Community WiFi — a growing proptech opportunity that allows residents and staff to stay seamlessly connected anywhere on property — delivers the best WiFi experience and the best revenue opportunity compared to other multifamily internet models. It can be a huge value-add for residents, but it can also benefit multiple dwelling unit (MDU) owners in big ways — if they play their cards right.
Here’s how you can increase your revenue, increase resale value, satisfy investors and support environmental, social and governance (ESG) initiatives with Community WiFi.
1. Community WiFi increases revenue
Community WiFi typically requires a significant upfront investment, whether you’re including it in a new build or retrofitting an existing property. However, our research shows that the revenue it generates more than makes up for the cost. Many communities recoup their initial investment in two or three years, replace equipment every five to seven years and add recurring income to their bottom lines. How much revenue they net depends on the conditions in their market and whether they build their own infrastructure.
How to maximize revenue from community WiFi
How well community WiFi monetizes for you depends on a few variables. The biggest variable is what kind of deal you can strike with your internet service provider. The good news is, if you invest in your own infrastructure, contract terms are usually better because you’re not relying on the provider to run wires.
Invest in your own infrastructure
Building your own infrastructure can increase initial costs but help you earn more in the long run. Some providers will build the infrastructure for you but stipulate that you can’t use it with another provider, leaving you at their mercy. But if you build your own infrastructure, no one can stop you if you decide to change providers.
Understand your market
Another factor that can affect your revenue is the internet landscape in your area. If internet service is typically slow and expensive near you, you could have a greater opportunity to provide better service at a lower price — while significantly boosting your income as well. Luckily, the Federal Communications Commission (FCC) has a broadband map that lets you check out which providers serve your area and with what speeds.
Set the right price point
Ultimately, how much you charge for WiFi depends on what you offer and who your renters are. According to Consumer Reports, the median amount people pay monthly for internet service is $75 . Not surprisingly, many people are willing to pay a lot less for an excellent connection.
Our research shows that 79% of people living in luxury communities are willing to pay $49.99 for 300 Mbps community WiFi and $79.99 for Gigabit community WiFi. But fewer people in affordable housing communities (57% and 37%, respectively) are willing to pay these rates.
2. Community WiFi increases resale value
MDU buyers want to know that your property will cash flow well, and the increased revenue from community WiFi helps with that. But they also want to know that they can continue to achieve low vacancy rates and see high appreciation.
If you plan to sell your property soon, community WiFi can help you sell faster and at a higher price. But you may need to point out these benefits when you market the property to buyers. Our research can help with that.
How community WiFi keeps vacancy low
Community WiFi is in high demand. More than half (51%) of residents who have managed WiFi (including community WiFi) say this internet option was a deciding factor in choosing where to live.
Typically, net promoter scores (NPS) — a measure of whether residents would recommend something to others — are notoriously low for internet service. But managed WiFi scores an average of 12 points higher than retail internet.
Especially telling is the data around what renters will be looking for in a future apartment. People rated internet service about as important as laundry facilities and good insulation and soundproofing. That means it’s more important than covered parking, pet friendliness and TV service.
How community WiFi boosts appreciation
Many multifamily buyers want to know that their purchase will continue to appreciate over time. The more you can do to showcase how you’ve future-proofed the property, the better.
Today, about 80% of residents have retail internet — that is, a direct contract with a provider. Just 3% have managed WiFi, and 1% have community WiFi. In part, that’s because owners haven’t been able to fund a community WiFi upgrade. Many more owners are locked into exclusive contracts with an internet provider, so they’re still years away from being able to implement community WiFi.
If you can offer a community with a turnkey WiFi solution that renters want — while generating increased income — your property will look a lot more appealing.
3. Community WiFi satisfies investors
Investors value some of the same things as buyers: cash flow, low vacancy and appreciation. To impress investors even more, have a plan for financing your community WiFi investment based on investor goals.
Ways to finance community WiFi
Vendors have different ways of financing community WiFi, but most methods fall into two groups: CAPEX (capital expenditure) and OPEX (operational expenditure).
The CAPEX method involves financing the project directly as part of your capital expenditures budget and retaining a high share of the revenues generated by community WiFi. This method is usually best for larger companies with investors who favor a buy-and-hold strategy. If you invest under CAPEX, you’ll see a higher return on your investment.
The OPEX method involves spreading out your costs over time and noting them as recurring operating expenses. You might rent your equipment instead of buying it, for example. This method is usually best for smaller companies or those with investors who favor holding properties for a shorter period of time.
4. Community WiFi supports ESG initiatives
ESG initiatives — those that support responsible environmental, social and governance stewardship — are growing in popularity. Many companies lean on ESG initiatives and investments to earn tax breaks, increase brand reputation and help improve their neighborhoods.
Community WiFi can help you reach your ESG goals in two ways: by supporting smart technology and improving local internet access.
How to support smart technology
Community WiFi is one of the best ways to start investing in proptech because it lays the groundwork for other smart upgrades — some of which improve sustainability in your communities. When your entire property has WiFi coverage, it’s much easier to add Smart Apartment technologies.
Smart thermostats make it convenient for each resident — and your team — to do their part to conserve energy. People can automate temperature regulation by time of day, season and more. Meanwhile, leak sensors help avoid water damage, which can destroy valuable materials and cause you to use more resources to make repairs.
How to improve local internet access
Today, internet is critical for the wellbeing of any community. Being able to browse, communicate and work online can improve education, income, health, social ties and civic responsibility. But struggling with a poor connection or slow speeds — common WiFi problems in densely populated areas like apartment buildings — can make all of these things harder.
The greatest need for affordable internet is, of course, in affordable housing communities. But providing quality, reliable service can help any community.
Conclusion
Community WiFi comes with some huge benefits for owners, including additional revenue opportunities, an increase in resale value, investor satisfaction and support of ESG initiatives. The owners we’ve spoken to love it, and financing options are available. If you’re considering implementing community WiFi — whether as a new build or a retrofit — learn more about how to deploy this technology.
Not sure how to take your multifamily community to the next level?
Planning and implementing your next smart proptech upgrade isn’t easy, but that’s why we’re here. Our experts can help you figure out how to make your community Next-Level Smart™ — and get the most value from your investment.