The three most common PropTech pitfalls
1. One of the first things to gauge any PropTech solution is its user-friendliness.
A thoughtfully designed, user-focused solution with a simple registration process will promote adoption. If it takes an extended amount of time to learn, residents (and staff) will be less likely to use it, and your investment could be largely wasted. If you’re unsure, ask your provider for buildings in your area where their product is installed and go check it out yourself. If the property staff and residents love it, they will tell you. And if they don’t love it, they will tell you as well. It’s a win-win.
2. Remember, wiring and installation can add significant costs to your investment.
One of the biggest mistakes – as well as one of the most common – is to invest in PropTech that your building’s current wiring cannot support. If it’s an existing building, check the requirements of the PropTech and confirm your wiring can support the data bandwidth necessary.
For new developments, consider fiber optics. While fiber optics may seem expensive relative to other options, it can carry higher loads of data with less energy consumption. And with 29 billion internet-connected devices expected to be online by 2022, you’ll be thankful you made the investment.
Without the wiring to support the necessary data transfer, your PropTech investment probably won’t perform as intended. What’s more, improving internet connectivity is an easy way building owners can increase rent and revenue.
3. Don’t forget to keep an eye on the future.
With 5G and Wi-Fi 6 right around the corner, you may not need to upgrade your building’s wiring.
Instead, installing repeaters within the property may be enough to boost the signal and achieve the results you’re looking for. Remember that the reason for adding any amenity is to improve tenant satisfaction, operational efficiency, or both to positively impact NOI. However, if the upfront or ongoing investment is too large, it may not make fiscal sense to invest in an otherwise desirable amenity.
Assessing your installer and PropTech provider
PropTech is a relatively new field, and many of the traditional installers and integrators in the industry are still catching up. As a company whose product has been installed in more than 4,000 buildings across the country, ButterflyMX can be trusted when we say there’s nothing worse than committing to a PropTech investment only to have it go south because of an inexperienced installer.
The wrong installer can:
- Damage the hardware
- Overcomplicate the installation resulting in unnecessary costs
- Charge for unnecessary services
- Not meet deadlines
Five questions to ask your installer and provider:
1. How long does the installation process usually take?
Regardless of your budget, if the right PropTech doesn’t meet your deadlines, then it’s not right for you. New developments have strict timetables that need to be followed, and retrofits can quickly balloon, becoming an installation nightmare. When developing a new property, designing with the technology in mind can save you days or weeks of unforeseen changes.
By asking your PropTech provider for references where they were installed in similar builds (e.g., size, year, location) you can get a sense of how long it will take and how much it will cost. Because your property is a multi-million dollar asset, don’t let your relatively small PropTech investment stop that asset from producing returns either because of missed deadlines or Certificate of Occupancy delays.
2. How many people are typically involved in the installation process?
The right PropTech is designed so that one person can install it on top of the existing building infrastructure or with few modifications.
3. How many wiring touchpoints or connections are required for the system?
Soon, you will be able to easily install access points at each door you want to control. These access points will run on battery power and connect wirelessly to your building’s internet, sending a signal to the door’s electronic lock when it’s time to open. Until then, you will have to do some planning, because adding these access points can be time-consuming and expensive.
Once you’ve determined which doors need to be locked, you’ll need to consider the wiring requirements of your system’s hardware: Can it be powered over ethernet (PoE) or does it require a dedicated power source? Is this power source AC or DC? This can make the difference between building inspectors coming to visit or not.
4. Can your building’s infrastructure support new technologies?
Many new property technologies require either additional power, bandwidth, or both. Before you decide to purchase new technology, be sure your current infrastructure can support it. Familiarize yourself with the system’s wiring diagram and confirm that it is compatible with your building.
5. What will the ongoing maintenance costs be?
After purchase, additional maintenance will be necessary. Some PropTech solutions have high maintenance costs, some have low maintenance costs, and some have none (well, sort of). High maintenance costs are common with providers that sell several pieces of hardware. In the same way your smartphone becomes obsolete as software requirements change (it starts running slower and even stops working entirely), so too will the PropTech hardware you purchased. It can also be expensive to update your systems if someone needs to come on-premises.
Low-maintenance providers are typically those that sell you little to no hardware and remotely transmit their software updates to improve functionality and security. What about providers that claim no maintenance costs? Unfortunately, you will typically pay for that in the form of hardware and software that quickly becomes obsolete. Technology changes fast, and if you purchase solutions that don’t adapt, you’ll be making regular capital investments to stay current.