We’re finally beginning to see supply eclipse demand in multifamily markets across the nation. Owners and operators can no longer rely on the high rent and occupancy rates they’ve enjoyed in recent years. Accordingly, multifamily leaders are being pressed to operate more efficiently. One emerging technology that can provide an unfair advantage above all others is big data. Harnessed correctly, data can positively impact every aspect of multifamily, from acquisition through resident retention. Let’s take a look at three major data plays trending in multifamily right now.

Acquisition

The problem: In Kiplinger’s 2019 report on the multifamily market, Karlin Conklin observes, “Apartment buyers evaluating acquisitions for the coming year are taking a more cautious approach toward income projections and capital improvement budgeting. Buyers are recognizing they can’t count on property appreciation to compensate for miscalculating the upside of a project’s ‘value-add’ component or the cost of construction.” As margins grow tighter, asset acquisition becomes riskier. It’s essential, then, to build a solid baseline understanding of what you’re buying before making the investment.

The solution: Luckily, we’re seeing powerful new multifamily inspection management software, which allows owners to access comprehensive data on any asset before they acquire it. Considering purchasing a 300-unit residence in a hot up-and-coming neighborhood? You might like to know the HVAC units are 20 years old and past their warranty. Data gives owners actionable insight that can help answer the biggest question of them all: to buy, or not to buy?

Post-acquisition

The problem: In a competitive market, nice-to-haves quickly become need-to-haves. Delivering an unparalleled resident experience is more important than ever. At the same time, we’re seeing an “amenities gap” between the amenities residents want and the ones rental properties provide. In a survey of multifamily dwellers from 70 metros, 84% of residents reported they were either paying for amenities they didn’t want, didn’t have access to the amenities they needed, or both. Nailing the amenities mix right can be one of the owners’ biggest challenges, which when done wrong results in wasted money and dissatisfied tenants — a lose-lose situation.

The solution: Amenity companies like Amenify can examine data on the hottest amenities in each market, and then help owners supply those amenities to their residents. Many older buildings have lackluster gyms, for example—if state-of-the-art workout equipment is high on your residents’ priority list, Amenify can provide access to a local LA Fitness as part of the rental agreement. Same thing for laundry services or dog walkers. By providing insight into what exactly residents want, it becomes much simpler to meet and exceed their expectations.

Operations

The problem: When you buy a car, not only do you receive an owner’s manual, but dashboard lights go on to alert you it’s time for a service. Yet when you invest millions of dollars in a multifamily asset, there’s no manual. If you don’t know when an HVAC unit was installed, it’s going to surprise you when it breaks—and surprises are expensive. Inevitably, unplanned maintenance expenses cost excessively more than planned ones: it costs $50 to get your oil changed, and $5,000 to replace your transmission. With no visibility into the thousands of pieces of equipment it takes to maintain a fully functioning multifamily property, it’s impossible to plan ahead, and the budget will never accurately predict those costs.

The solution: Data can help you understand your maintenance costs in real time, like where you’ll have to spend your next maintenance dollar or when you’ll need to schedule improvements. We’re seeing new technology companies offering innovative solutions to identify maintenance issues before they become capital expenses. For example, IoT startup Kairos provides metering technology that shuts off a unit’s water the moment a leak is detected. Preventative maintenance software like InfoTycoon’s solution can track warranties and maintenance schedules to make sure equipment is properly cared for. Turning unplanned to planned maintenance can be a gamechanger for operating expenses across your portfolio.

As new technologies gain traction in the market, it can be difficult to know where to invest. A simple rule of thumb: if a tool gives you truly actionable insight, you’ll be able to make better-informed decisions than your competitors, and that can make all the difference.