Evaluating Smart Tech Needs in Value-Adds: 3 Critical Questions Before You Invest

Smart apartment technology has emerged as a key differentiator in modern multifamily properties, but how should asset managers approach evaluating and implementing it in upcoming acquisitions?

This guide walks you through everything you should consider when assessing existing technology, identifying necessary upgrades, and leveraging smart apartment tech to boost NOI in value-add investments.

The multifamily landscape has shifted. Your value-add investment isn't just competing against other B and C class properties anymore—it's up against new supply equipped with the latest and greatest technology.

Evaluating existing technology and identifying opportunities for new technology in your acquisition requires careful consideration. Do your due diligence upfront to prevent costly missteps that impact your hold period.

By asking the right questions during the underwriting process, you can make informed choices around smart apartment technology that align with your budget, resident expectations and operational goals.

Start by benchmarking against your submarket. Understanding your competitors’ offerings helps you identify gaps and opportunities in your new asset.

Consider what similar assets are using to optimize the resident experience and improve interactions between residents and staff. Are prospective renters expecting a tech-enabled living experience now, and how will those expectations evolve over your hold period?

Ultimately, property type and asset class dictate which types of devices will add the most value to your asset.

Property type should influence how much you invest in perimeter access control versus in-unit amenities, for example. Residents at garden-style properties might be particularly concerned about perimeter property access to ensure safety, while those in high-rise buildings get more value from in-unit amenities. Similarly, townhouses and build-to-rent properties might benefit more from smart doorbells than high- and mid-rises.

“We don't have doorbell cameras on our apartment units because there's a level of security” provided by the building’s perimeter access, “but we do have doorbell cams for our townhomes,” says James Alfandre, Founding Principal at Urban Alfandre.

Asset class will also influence your smart tech investment. High-end, market-rate assets can justify a larger investment in smart devices because they can recoup that in a rent premium. Investment decisions for lower asset classes are better defined by what drives operational savings.

Finally, remember that comfort and safety — which the right technology can help deliver — are competitive differentiators that residents always look for, regardless of property type or asset class.

During the underwriting process, you’ll undoubtedly uncover operational processes that need improvement. Consider the role smart tech could play in addressing those pain points and reducing operating expenses.

For ownership groups that have a centralization strategy in place, the right technology infrastructure can minimize manual work and ease operational burdens. For example, a smart access control solution is critical to enabling maintenance centralization which eliminates the need for daily on-site maintenance staff.

There’s a good chance that the building you’re acquiring already has some smart devices in place. The question is whether those devices function properly and deliver the expected value.

Assess existing devices critically, and find out when any existing contracts for the tech expire. Do the devices work reliably? Do they look outdated? Are they still under warranty?

Then, move to the most important consideration: do the existing devices still serve the needs of the building?

Smart locks are one of the foundational smart devices found in modern apartment buildings — but not all smart locks are created equal, and many aren’t actually smart. That difference matters — the table below illustrates the limitations of offline locks.

Before assuming that your acquisition has smart locks that don’t need to be upgraded, determine whether they are offline locks or truly connected smart locks. If residents can’t see a lock’s status or manage locks remotely, they’re offline.

Even if the building you’re acquiring has smart devices, they won’t be delivering maximum value if they’re not connected under a single smart apartment platform. You need a platform that can be controlled from anywhere and that works with market-leading third-party hardware providers.

Primarily, your unified smart apartment platform should allow residents to easily control each device through a single app rather than manually configuring every device and juggling multiple apps.

Secondarily, the unified smart apartment platform also needs to allow staff to manage access, automation, and building intelligence all in one place.

Even if the asset you’re acquiring has an access control system, pay attention to whether there are different providers for perimeter, common area, amenity, and unit access control.

Beyond the devices themselves, it’s critical to assess the asset’s connectivity infrastructure — in other words, what is needed to power the smart devices that are already installed or planned to be installed? Without an adequate infrastructure, you can’t unlock the value of your smart tech investment.

The technology assessment you conduct during an acquisition directly impacts your asset's long-term performance.

As market conditions and resident expectations evolve, it’s more important than ever to make strategic investments that keep your portfolio competitive. Properties that lack modern technology infrastructure risk falling behind.

Need help evaluating smart tech needs for your value-add investment? Book your free smart tech consultation with Ambient below, no strings attached. Our team of experts can also help you assess technology needs in an upcoming acquisition.