Part 1 – Building company health and wealth.
Times feel lean and real estate market conditions appear restrictive as the U.S. economy endures sticky inflation. Multifamily community developers and owners are thus getting mixed signals. Building materials like gypsum, steel, and ready mix are exorbitantly priced. But, on the flip side, soft wood lumber prices are returning to more affordable levels, and supply chain setbacks are catching up with demand. Predictions are welcoming as analysts at GlobeSt believe that 2024 could be “a very solid year for commercial real estate,” due to a projected 1% economic growth. And, a way to hedge against market volatility is by investing in multifamily real estate, according to American Apartment Owners Association. The reasons for this are multifaceted: the single-family housing market has been hit as fewer people can afford to sell and move. Many would-be first-time home buyers must continue renting with interest rates remaining so high. Plus, young renters are seeking affordable, sustainable housing in new locations and markets.
Whether long-time professional or new to the industry, residential and multifamily developers, owners, and managers who want to advance their companies’ health, wealth, and technology advancements in 2024 can begin to lay the groundwork for fresh strategies. To that end, Quantum Fiber Connected Community experts have identified a number of key trends and how to capitalize on them–either by leveraging or steering away from them.
Trending – Retain valued staff and residents by incentivizing them
Compensation and incentives are difficult to meet when financial margins are tightening. GlobeSt reports that when debt comes due at times of high interest rates, companies are short on cash, and then to delay investments in growing infrastructure and hiring staff. Yet, your staff contributes significantly to your company’s health. And attracting new team members, training them quickly, and reducing staff turnover have stayed at the top of the list of biggest challenges facing property management industry professionals from 2021 to the present time, according to the National Apartment Association.
Out-of-the-box incentives to consider
You may not have the cash in hand to do this alone. But internet service providers (ISP) may be able to supplement with a worthwhile incentive. Both your business and your ISP want the same thing: loyal and satisfied residents. For example, Quantum Fiber financially rewards model sales professionals or property staff for signing residents up for fiber service, making it a win-win for both the staff and the residents–who, after all, are delighted to get access to on-demand fast, secure, and reliable internet. Quantum Fiber reports being steadfast on investing annually in staff rewards for closing internet sales at their communities.
Trending – Delight residents through acts of appreciation
Consumers are feeling the financial squeeze as well. Spending cutbacks consumers are being forced to make include out-of-home entertainment (56%), travel (56%) and restaurants (62%), and other luxuries. Student loan repayments have restarted, which will reduce the discretionary spending of about 44 million people who owe a combined $1.7 trillion.
According to the WARC 2023 consumer trends report, residents have reduced entertainment spending by a full one-third, and are looking for affordable ways to be entertained at home or in their communities through online meet-ups, social media, streaming, and gaming. For example, there are more than three billion online gamers worldwide, an at-home hobby that requires ultra-speed internet access.
Out-of-the-box incentives to consider
Showing appreciation to new or loyal residents can fetch favorable satisfaction results. Consider distributing gift cards for out-of-home entertainment like local restaurants, shops, or movies, to treat residents with an opportunity to enjoy the things they have cut back on. Partnerships with local businesses could create fruitful arrangements as well. Showing appreciation to new or loyal residents can fetch favorable satisfaction results. And make fiber internet available to residents to feed their in-home entertainment and smart-connected needs. Moreover, Quantum Fiber explains its connected communities reward program pays residents who purchased monthly internet plans an equal sum reward as the participating property staff, doubling the total payout for each community.
Not trending – Dilute or delay residents’ experiences
2024 is not the year to skimp on investing in on-site amenities and broadband connectivity–especially facility enhancements or technology upgrades that could make your property more attractive to residents. However, the same dilemma remains. Being short on investment funds (cash) or avoiding high-interest debt may be holding you back from much needed infrastructure services and amenities.
Out-of-the-box solution to help keep upgrade plans on track
Consider discussing with your ISP how to obtain a door fee with an internet bulk fiber agreement. A door fee is an incentive providers offer that gives you an up-front, per-unit, lump-sum cash infusion. It then “bakes” a higher price into the internet services provided. This can allow you to add facility or amenity “nice-to-haves” back into your construction or upgrade plans. Such deals can also be beneficial for you by adding an attractive amenity that both lures potential residents and increases the value or appeal of the property. With the goal of boosting your company’s financial wealth, you can elect to increase rents, attract longer-term residents, and sustain higher occupancy rates, with the potential of enhancing your net operating income.
Plus, broadband is an increasingly critical factor for consumers deciding to purchase or rent in a multifamily building. Research by Parks Associates found that 40 percent of these renters in U.S. broadband households want bulk broadband internet bundled with their rent. More significantly, over three-fourths (77 percent) are willing to pay higher rent for high-speed internet.
Building company health and wealth with the right ISP partner
Residential owners, developers, and managers who rise to new challenges and position their business for the future should always seek out complementary business partners. It’s essential to find the right ISP that can grow and expand with the residential and multifamily business industry through ever-changing economic shifts and technological advances. Finding a committed internet partner can develop a path forward for future connectivity solutions. Because we know that living, working, and playing in the home is not a fad, now is the time to discuss a customized fiber solution for your multifamily property and reap the many benefits.
Read Part 2 of the Forecasting 2024 series to see which technology trends are on point.
Contact a Quantum Fiber Connected Communities expert to learn about connectivity solutions tailored to your multifamily community.
Quantum Fiber® Connected Communities provides customized fiber solutions for apartments and communities.
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