Outdated. Antiquated. Obsolete.

These are just a few words that have been used to describe the technology used by many in multifamily real estate.

The industry has an unfortunate reputation for being slow to adopt new technology and resistant to change. While this may have been true in the past, multifamily real estate today is changing rapidly.

The industry is shifting and becoming more and more tech-focused. Thanks to an influx of money from institutional capital, investors today expect multifamily operators to be just as data-focused and tech-savvy as Wall Street. In addition, technology is now built specifically for the real estate industry, and you don’t need a degree in computer science to operate it.

As technology becomes easier to use and the real estate landscape becomes more competitive, it naturally drives more aggressive technology adoption. Today’s average multifamily business is no longer stuck in the past, but instead racing toward the future with a smartphone in hand.

Historically Slow Adoption

Most owners and operators would agree that five or 10 years ago, they didn’t use nearly as much technology as they do today. Industry leaders would often wait to see whether the new advancement was worth the time and effort, or just a fad to ignore. Unfortunately, this reluctance to use the latest tools sometimes held back the industry and prevented operators and owners alike from realizing larger profits.

When automated screening, self-service portals and call centers first emerged on the scene, for example, many people were slow to adopt the new technology. Then, slowly but surely, these new tools became part of the mainstream and greatly improved operational efficiency. Today, almost every owner and operator uses not only property management and accounting software, but also revenue management software, CRM, and marketing automation. While the initial adoption of technology may have been slow, multifamily real estate businesses today could not function without the tools they now rely on.  

A Changing Environment

The investment dollars flowing into real estate today are behind this technological change. Multifamily real estate is an extremely stable asset class and demand is predicted to grow in the next few years. This tempting combination is attracting institutional capital and these investors treat multifamily real estate just like all their other investments — as an asset to be measured and optimized.

In the market today, optimizing returns means using technology to achieve efficiencies and capitalize on portfolio opportunities to get the best possible results. Every small, incremental improvement can mean a huge bump to the bottom line and asset value. You can see evidence of this renewed focus on operational technology within multifamily. For example, attendance at NMHC’s OPTECH conference grew 15% from 2014 to 2015, and they expect an even larger audience this year. Multifamily leaders are clearly realizing that operational technology is the key to gaining a competitive edge.

The Future of Multifamily

In addition to investments in real estate itself, there has also been a substantial increase in investment in technology companies built to serve the real estate industry. In the first half of 2016, real estate tech startups raised more than $1.8 billion, according to CBInsights. The tech world has suddenly noticed that real estate is an incredibly valuable market, and has begun to focus their attention on better serving this industry’s needs.

For real estate leaders, this means that you now have more options to choose between as you assemble your portfolio technology stack or platform. There are software tools that are actually tailored to your business’ needs specifically, and that’s a great thing for the industry long-term.

With better tools on the market, multifamily real estate is poised to finally kill the persistent negative stereotype of being slow to adopt technology. With both Silicon Valley and Wall Street calling, it’s time to embrace technology fully and reach new heights.