy.
These are just the few possibilities where IoT for property management can be of great use. Based on the peculiarities of your real estate business, an experienced consultant can define what IoT technology or software would bring the most profit.
How IoT impacts property worth
The value of any property is determined by multiple factors:
- Location / Neighborhood
- Age / Time of building
- Materials it’s built with
Some of these factors can be influenced by the use of IoT for property management optimization. How?
#1 Making the appeal by prospective saving
Older buildings and buildings built from certain materials have lower basic energy efficiency. Some of them require additional devices to heat the property in winter and cool during summer, for example. These buildings are expensive to maintain and to live in, resulting in low popularity among potential buyers/tenants.
Besides saving on bills while the property is under the management, IoT smart devices can also level the field by optimizing energy consumption for buyers/tenants, helping property managers sell it faster. With the ability to monitor consumption and somewhat control utility costs, the popularity of such buildings will rise, and so will their price. In fact, 86% of millennials are ready to pay an extra 20% for a home that has smart devices installed.
If you open Zillow for Manhattan, New York and select the same parameters with the only difference being a required mention of “smart home”, you’ll be surprised to see what the difference in prices is.
As for Europe, according to real estate websites in Estonia, for example, with all other parameters (location, size, age, etc.) similar, a 1-room apartment in a smart building will cost approximately €10,000 more than an apartment in a traditional building.
This trend is even more true for commercial buildings used for common spaces — offices, coworking hubs, etc. Multiple sensors and control devices will allow owners to save on energy, prevent accidents, and collect data for budgeting.
#2 Selling faster with the help of virtual tours
Virtual tours — the ability to see the apartment dynamically and not just on still photos — reportedly help sell property up to 31% faster, according to a 3D space capture service Matterport. And the selling price goes up 9% as well, with a proper 3D tour.
Having an option to virtually visit the property will help buyers who can’t or don’t want to allocate time for in-person visits to multiple places. Virtual tours will enable buyers to shorten the lists of possible options, make a final decision faster, thus helping property owners and managers make a sale.
As an extra bonus, the information about successful findings will spread by word of mouth, bringing in new clients. It’s a win-win.
Our experience in IoT development
Mind Studios has ample experience in the real estate niche, especially for the US, Middle Eastern, and South African markets. One of our clients is a service that helps real estate agents find property that’s off the market at the moment but whose owners are open to selling their property. The service has a custom algorithm for finding suitable houses by a set of parameters, and it also offers virtual tours for homes on sale.
Another project we worked with is a virtual inspection service used by professionals from all sides of the real estate industry, including property managers. The service offers virtual tours for remote inspections, including live tours.
The landscape for property management is changing, shifting more and more into the online spaces as 51% of buyers already look for homes and premises online rather than through any other means. The use of IoT in property management saves money for sellers and buyers alike, helps sell property faster, improves the experience (fewer trips to the property for everyone), and helps the planet.
If you’re in the business of property management and looking into the opportunities to hop on this fast moving train, we at Mind Studios can be of help with a load of knowledge both in software development and in the real estate market as one of our focus industries.
Schedule a free 45-minute consultation with our business development specialists if you have any questions or an idea for software to use in your business. We will readily share our insights and knowledge with you.