Smart thermostats are transforming energy management for multifamily property operators. These Wi-Fi-enabled devices automate HVAC systems, cut energy waste, and allow centralized control across large portfolios. By learning resident routines and adjusting temperatures automatically, they reduce energy consumption by 10–15% on average. For property managers, this means lower utility bills, fewer maintenance issues, and happier tenants.
Key Takeaways:
- Energy Savings: Reduce heating and cooling costs by up to 23% with features like vacancy detection and zoning.
- Tenant Appeal: 72% of renters prefer properties with smart thermostats, boosting tenant retention and satisfaction.
- Cost Efficiency: Properties report annual savings of $500,000 across 15 communities, with ROI often achieved within 6–24 months.
- Centralized Control: Manage HVAC systems across multiple buildings remotely, saving time and resources.
- Government Incentives: Rebates and tax credits make these systems more affordable.
Smart thermostats are not just a tool for energy savings - they simplify property operations, improve tenant comfort, and increase property value. With rising utility costs and growing demand for energy-efficient living, they’re a smart investment for multifamily operators.
ePropertyCare: Smart Building Technology with Jeff Hoch & Charles Hadsell
Core Benefits of Smart Thermostats for Multifamily Operators
Smart thermostats bring a range of advantages to multifamily property operators, extending well beyond energy savings. These devices streamline property operations while improving the quality of life for residents.
Energy Cost Savings Through Automation
One of the standout features of smart thermostats is their ability to learn and adapt to residents' routines, optimizing energy use automatically. By adjusting temperatures based on occupancy, these devices can cut HVAC energy consumption by as much as 23%, with many properties seeing heating and cooling cost reductions of 10–15% [2][6]. For multifamily property managers, this translates to substantial savings - some report a 19% drop in energy expenses annually across large portfolios [3].
Smart thermostats also detect when units are vacant and adjust accordingly to avoid wasting energy [4]. Zoning capabilities further enhance efficiency by allowing different areas of a building to be heated or cooled independently, ensuring no energy is wasted in unused spaces [5]. Beyond just saving money, these systems contribute to tenant satisfaction and help protect the property itself.
Better Resident Comfort and Property Protection
Smart thermostats not only save money but also elevate the living experience for tenants. Research indicates that 82% of renters prefer having at least one smart device in their home, making smart thermostats a valuable feature for attracting and retaining residents [6]. These devices also act as an early warning system, notifying both residents and property managers about potential HVAC issues before they become costly repairs [12].
By maintaining consistent temperatures, smart thermostats help prevent problems like frozen pipes during cold weather. On average, they can reduce residents' energy bills by about 15% [12].
"All Ecobee smart thermostats can help save up to 26% on heating and cooling costs by reducing energy usage. When paired with our smart sensors, we can save even more money by optimizing heating and cooling for specific rooms and automatically pausing your HVAC system when a door or window is open." [11]
Centralized Control Across Large Portfolios
For operators managing hundreds of units, centralized control is a game-changer. Smart thermostats allow property managers to monitor and adjust HVAC systems across multiple buildings from a single dashboard, whether they’re on-site or working remotely [8]. This provides a clear, portfolio-wide view of energy management, ensuring consistency across all properties [7].
"Smart thermostats allow operators to centrally control temperatures across multiple units, ensuring energy isn't wasted and that buildings operate efficiently." [6]
With centralized control, operators can push bulk updates and implement custom energy profiles across entire portfolios [7]. They can also identify high-consumption properties and address inefficiencies in real time, with some properties achieving up to a 45% reduction in HVAC runtimes through these optimizations [10]. Additionally, centralized monitoring enables quick responses to energy trends, maintenance needs, and tenant comfort concerns, minimizing the need for staff to visit individual units for adjustments [9][10]. This system empowers operators to make informed, data-driven decisions, ensuring energy efficiency and operational consistency across the board.
Case Studies: Examples and ROI Data
Case studies clearly show how deploying smart thermostats in multifamily properties can lead to impressive savings and quick payback periods across various markets. These real-world examples highlight the practical advantages of centralized energy management and automation.
