Does Vacancy Have An Impact On Technology?

  Photo taken by Darren Henry April 25, 2018 in Vancouver

 Photo taken by Darren Henry April 25, 2018 in Vancouver

Last week, I had the pleasure of speaking with a group of distinguished peers on technology at the Western Canada Apartment Investment Conference in Vancouver and, as promised, we wanted to share some of the key takeaways.

This conference was held at the beautiful Vancouver Conference Centre in downtown Vancouver, overlooking the busy harbour. The key themes that owners and property managers addressed during the conference included a host of different markets in which vacancies varied from less than 1% to 7%.

Our session on “technology and its impact on the apartment market”, moderated by Sally Turner from SVN Rock Advisors, included guest speakers Andrew McLeod from Certn, Heather Brady from Yardi, David Polosi from Manaya, and myself (Darren Henry) from LeadManaging.

 

Western Canadian Market

Prior to diving into the technology discussion, there were several takeaways regarding the market alone. The first speaker of the day was Chris Lawless, Chief Economist from BCI. He shared his views on the three key cities for the Western Canadian market.  Below are a summary of statistics for each city, and their outlook going forward.

Vancouver

  • Vacancy rate under 1%
  • Rental rate average close to $1300 (6 units and over)
  • Unemployment rate:  just under 4%
  • Land/house driving buyers to condos and apartments from single family
  • Strong demand but affordability a key issue

Calgary

  • Vacancy 6%
  • Rental rate average just under $1150 (6 units and over)
  • Unemployment rate (Alberta) – just under 7%
  • Worst is over
  • Recent job growth mostly in the service sector – some potential upside to oil prices
  • Vacancy declines and rents move higher in 2018 and 2019

Edmonton

  • Vacancy 7%
  • Rental rate average around 1100 (6 units and over)
  • Unemployment rate (Alberta) – just under 7%
  • Net migration will rise
  • Completed and unoccupied stock will continue to drop
  • Rental demand growth will start to outpace supply

To get a copy of the presentation from Chris Lawless (Chief Economist, BCI), click here

CMHC’s Christina Butchart (Regional Economist) also shared some key insights.

Her presentation on the western markets can also be accessed online here

 

Technology Impact On Apartment Market

With background on the markets, we could dive into discussing technology’s place in the rental industry, which is “becoming increasingly automated… there is arguably no aspect of the rental industry that remains untouched by technological change” (Sally Turner). Sally wondered about the ways the different speakers had seen technology change the rental industry.

With background on the markets, we could dive into discussing technology’s place in the rental industry, which is “becoming increasingly automated… there is arguably no aspect of the rental industry that remains untouched by technological change” (Sally Turner). Sally wondered about the ways the different speakers had seen technology change the rental industry.

Property management companies are looking to engage leading vendors who understand technology, people and processes within an organization. They must have the experience to anticipate potential issues and lead their clients through the implementation of new systems, automated processes and be able to deliver on outcomes that matter.
— Darren Henry, LeadManaging

Turner then questioned if technology was necessary in a market with a vacancy of less than 1%.

The answer is that it certainly is! People become complacent. Markets change. Staff need to be trained and prepared for times where things may not be going well. David Polosi helped illustrate this.

Low vacancy rates in Canada has kept the priority and investment into technology and automation at an industry low when compared to our US counterparts. We know automation can lower the total cost of running portfolio’s down: maintenance, marketing, tenant onboarding, employee retention and training all see improvements. As technologists, we need to do a better job of telling that story, as an industry leader there needs to be a vision around it.
— David Polosi, Manaya

Technology certainly has the power and potential to improve tenant engagement and customer service. Turner posed, “What impact has technology had on tenant engagement and customer service?”

Technology can fill in the gaps and be the saving grace when it comes to staff who may be busy or not as engaged.

The Canadian Property Management Market is catching up to the US, and managers are looking for efficiency.
— Andrew McLeod, Certn

Of course, it is important to address any potential risks of the implementation of technology. Turner asked, “What are some of the negative impacts that you’ve seen technology have on tenant engagement and customer service?”

There is nothing like rolling out new technology, and failing to follow through with it in a cohesive manner.

A huge pain point is automating everything from marketing to lead managing and onboarding, causing staff to be more confused on customer service and value-add activities.
— Andrew McLeod, Certn

So, proper training on the purpose, benefits, and use of new technology is key.

The tech world being such a norm within the younger generations, "How has technology impacted the new generation of renters in terms of their expectations for customer service?"

The new generation of renters expect instant responses, and know how to easily access reviews of different services. Young renters use such experience and data as a major part of their decision-making process.
— Darren Henry, LeadManaging

Turner pointed out that automation also has an impact on employees and the nature of people’s work. She asked, “How do you manage that fear of automation to ensure that technology adds value? How do you roll out technology in a way that staff will embrace change positively without putting up roadblocks?”

Property management companies are looking to engage leading vendors who understand technology, people and processes within an organization. They must have the experience to anticipate potential issues and lead their clients through the implementation of new systems, automated processes and be able to deliver on outcomes that matter.
— Darren Henry, LeadManaging

Data created through new and innovative technologies is clearly powerful. It can drive improvements in customer service and tenant relationships, and empower employees to improve management, but it can also be overwhelming in terms of quantity, and hence lose its value if not managed and used appropriately. Turner asked what “some of the common mistakes we’ve seen in terms of inability to effectively use collected data” are.

It is important that, whatever approach is used in collecting data, that the aim is in identifying success. Answering any questions in advance, and being completely clear on the correct way to use data, is crucial.

While automation has certainly improved convenience for tenants, and ability to respond for landlords and property managers, it has come with a frequently voiced concern about tenant privacy. The question was asked: “What have your experiences been with this, and how can we minimize the loss of privacy in a world of automation?”

It is important to ask all vendors about the following:

  • Encryption
  • Separate databases
  • Configuration
  • Location of suppliers

For some of the most important must-ask questions for your technology suppliers, click here

"What does the future of technology look like within the apartment industry?"

The key words used to answer this very last question of the session included:

  • People data
  • Voice recognition in multiple languages

The future of technology in the apartment rentals market is exciting, and the impact it will have is greater than any other implementation in the market.

The 25 billion start-up, Quadreal, that will be profiled at the Canadian Federation of Apartments Association is one example of a tech company that has the potential to impact our industry enormously. Having journeyed from four staff members to an enormous company that implemented a fully automated solution for their real estate businesses, Quadreal expects to be the best in class in North America.

We at LeadManaging are constantly looking into the future of technology and the needs within multifamily housing, and can agree that there are big developments coming in the next few years that will definitely shake things up.