Page 4 - Green Builder May-June 2017 Issue

EDITOR’S NOTE

By Matt Power
The Inside Scoop Editor-in-Chief

Building Intelligence:

A New Path to Multi-family Success

A growing list of machine-to-machine solutions vanquish many

profit-killing variables of building rental properties.

HE FRONT END of a development potential risks of rental properties kept many
project, once you get past the traditional homebuilders from crossing over.
planning and permitting phase, We’ve all seen overly optimistic condo projects
is typically where good builders struggle to find renters. Add in strict rules
T can really shine. And if you’re a requiring more market-rate units, parking,
reader of this magazine, chances are you’re greenspace and so on, and the risk often seems
already pushing the envelope in terms of to outweigh the potential benefits.
craftsmanship, home performance and But Internet of Things technology has
scheduling. But are you following the market, created a safety net, if you will. Assuming
or leading the way? If current trends continue, you do your homework, and build in an area
the future of most residential construction lies with rental demand, you now have tools to
in cities, not the old model of single-family help you control the operating cost of those
production homes on greenfields. Sure, there rentals. If you’ve ever been a landlord, you
will always be a market for one-off, high-end know how a small oversight can result in long-
custom homes, but is this how you want to spend your twilight term hemorrhaging of profits. To attract more reliable renters, many
years, serving an ever-smaller group of ever-more-demanding clients? properties roll heat, cooling, water and electric utilities (and Wi-Fi
When you sweep up the last sawdust from a custom home, you’re access) into a single bill. But research shows that this arrangement
stuck marketing yourself again. There’s no additional income from often leads to irresponsible behavior by tenants, who have no
that huge investment of your time and labor. Word of mouth can financial incentive to reduce energy use or shorten showers.
carry you a long way, yes, but will you swing a hammer while others The IoT adjusts for bad behavior. With the advent of smart
are retiring and kicking back? thermostats, zoning control for mini-splits, smart shower controls,
How about a rental property that keeps on paying the bills long smart meters, smartphone-enabled HVAC monitoring, occupancy
after the crews have gone home? sensors, window sensors and the software to synthesize all of this
Building a large, multi-family rental project is a years-long process. information, you—the landlord—are back in the driver’s seat.
It requires some specialized knowledge, ambition and persistence. Another advantage to smarter housing control: It makes affordable
But multi-family rental housing is exactly what’s needed now. units feasible. A well-thought-out apartment management plan
A recent Trulia study of homeowners and renters finds that the doesn’t have to be draconian to reduce energy and water waste.
market is shifting toward rentals, and not only because of affordability Operating in the background, it can automatically shut off lights in
(although that’s a large factor). The group most aggressively moving unoccupied rooms; keep baths free of excess, damaging humidity;
toward rentals and away from ownership is millennials in the upper- clear kitchens of greasy cooking fumes; and keep residents
middle class, the group that traditionally becomes the next crop of comfortable while also aware that opening windows with the heat
homebuyers. on will not fly.
Big cities are where the biggest demand is, of course, but smaller As you explore the multi-family projects in this issue, think of
cities are not far behind. Investment in rental properties in secondary them with IoT systems in place, fine tuning their performance.
markets hit a 16-year high in the last quarter of 2016, according to A well-built unit, engineered with smart systems in mind, will
JLL. The market is hot, and money is available. require less maintenance, less energy and water, and command a
Now let’s put a sustainability spin on this idea. Until recently, the more competitive rent than the “dumb” alternative. GB

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