Property owners have an opportunity to deliver a better living experience and value to residents with property-wide Wi-Fi.
June 15, 2023 |
Updated June 15, 2023
Internet connectivity is essential for everyone, yet of the more than 30% of U.S. residents who live in apartments and multifamily units, 50% report experiencing network issues, according to Parks Associates. In addition, lining up the service with local broadband providers can be cumbersome, expensive and challenging for residents to maintain their own equipment.
It’s not only an attractive benefit for residents, but it also drives higher revenue and value for the property.
Providing managed Wi-Fi in multifamily communities offers several benefits for property owners that can increase net operating income (NOI), improve cap rates and raise overall property values. Here are five ways offering managed Wi-Fi is a win for property owners:
● It attracts residents. The convenience of having internet service built in with plug-and-play connectivity is desirable for prospective residents. The ease of consolidated billing is one factor, as is the ability to move about the community and maintain connectivity. Plus, with no service hookups to schedule, multiple accounts to deal with or any equipment to purchase or maintain, it’s no wonder nine out of 10 prospective residents won’t even consider a property if the connection isn’t reliable, according to a renter preference report from the National Multifamily Housing Council and Grace Hill. That makes it a competitive differentiator that helps properties to fill vacancies.
● It supports resident retention. Regardless of whether the property owner is responsible for network issues, lackluster service still reflects poorly on the property, leaving residents dissatisfied. Worse yet, when residents have individual service directly from the internet service provider (ISP), property owners can be powerless to solve residents’ connectivity problems, and ISPs have neither the incentive nor the resources to remedy issues with a property owner until the contract between them is up for renewal. The only recourse a property owner has based on bad service to their residents is to switch ISPs at the time of contract renewal, which can range from three to 20 years. Owning and controlling the Wi-Fi system allows property owners to ensure better service for residents and have influence with ISPs providing bulk service to quickly address issues.
● It drives new net revenue. According to Parks Associates, three out of four renters are willing to pay higher rent in exchange for bundled broadband. That means property owners can charge a premium for Wi-Fi service, and even offer different level service packages of provisioned bandwidth for residents who need more or less bandwidth. This creates a revenue-generating opportunity with equipment that’s already in place to increase NOI and can boost property values.
● It lowers the cap rate. Investors use the cap rate to calculate the risk of investing in a property, and in general, the lower the cap rate, the lower the risk, and therefore, the better the investment. Because managed Wi-Fi increases NOI and property value, it drives property cap rates lower, making a property more attractive to potential investors.
● It enables smart home technology. According to Parks Associates, nearly 40% of households already own a smart home device, and two out of three prospective residents say preinstalled devices are an important factor when selecting a new residence. Deploying managed Wi-Fi across the property enables seamless integration of things like smart outlets, thermostats, light bulbs, appliances, water leak detectors, cameras and more to increase energy efficiency and security, regardless of whether they’re built-in as an amenity or owned by residents. Plus, many managed Wi-Fi hardware systems use power-over-ethernet (PoE), making them much more energy efficient—another attractive feature for prospective renters.
With the growing demand for ubiquitous connectivity, providing managed Wi-Fi access for residents is becoming just as important as water and electricity. As more properties begin offering this amenity as part of their package, that means it’s also becoming an essential offering for property owners in a competitive market.
Mike Womack is VP of Partner Sales – Americas with Nomadix.