A San Diego company that started out offering billing services to apartment owners and managers is developing technology and programs that allow landlords and renters to remotely control more of what happens in their apartments.
“We’re investing heavily in the smart apartment tech space,” said Dirk Wakeham, CEO of PayLease. “We think that’s a really promising area as landlords look at ways to differentiate their property.”
Among other things, the smart apartment technology, or proptech as Wakeham called it, allows renters to use their cellphones to remotely control the thermostats and lighting in their apartments and to lock and unlock their doors.
Building owners can use the same technology to monitor and control heating, cooling and other components when apartments are vacant.
That can be especially important in humid climates, where mold can develop inside apartments if moisture accumulates. If temperatures aren’t monitored in cold climates, pipes can freeze and break in winter.
“Property managers can (remotely) see what the temperature is in an apartment,” Wakeham said.
Smart locks give people the freedom to control who can enter their apartments while they’re away without relying on property managers.
The technology is commonplace in many of the high-end apartment towers going up in downtown San Diego.
To compete, owners of existing apartment complexes are retrofitting the technology into their apartments.
“The residents are what’s driving the demand for these services,” Wakeham said. “With millennials, they want everything online.”
Still to come is technology that will allow landlords and renters to remotely set apartment locks to open on a predetermined schedule using a code to admit people for appliance repair and other services, Wakeman said.
“Residents can issue temporary codes to their guests, house cleaner, their dog walker — all of that,” he said.
Self-Guided Property Tours
The same technology would allow property owners to remotely admit prospective renters to tour apartments without having someone else looking over their shoulders giving them a sales pitch.
“They want to go look at it, stand in it and not have the property agent looking on. They want to do it themselves,” Wakeham said. “They don’t want to be pitched.”
Preliminary data shows that people are twice as likely to rent an apartment they’ve explored on their own as they are an apartment they’ve been shown by an owner or manager, Wakeham said.
Landlords also like the idea of self-guided apartment tours because it cuts their management costs, he said.
“It reduces their service costs,” Wakeham said. “The promise of being able to self-show apartments is of great interest.”
Worth the Cost
Smart technology can add $15 to $25 to monthly rental fees, Wakeham said, but he said renters are willing to pay more for the smart home services.
“Residents are more than willing to pay a rent premium to get access to those technologies,” Wakeham said. “We are seeing increasing demand.”
Formed in 2003, PayLease is headquartered in Sorrento Valley with offices in Chicago, according to its website.
“We started as an online payment company,” Wakeman said. Over time, the company added utility billing and gradually expanded its services.
“We essentially provide a tech solution for rental real estate,” Wakeham said.
The company has two primary products — Engage, which it describes as “a mobile-first engagement platform that allows residents to pay rent and utilities, submit work orders, communicate with staff, access third-party resident services” and Smart, which it says “provides a one-stop-shop for smart apartment setup and ongoing management.”
With that program, “smart home devices are integrated into a custom-branded mobile app” that is controlled from a smartphone or desktop computer.
The company has grown to have about 290 employees, serves more than 4,500 property management companies with 12.5 million apartments.
In 2019, the company “is approaching $100 million in revenue,” Wakeham said.
PayLease in May acquired Zego, a real estate software firm that provides smartphone apps.
In November, PayLease expanded a partnership it’s had with MRI Software based in Cleveland.
“Renters want to be connected and managers want to drive NOI (net operating income), so our goal is to make these technologies more accessible,” Wakeham said.