Four Ways to Minimize the Risk and Maximize the Benefits of IoT
In a perfect Internet of Things (IoT) world, the skies are deep blue with connected smart thermostats, door locks and connected lighting. Alexa and Siri are in tune and sing like birds in splendid harmony. Renters bask in the automation and creature comforts that smart technology provides – whether it’s with their devices or those equipped in the apartment – and operators rest easy knowing they have complete access to all they need.
It’s a dream that the apartment industry is hoping will come true someday. Smart home technology is the buzz in multifamily, but IoT is still young.
Smart Home and IoT: How can multifamily take full advantage?
Operators would like to have one strategy that manages smart home technology regardless of who owns it or makes it, but the industry isn’t there yet. Most of the technology is designed for single family applications, not multi-unit communities on multiple floors across multiple acres.
Outfitting new apartments with smart devices is expensive and retrofitting them is even more costly. Not all IoT devices talk to each other and options for centrally connecting them are few. When a resident brings their own smart devices to an apartment, chances are they won’t integrate with any smart technology already in the building.
Also, operators run the risk of being locked out of their own units – literally and figuratively – when some single family solutions are utilized.
In some cases, when installing smart technology the multifamily industry has been, well, not so smart.
An industry observer noted recently that one apartment community went to the expense of installing smart locks with remote access in mid-rise units but access to the building required a key.
But Henry Pye, Vice President of SmartSource Resident Technology Services at RealPage, says multifamily shouldn’t be knocked for trying to market an apartment lifestyle vast on technology luxuries, even if it’s a bit like the wild west out there right now. Multifamily just has to be smart about it as IoT matures. Pye shared his insights at the recent Smart Apartment Breakfast hosted by the Apartment Association of Greater Dallas and sponsored by RealPage.
“We are not even close to the IoT to being fully realized today,” he said at a recent class on smart home technology at the Apartment Association of Greater Dallas. “However, you can screw up. You can limit your future options and you can double or triple costs of those options in the future.”
Connectivity and standardization are important for the future of IoT
While multifamily may not know what the future holds, it is clear many different solutions and standards will be part of it. For the benefits of IoT to be fully realized, all devices must connect, regardless of what companies manufacture the product or which have business relationships with each other.
Furthermore, IoT technology needs to be a benefit for it to make sense. Otherwise, operators may be throwing away good money. It costs about $1,000 per unit today for a fully connected smart apartment, including connected lighting.
“The actual benefit will depend on the market and how the application is implemented,” Pye says. “The key advantage is that we’ll have more information with greater detail and ability to act on that.”
That real benefit for operators is probably the farthest from reach. Smart home technology used in facility operation has the best return on investment potential but it’s not quite there, Pye says. The ability for the maintenance team to receive a notification of preventive maintenance before an air-conditioning condenser fails is dependent on the network and intelligence of the edge device. Unfortunately, 6 year old barely code compliment air condensers are not very smart. Conversely it looks like we will soon be able to use a combination of smart water meters with lessors for hot water heater tank to monitor leaks.
The future is clouded because of multiple wireless standards linked to today’s devices and hundreds of equipment vendors, including new managed smart community vendors that appear to be cropping up each week.
Accordingly, a prudent approach to multifamily IoT would be to hazard as few bets on technology or vendors as possible, Pye says.
“Anyone who says they know which vendors and technologies will dominate multifamily IoT in the next decade is either disingenuous or delusional.”
It’s generally accepted that a future multifamily community will have a number of different wireless standards operating throughout any community. Yet no one agrees about the specific standards that will be relevant.
There are, however, things that multifamily operators can do to join the smart home revolution and do it wisely, Pye says.
For one, connected thermostats, smart dimmers and switches (not connected) are low hanging fruit that can be purchased for about $10-20 each and will work for 20 years.
Using IoT solutions to create value for residents
Not all appliances, however, have to be connected to give an apartment that high-tech feel. Pye notes that there are plenty of inexpensive unconnected smart options − like occupancy switches for walk-in closets, occupancy dimmers that can act like night-lights and countdown timers for bath exhaust fans − that offer some level of self-sufficiency.
Just replacing outdated toggle light switches with rocker switches or dimmers gives the apartment modern appeal. Whatever the application, Pye says, it should do more than just automate a manual task. IoT platforms should offer a long-lasting solution to create value for residents and/or the management team.
“Either meet resident expectations or don’t do it.”
Successful IoT technology ultimately lies in new apartment construction, building apartments with network capability via Wi-Fi, Pye said. However, apartment operators can be just as smart outfitting an apartment with a combination of smart connected and unconnected technology.
Four recommendations to maximize your IoT strategy
1. Use smart locks for IoT security and smart thermostats
All multifamily communities should have these. Property management companies can also selectively use smart but unconnected lighting control such as occupancy switches. All traditional switches should be modern rockers. Ecobee and Honeywell Wi-Fi (T5/T6/T9 and T10 pro) thermostats are a good bet, as are Dorma-Kaba Saffire smart multifamily door locks.
2. Take advantage of smart connected lighting solutions
These can be managed or unmanaged in premium apartments. Communities are generally willing to spend more time assisting premium units both during the lease and at make ready. Whether operating under a managed or unmanaged solution, Pye says operators should consider non-connected smart lighting upgrades by Lutron Diva and Lutron Maestro 3-speed switches for ceiling fans, occupancy switches, occupancy dimmers, timers for exhaust fans and light fixtures. For new construction, where code allows, avoid switched outlets and relocate smart switches to the best location for a smart switch/dimmer. For example, using a single occupancy dimmer instead of three-way switches in bathrooms with two doors.
3. Engage a managed smart apartment vendor and train staff
While managed smart apartments vendors are costly, they are a fraction of the cost of supporting an unmanaged solution both during occupancy and at makeready. Additionally, it’s important to train your entire staff to operate IoT systems.
“It should be lead management and definitely your maintenance team,” Pye said. “Training only one or two people ensures failure.
4. Consider providing a managed wired and wireless internet solution in the residents’ rent
For new construction, especially for high-end urban infill developments, this can be an effective approach. Much of the infrastructure needed for a managed smart apartment solution can also provide high-speed Internet access. A comprehensive managed solution will enhance the smart community experience for residents and management while addressing a number of other needs and concerns. Importantly, bandwidth costs have dropped to a point that many communities can cost effectively provide bulk speeds on par with the fastest available retail packages. Pye warns not to rely on a few hallway locations for hubs/gateways in new construction. “Please just install a cat6 from the building closet to each unit. It seems like every new technology or solution tells us it can cover 6+ units from a hallway and then reverse their guidance a year or two later.”
Creating ‘a solution, not a gimmick’
While there is no specific data available, Pye believes smart technology in apartments is helping increase traffic and closing rates. A definitive rent premium has been a bit more elusive it has been hard to different between the various new amenities offered by the newest development. The recipe for a smart apartment is a careful blend of connected and non-connected fixtures, not just a smart lock and one smart light switch. If you want to create value from your investment in technology, you need “a solution, not a gimmick.”
Until the technology fully finds itself, Pye recommends taking a calculated pace and beware that what is installed now could be irrelevant as IoT matures. Replacing a fistful of technology with new IoT applications could get expensive.
“I believe a smart lock, a smart thermostat and occupancy sensor or two, those things are okay for an apartment community right now,” he said. “The average development does not need to rush out and install smart lighting systems in every unit.”
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