Michael Zaransky began his career in multifamily real estate using the latest technology to reach potential customers: radio advertising, newspaper classifieds, and listings in regional apartment guides. His high-tech properties included cable television and security cameras. Residents took advantage of a new banking feature (direct deposit) to pay rent more conveniently than writing checks.
Of course, multifamily real estate is much different now. Technology has transformed the space, taking every aspect of the rental experience online. Residents can find, lease, pay for, secure, and maintain their apartments via phone app, often without talking with another person.
Zaransky’s firm, MZ Capital Partners, has been on the leading edge of this tech wave, calling it the most consequential change of his career. And he’s fascinated with where tech is headed.
“I don’t know what else is next, but I’m looking forward to seeing it,” said Zaransky, CEO and president of MZ Capital Partners. “I’ve often said that the one thing we can’t automate is the apartment itself. You can’t sleep on the internet. At least not yet, anyway.”
Zaransky’s Northbrook, Illinois, firm has built a nationwide portfolio of multifamily real estate properties and has been recognized among the INC 5000 fastest-growing private companies. Through his three decades in real estate, Zaransky said the internet has transformed the industry more than any other service. The pandemic accelerated tech’s multifamily metamorphosis as renters began transacting more commerce online. If they order dinner via an app, why not make rent payments or schedule maintenance requests that way as well?
Technology is no longer an amenity for renters, Zaransky said. It’s a prerequisite. PropTech, or property technology, is a high-growth market, projected to reach $32.2 billion by 2030, according to Zion Market Research. Property managers that don’t offer the latest technology tools risk losing ground in the market.
“It’s a combination of the tech being so good and customers being so tech-savvy,” Zaransky said. “PropTech became essential to multifamily housing in the past five years and really intensified in the last two. There’s definitely a lot of cool stuff out there.”
Zaransky first met the impact of PropTech when his company began buying targeted online ads. Prospective renters viewing apartment listings would see tailored ads for MZ Capital Partners properties. It marked a dramatic shift from classified advertising and local guidebooks.
“That kind of blew me away the first time I saw that,” Zaransky said.
Next, customer relationship management (CRM) software automated and accelerated the practice of processing applications, signing leases, and accepting rent payments. Smart contracts allowed renters to sign leases from three states away, and apps freed them from writing monthly rent checks. Meanwhile, CRM software provides access to a suite of property management, marketing, leasing, and accounting utilities, collecting all the processes under one umbrella. Both property managers and residents benefit from this technology, Zaransky said.
“What’s really interesting is our ability to incorporate every resident’s smartphone into every part of the rental experience,” Zaransky said. “You can do everything with a couple of clicks.”
That includes viewing and even visiting an apartment. According to Zaransky, PropTech’s most substantial impact has been bringing properties to potential renters instead of vice versa. Video tours represent a cornerstone of property marketing, with technology advancing into augmented and virtual reality tours. Prospective renters can view, tour, and even virtually decorate properties before visiting in person. That has dramatically changed the sourcing experience, Zaransky said.
Further, customers can conduct self-guided tours using codes sent to their phones that open smart locks of preview properties. In many cases, Zaransky said, leasing agents no longer need to be on-site to conduct home tours. That is revolutionizing the property-showing experience, Zaransky added.
“The process works well and is leading some management companies in a new direction,” Zaransky said. “They’re centralizing sales and leasing operations off-site, staffing them with trained agents who handle all the properties in a company’s portfolio. We’re not there yet, but the idea is gaining traction.”
Once at home, renters demand tech tools to manage all aspects of daily living. Zaransky pointed to the “smart home” model filtering into multifamily real estate. Security is an essential consideration, as renters require smart locks, sensors, and other tools to protect their properties. Smart-home technology also allows residents to manage utilities and appliances through a home network. Beyond convenience, Zaransky said, today’s renters seek to live in more sustainable environments by better managing their energy consumption. According to one survey, renters value smart home features above amenities such as pools and covered parking.
“Everyone would love to have an app to wash and dry clothes,” Zaransky said. “But we haven’t figured that out — yet.”
As multifamily real estate incorporates more technology, the rental experience will continue to evolve, Zaransky said. It will empower renters to take more control over the living experience and property managers to better serve customers. Still, Zaransky believes that no matter how many services PropTech offers, it can’t replace good service.
“The real key is caring about people,” Zaransky said. “For all the things technology can do, it can’t do that.”
Published by: Aly Cinco