The Trends: Apartment Firms Armed with Mini IT Budgets

According to the National Multi Housing Council’s Information Technology Investment Banking Survey, respondents reported that they shell out just 0.7 percent of their gross revenue on IT, excluding telecommunications services at the property level. Of that 0.7 percent, however, almost 20 percent is allotted to consultants. Respondents appear to be similarly interested in discretionary projects aimed at bolstering revenue, as 19 percent is spent on such initiatives. Interestingly enough, those surveyed spend 12.6 percent on outsourcing. However, Dave Cardwell, vice president of technology and capital markets for the National Multi Housing Council, contended that the apartment sector has embraced technology in several aspects of their operations. “They use it to recruit and retain both residents and employees, they use it to improve their ability to serve their existing residents and they use it to streamline their operations and reduce costs.”Firms with gross revenues that average $35 million shell out 30 percent for outsourcing and 27 percent for consultants. Yet companies that earn an average of $377 million in gross revenues spent a mere 3 percent of their IT budgets on outsourcing and 15 percent on consultants. In spending per unit, medium-size firms—which the council classifies as firms with 15,000 to 29,000 units—spend the most on IT initiatives: $243 per unit. That is more than three times what the largest firms—those with at least 70,000 units—which shell out only $75 per unit on IT projects. Not too far behind are smaller firms—9,000 to 14,999 units—which spend $71 per unit on IT-related expenses.“This wide variance may occur because larger firms tended to be early adopters of new technologies,” the National Multi Housing Council noted. “As a result, they have already absorbed the large startup costs associated with deploying new systems and are now spending less on a per-unit and gross-revenue basis to maintain those systems. Mid-size firms, on the other hand, may be closer to the roll-out phase (and higher costs associated with an initial system deployment), while smaller firms have yet to pursue large technology initiatives.”