Energy Savings and ROI Examples
At The Park at Salisbury in Virginia, installing ADT Multifamily smart thermostats resulted in a 50% reduction in electric costs for vacant units[13]. This significant drop was achieved by efficiently managing energy use during turnover periods - a common challenge for multifamily operators.
Oxford House Apartments in Ossining, New York, an older 34-unit building with a hydronic gas heating system, saw remarkable results with smart heating controls. In December 2020, Milio Management installed the Stealth Boiler Control and Energy Management System. After just one heating season, the property reduced gas usage by 24%, saving $5,475[17].
Student housing also benefits greatly. For instance, University Heights Apartments in Texas, a 300-unit student housing property, implemented smart thermostats in 2022. Within the first year, they achieved $52,000 in energy savings, a 35% drop in maintenance calls, and 25% higher resident satisfaction. The investment was recouped in just 16 months, proving that these systems deliver more than just energy savings[18].
In another example, one multifamily operator reported annual utility savings of $500,000 across 15 communities after incorporating smart thermostats and boiler controls[14]. Similarly, another operator achieved 20%-30% annual savings by installing smart thermostats and sensors portfolio-wide[14].
Beth Zinsky, a multi-site property manager at Westminster Management Group, highlights the operational benefits:
"Most people think these devices are for the residents, but property owners should really be looking at ADT Multifamily systems for what they do for onsite staff."[13]
Her point is echoed by maintenance teams, who find that remote thermostat controls save significant time. As one operator explained:
"The biggest benefit for the maintenance teams is time. Being able to control the thermostat remotely can save lots of time for maintenance workers who no longer have to walk all the way around the building from the outdoor air conditioning unit to the thermostat inside. Smart locks also save workers time because with very few residents getting locked out, workers don't have to come to the office to pull keys."[13]
Factors That Affect ROI and Payback Periods
While the savings are evident, several factors influence how quickly operators can see returns and optimize their strategies.
- Property size and portfolio scale: Larger portfolios often benefit from bulk purchasing and centralized management, leading to faster payback periods. For example, properties with over 300 units report 18%-20% annual energy cost savings and a 20%-30% reduction in energy use[15][16].
- Climate and utility rates: Properties in areas with extreme temperatures and higher electricity costs tend to save more. With the average multifamily resident spending $123 per month on electricity[14], energy efficiency measures are especially valuable in high-cost markets.
- Building age and HVAC efficiency: Older buildings with outdated HVAC systems often experience the most significant savings, while newer properties may integrate more easily with smart systems but have lower baseline energy consumption.
- Resident behavior and occupancy patterns: Properties with frequent vacancies, like student housing, often see greater savings due to the ability to optimize energy use during unoccupied periods.
- Market positioning and rent premiums: Smart amenities can justify rent increases of 5%-10%, often achieving payback within three years[15].
Kristen Hanich, research director at Parks Associates, underscores the importance of proper deployment:
"It can be difficult for companies to determine the best strategies and benchmarks to measure ROI from smart building solutions, so naturally many properties are hesitant to make such large-scale investments."[15][16]
She emphasizes that when implemented correctly, smart building technologies can significantly improve operations and resident satisfaction:
"Our research and interviews show smart building technologies, when properly deployed and managed, can have significant positive impacts on operations and resident satisfaction, so it is important to take the guesswork and uncertainties out of these deployments."[15][16]
The most successful properties track a variety of metrics - energy costs, maintenance efficiency, resident satisfaction, and revenue changes. By doing so, they typically recover their investment within 6 to 24 months[14].
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Best Practices for Installing Smart Thermostats in Large Portfolios
Rolling out smart thermostats across multifamily properties requires thoughtful planning, bulk purchasing strategies, and seamless system integration. These steps not only ensure a smooth installation process but also maximize energy savings and return on investment.
