The Next Big Thing: Resident Portals
Keat Foong, Executive Editor
June 1 2007
Rockville, Md. -- Resident portals may very well be the "next big step" in technology for apartment companies, in the view of Jeff Goldshine, senior vice president and director of management operations at Capreit Inc.
Goldshine, who frequently speaks about technology at industry conferences, noted that two years ago, the hot topic was call centers. "And last year, I was a panelist talking about Vaultware and the advantages of making your real-time rental information instantly available to prospects on the Internet. Today, we`re discussing resident portals, which I believe will be the next leap for an owner in meeting the needs of [today`s] renter," he said.
Indeed, Goldshine`s company itself, which is based here and owns and manages some 15,000 units, is in the process of selecting a resident-portal system.
For the uninitiated, a resident portal is a community Web site that allows residents to accomplish a whole host of functions -- paying rent, signing up for and paying utilities, placing work orders, reading the community newsletter, reserving a party room and even meeting their neighbors -- at any time they choose and without the need to interact directly with site staff.
The sites can also offer local news and sports information and special deals for residents from area stores. They can also give owners the chance to promote some of their ancillary-income programs.
Those companies that have already started offering portals -- a list that includes most of the industry`s largest players -- report that the response from residents has been hugely enthusiastic.
Archstone-Smith, the Englewood, Colo.-based REIT, began rolling out community-based Web sites for most of its portfolio last summer. "We went into it thinking to offer something that makes life a little easier for our customers," said Heather Campbell, head of corporate communications at Archstone-Smith. "We knew that people were excited [about the concept], but we have been all a little shocked, frankly, at how quickly residents are embracing the technology."
Sawyer Realty Holdings, based in Needham, Mass., which launched its first resident portals in February, also had a better-than-expected response. Mike Flynn, chief technology officer at the company, said Sawyer Realty has already achieved an 18 to 20 percent usage rate among its residents.
"We`re very happy with the penetration because we have not had an ad or pushed the product a lot," said Flynn. "For the most part, those who use the portals do it every month to pay rent. About 20 percent of users are sending in work orders."
Indeed, adoption of community Web sites had been slow until residents were given a reason to return to the portals on a recurring basis, observed Michael Munoz, vice president of product at CrossFire, a division of the Carrollton, Texas-based RealPage. Rent payments and utility sign-ups are the two key functions that have recently speeded up use of community Web sites, Munoz noted. A resident- portal vendor, CrossFire`s clients include Lane Cos. and Equity Residential Properties Trust.
All the same, while many large companies have portals up and running, only about 10 to 15 percent of the apartment industry as a whole is using them today, estimated Greg Starr, vice president of development at a resident-portal vendor, Resite Information Technology, based in Bloomington, Ind.
Obviously, what makes resident portals so pertinent and important today is the fact that more people -- especially the Echo Boomer generation, which is becoming increasingly essential to any property`s success -- are conducting more and more transactions online -- and spending more of their free time there.
"The younger, more computer savvy residents do everything on the computer -- theater tickets, airline bookings," said Capreit`s Goldshine. "The new resident lives, breathes and communicates on the computer."
"That`s how we all shop today -- for homes, for cars -- we look on the Internet," agreed Sue Cazier, president of Rema Inc., a Salt Lake City, Utah-based third-party property management company which recently started using a resident-portal system offered by Property Solutions International in Provo, Utah.
So communities that frustrate a resident`s desire to do business online run a serious risk of alienating their customers.
Dennis Smillie, an industry technology consultant and president of Multifamily Solutions Inc., pointed out that most management firms today understand the importance of marketing their properties online to prospective renters.
But too many, he said, fail to take the next logical step, after a lease is signed, of continuing to serve residents in the 24/7 environment to which they are now accustomed. Management firms that don`t do so will find it increasingly difficult to keep residents happy -- and keep them renewing.
Added David Cardwell, vice president of capital markets and technology at the National Multi Housing Council, the growing acceptance of resident portals "is simply a reflection of demographics and the nation`s use of the Internet. If your residents are online, you have to be, too."
The flip side of resident portals making life easier for residents, of course, is that they also provide a great convenience to landlords -- for example, cutting down on the work and time needed to process rent collections or maintenance work orders.
"Many [tasks] that used to require residents to go to the office, they can now do on their own, 24 hours a day," pointed out Resite IT`s Starr.
But both property companies and vendors observed that the return on investment of this time savings is not necessarily in lower labor costs, but in better service as site managers are freed up to attend to customer needs, rather than administrative chores.
"It allows your people to spend more time leasing and managing the community, rather than attending to the accounting," said Sawyer`s Flynn. "It keeps the managers in front of the residents which is where you want them."
In implementing resident portals, Cardwell noted that companies should be prepared to support any resident portal systems they subscribe to -- in terms of making sure they have the systems and resources in place to, for example, update the Web sites or respond to online requests.
In implementing resident portals, Goldshine opines that apartment owners should bring their property management software (PMS) provider on board early in the process. This is because the PMS holds the resident data, and eventually, the PMS company`s cooperation would be needed in linking the resident portal to the resident information. In selecting vendors, as a general rule, apartment companies should look at the vendor`s financial backing and R&D commitment, he advised.
Goldshine pointed out that apartment companies also should ensure the PMS and the resident-portal vendors effectively work together to ensure the existence of firewalls, which are needed to protect the company`s most intimate data now that new users, namely residents, are being brought into the system.
Property Managers: Portal Appreciation
Needham, Mass. -- For Mike Flynn, chief technology officer of Sawyer Realty Holdings here, the cost of a resident portal is very low "for what we get out of it."
What Flynn said he values most about resident portals is their online rent-payment feature. Rental payments on the Web site are integrated on the back end to the company`s accounting systems.
Furthermore, residents pay directly from their bank accounts -- compared to dropping off a check at the office, which means the site office has to key in the information, make a deposit slip and make a trip to deposit the checks at the bank.
Sawyer, which owns and manages some 68 properties along the East Coast from New Jersey to Florida, subscribed to Resite IT`s ResidentPortal, as well as its ResidentPay and ResidentWorks modules.
"We felt Resite IT gave us the biggest bang for the buck," said Flynn. "The site stays fresh, without much work on our part." Flynn also cited the syndicated content -- news, weather, etc. -- that the Web service brings to the portal.
What is valuable about resident portals to another recent convert is the must-have Internet marketing opportunity and presence they offer.
"The Internet is a very viable part of marketing apartment communities in this day and age," said Sue Cazier, president of Rema Inc., a Salt Lake City, Utah-based third-party apartment manager that oversees about 2,000 multi-housing units locally. "Even for smaller properties, it is very important to be on the Internet. You will miss market share if you`re not."
For Cazier, one of the most important considerations in selecting a vendor is the level of service from its staff. Cazier said Property Solutions International Inc. was able to bend its program to fit the company`s needs -- such as reducing the number of pages on the Web sites of some of the smaller properties in order to reduce the costs.
"A Web site that costs $1,000 to design is overkill for a smaller property," she explained. "Why spend [two] months` rent to design a Web site?"
Rema is subscribing to Property Solutions` ResidentPortal program to allow residents to apply for apartments, pay rent and submit work orders online, said Cazier. Prospects also have the convenience of being able to pay their deposits online.