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Energy costs are on the rise, making it increasingly challenging for multifamily owners and operators to hit their NOI goals. If you’re feeling the pressure, these eye-opening data points will show you you’re not alone and that effective solutions are available.
Keep reading to discover how smart technology can help you significantly lower energy costs and boost your bottom line.
1. Multifamily residents spend $123/month on electricity
In 2024, multifamily residents faced an average monthly electricity bill of $123, marking a 32% increase compared to 2020.
Because of the constant increase in electricity costs, more than half (58%) of U.S. multifamily residents perceive energy costs as too high. And it doesn’t stop there - this figure rises to 67% among Californian MDU (multi-dwelling unit) residents and 65% among Texan MDU residents.
This upward trend in utility expenses can impact residents' financial stability and influence their rental decisions, underscoring a critical need for solutions that provide relief.
Luckily, smart apartment technology is an efficient and viable solution to help residents and multifamily owners cut costs.
2. Smart tech reduces energy and water costs by 18%-19%
That was a pleasant surprise for many MDU owners, who in 2021 expected just 9%-12% savings. In 2024, MDU owners reported average actual savings of 18%-19%, thanks to smart apartment energy and water solutions. And some owners are saving even more. One MDU operator reported 20%-30% annual savings after installing smart thermostats and peripheral sensors.
These results mark a significant caveat to the rise in energy costs for multifamily owners and operators. Those investing in smart apartment technologies can shave upwards of 1/5th off of their energy and water bills.
3. $3.4 billion in potential utility savings for multifamily properties
The American Council for an Energy Efficient Economy (ACEEE) highlights that multifamily energy efficiency holds the potential to save $3.4 billion in total annual utility costs.
Given that the vast majority of multifamily households are rented apartments, this represents a substantial opportunity for the rental industry.
Smart apartment devices, including thermostats, sensors and lighting, are crucial for maximizing these energy savings. For instance, one MDU owner reported annual utility savings of $500,000 across 15 communities after implementing smart thermostats and boiler controls.
4. See smart tech ROI in just 6-24 months
While the upfront investment for smart devices can be significant, particularly for large communities, the substantial savings generated lead to a rapid return on investment (ROI).
Most MDU owners and operators recover their investment quickly—typically within 6 to 24 months. This swift ROI makes smart thermostats and peripheral sensors a compelling 'easy win' and an attractive proposition for investors.
5. 50% of multifamily owners with smart technology have fully integrated smart thermostats
Despite the evident potential for savings and rapid ROI, many communities have yet to fully leverage smart technology.
As of 2024, only half of multifamily owners and operators using a smart building platform or aggregator reported having smart thermostats fully integrated into their systems. Their primary challenge is achieving seamless integrations across diverse proptech solutions and ensuring consistent WiFi connectivity for remote control by residents and community managers.
The good news is SmartRent addresses both of these critical issues. We employ a collaborative approach with other proptech vendors, offering more comprehensive integrations than any other provider.
Our Community WiFi solution also ensures devices remain connected 24/7, eliminating reliance on residents to purchase connectivity from an internet service provider (ISP). This adds value for both MDU owners and residents.
Grow your NOI through energy savings
Ready to transform rising energy costs into measurable value growth for your multifamily community? Explore how smart, energy-saving technology can make a tangible difference.
Download our comprehensive multifamily NOI report, created in partnership with Parks Associates, to gain deeper insights.