More Apartment Firms Investing in New Technology

A new survey published by the Washington, D.C.-based National Multi Housing Council (NMHC) shows that technology has become a core part of the apartment industry's business model in the last 10 years, leading firms to allocate a greater portion of their capital budgets to support new technology deployment.

The report, Information Technology Investment Benchmarking Survey, allows NMHC members to compare their IT spending and staffing levels with those of their peers.

Key findings of the research include:

• Respondents spend 0.7 percent of their gross revenue on IT (not including telecommunications services offered at the property level).
• Of that, approximately 19 percent is spent on discretionary projects intended to improve revenue. Nearly 20 percent is spent on consultants, and 12.6 percent is spent on outsourcing.
• The smallest firms (gross revenues averaging $35 million) spent nearly 60 percent of their IT budgets on external resources - 30 percent on outsourcing and 27 percent on consultants. This compares with larger firms (averaging $377 million in gross revenues), where outsourcing accounts for just 3 percent of their IT budget and consultants account for 15 percent.
• When analyzed on a "spending-per-unit" basis, medium-sized firms (15,000 to 29,999 units) have the largest IT expenditures, spending $243 per unit. The largest firms (70,000 units or more) spend just $75 per unit on IT-related expenses, and smaller firms (9,000 to 14,999 units) spend $71 per unit. This wide variance may occur because larger firms tend to be early adopters of new technologies. As a result, they've already absorbed the large start-up costs associated with deploying new systems, and are now spending less on a per-unit and gross-revenue basis to maintain those systems. Medium-sized firms, on the other hand, may be closer to the roll-out phase (and, thus, the higher costs associated with an initial system deployment) while smaller firms have yet to pursue large technology initiatives.
• In terms of staffing, apartment firms average one IT staff person for every 110 employees. The coverage ratio jumps when looking strictly at IT Help Desk staffing levels. On average, firms provide one IT Help Desk staff person for every 172 employees.