Why Should Companies be Adopting Technology?

The multifamily market is strong. This year, investment volumes grew alongside substantial nationwide rent growth and renter demand. With such strong natural growth, what is the incentive for property management companies to invest in new technology that promises to boost efficiencies? That was the chief question posed at the Innovative Investment & Facilities Management through Technologies panel at RealShare Apartments yesterday in Los Angeles. The answer unanimously from the panelists—which included Amy McGrath, director at Goulston & Storrs; Mike Ballard, partner at Ascent Multifamily Accounting; Ron Rossi, VP of business development of investor management services; and Gary Kao, general manager at Dealpath—was that technology adoption is imperative for future, sustained growth.

The millennial demographic is one reason why property managers need to integrate technology into an apartment complex. “We are seeing a demographic shift with millennials that are using technology for everything, and they want to manage their investments online,” Rossi said on the panel. “That is pushing firms to adopt technology.” This is a major driver of technology adoption, and both Ballard and Kao said that the millennial demographic is demanding more technology, but not only as renters. Millennials are also working in the property management field, and want to use technology platforms to manage properties. “Young individuals want to work with companies that are using new technologies,” added Rossi.

Technology integration isn’t the only hurdle. Management companies also need to make the most of the technology that they have. “We see a lot of clients don’t use half of the technology that the system enables them to do,” said Ballard. “So, companies should push employees to get the most out of their existing systems, because you are already paying for it.” Firms are also adopting new technologies from industry hires. Ballard adds that employees moving to new companies has been a good way to spread technology adoption.

Utilizing technology will not only help with improve efficiency, but it could also protect the company during a downturn. Efficiency could mean fewer employees—or less of a need to hire in excess during an economic growth period—which means fewer cutbacks during a down cycle. “We find a lot of management companies higher as they grown, but they don’t when they are shrinking,” said Ballard. “They are way over staffed on the back end. They don’t stay lean. The added fast and fire slow, and you need to be nimble.” Technology also creates better access to data and information, which will ultimately be helpful during a recession. “Investors are weary of the recession, and they want access to information and they want access and transparency,” added Rossi. “Our clients see opportunities on either end of the cycle.”

As companies create efficiency through technology, they are also bringing property management in-house. Ballard says that this has been a growing trend, but isn’t always right for every company. “Some owners are trying to vertically integrate, and create their own management companies to have more control,” he said. Ballard says that some companies have saved hundreds of thousands of dollars by bringing property management teams in house. On the flip side, Kao says that companies with large or spread out portfolios, in particular, need property management and need to utilize technology. “We see firms with more than one location looking for tech adoption,” he said. “Tech firms are popping up to focus on individual solutions. We want to build solutions that are tailored for this industry.”