Trends in proptech we’ll expect to see more of in 2022
Heading into 2022, apartment occupancy rates across the U.S. are at an all time high. With nearly 98% of rental units at capacity, it’s clear that multifamily is continuing to thrive—and proptech has played a big role in this.¹
Recent advancements in technology have helped properties streamline workflow and improve NOI, while helping renters reduce barriers at move-in and enjoy an all around better rental experience. Although we’ve seen quite a few things change over the past year, here are five trends in proptech we expect to see more of.
1. Financial amenities will become a valued perk, and a powerful differentiator.
Financial amenities are gaining traction, and have been for the past five or so years. We’ll start to see an even bigger rise in these types of amenities as the norm in multifamily, especially as solutions like deposit-free leasing and flexible rent continue to pop up on the market.
With a deposit replacement, residents can purchase a deposit replacement bond to meet their deposit requirement in minutes, swapping their traditional security deposit with low, monthly premium payments instead of a large, upfront sum of cash. Low-cost deposit replacements like Jetty Deposit help speed up the move-in process, converting more leases and improving the resident life cycle.
Flexible rent payment products, on the other hand, give residents the option to pay rent on a schedule that suits them, offering much needed financial flexibility to those with irregular pay cycles. Programs like Jetty Rent help renters reduce delinquencies and avoid hefty fees accrued by late rent, which in turn helps properties get paid on time.
2. Properties will “get smart” about applicant screening.
While credit score modeling has historically been the norm in multifamily, we’re starting to see a transition to cash flow modeling, where payment history on recurring monthly obligations like rent and utilities will become common data points in scoring, rather than an applicant’s FICO score alone.
Cash flow modeling lets properties look at an applicant’s current situation rather than their past situation, which can sometimes be very different from where they are today. This is especially helpful for applicants who are disproportionately impacted by mistakes on their credit report—something that affects around 5% of consumers today.² An uptick in resident approvals also means an increase in converted leases, so it’s a win-win for properties and renters.
3. Renters will expect more flexibility to pay rent like they have with purchasing everyday products.
While the buy-now-pay-later-model isn’t a new concept, it is new in rental real estate. Renters are starting to expect more flexibility with how they pay for their home, similar to how they flexibility pay other everyday purchases.
With two out of three Americans living paycheck to paycheck, flexible rent programs give renters the option to pay rent on a different date than the first of the month, letting those with pay dates different than the first still make rent on time.³ The monthly fee for Jetty Rent, for example, is likely much lower than the late fees incurred by a resident for making a late rent payment. This also takes the burden off leasing teams, who oftentimes don’t have free times to chase delinquencies.
4. Property owners will look to consolidate proptech vendors.
With so many solutions on the market, property owners have started to look for ways to consolidate the proptech vendors they work with. We’ll start to see more of this as providers begin to offer a suite of integrated solutions rather than individual, single point solutions.
The shift to using the same vendor for multiple proptech solutions helps leasing teams and residents save time with learning and using new products. This reduces stress, and helps on-site teams cut through the clutter of an already long list of daily tasks.
5. Investing in sustainability will become increasingly important to renters and investors.
Social responsibility, or ESG (Environmental, Social and Governance), initiatives, like smart appliances, efficient lighting, and financial flexibility with payments, will continue to matter more; to renters who value social and environmentally-friendly practices, and to multifamily investors who gravitate toward properties with ESG initiatives in place.
The correlation between ESG and profitability is becoming more clear. Businesses with renter-friendly ESG practices in place have seen an 88% increase in operational performance; for property owners, this means higher resident retention and tenant satisfaction.⁴ Offering a flexible rent program like Jetty Rent, for example, is a socially responsible way to give residents the financial flexibility they need to avoid late or missed rent fees.
Sources:
- “Why Aren’t There Any Vacant Apartments?,” Bloomberg (https://bloom.bg/3AAHsgS)
- “From Inherent Racial Bias to Incorrect Data,” Forbes (https://bit.ly/3nUtOzS)
- “Massive 62% of Americans Living Paycheck to Paycheck, Many Convinced Finances Won't Recover Until 2022,” Entrepreneur (https://bit.ly/3jQBCkz)
- “Is sustainability profitable?,” Investors Corner (https://bit.ly/3HkcZWA)