Bulk Purchasing Programs for Multifamily Operators
Buying in bulk can significantly cut costs for multifamily operators. Many manufacturers offer discounted pricing and pre-programming services, making installation and management more efficient. As ecobee’s sales team notes:
"Our complete thermostat management solution is affordable for multifamily and commercial businesses of all sizes. Contact our sales team to get a quote on bulk thermostat pricing." [21]
Reaching out to manufacturers' commercial sales teams can unlock these savings and simplify the setup process. Additionally, utility rebate programs can lower upfront costs. For instance:
- Duke Energy: Offers a $50 instant rebate and an additional $75 discount for properties that pre-enroll in their Power Manager program.
- NYSEG: Provides a $75 automatic rebate at purchase, plus another $70 rebate for enrolling in their Smart Savings Rewards program. [22][24]
- Cape Light Compact: In 2024, offered up to $100 rebates per ENERGY STAR certified smart thermostat, capped at three units per customer. [23]
Installation Planning and Resident Communication
A successful deployment starts with a thorough assessment of the property’s infrastructure. Check Wi-Fi coverage and network capacity to ensure each unit has a stable 2.4GHz connection. For example, Petrucci Residential, in partnership with Nationwide Energy Partners, achieved a 10% reduction in energy costs at Jacksonville Station in Warminster, Pennsylvania, through careful planning and execution. [19][20]
Keeping residents informed is also key. Provide at least two weeks' notice before installation, outlining the benefits, the schedule, and any potential disruptions. Training on-site staff to handle troubleshooting, assist residents, and manage the system is equally important. This ensures the centralized control features deliver their full potential. [19]
Security should never be overlooked. Implement robust protocols to safeguard resident data and system integrity. This includes access controls, data retention policies, and breach response plans. Communicate these measures clearly to build resident trust during the installation process.
Connecting Smart Thermostats with Property Management Systems
Integrating smart thermostats with property management systems allows operators to centralize key functions like resident information, maintenance tracking, and automation settings. Choosing software with advanced analytics and automation tools enhances the ability to predict maintenance needs, optimize energy use, and even adjust rent pricing. [25]
Universal compatibility with HVAC systems is another consideration. Thermostats that work across various heating and cooling setups simplify operations and enable consistent programming for occupancy settings across the portfolio. Remote access further empowers managers to monitor and control thermostats in real time, ensuring quick responses to maintenance issues and better energy efficiency. [7]
David Bitton, Co-founder at DoorLoop, emphasizes the value of these upgrades:
"Upgrading to smart thermostats can be a wise investment for rental properties. These devices combine cost savings (through reduced energy bills) with modern comfort and convenience that today's renters appreciate." [1]
Integrating tenant portals with thermostat data adds another layer of functionality. Residents can submit maintenance requests and view energy usage reports, promoting engagement and offering feedback on system performance. Additionally, participating in demand response programs and utility rebates can shorten payback periods, as utilities often provide incentives for allowing remote temperature adjustments during peak demand times. [7]
To maximize energy savings, train staff to monitor energy reports, identify inefficiencies, and adjust settings as needed. This ongoing optimization typically leads to a 10–15% reduction in energy use. Property owners have also reported maintenance cost savings of 11–15% when leveraging integrated smart apartment technology. [1][26] By linking thermostats to management systems, operators can streamline maintenance tasks and drive further energy efficiency across their portfolios.
Using Data to Improve HVAC Performance
Smart thermostats are reshaping how multifamily property operators manage HVAC systems by providing detailed performance data. This data goes well beyond simple temperature readings, offering insights into energy use, system efficiency, and maintenance needs across multiple properties.
Finding Inefficiencies and Maintenance Issues
With sensors monitoring temperature, humidity, and air quality, smart thermostats provide real-time data that helps property managers stay ahead of potential HVAC issues. By identifying problems early, managers can schedule maintenance proactively, avoiding costly repairs down the road. For example, if a unit runs longer than others to reach the same temperature, it could signal insulation problems or equipment inefficiencies. Smart thermostats flag these anomalies, allowing teams to address them before they escalate [27][28].
Maintenance alerts and diagnostics from smart thermostats also help prioritize tasks. Instead of sticking to rigid schedules, maintenance teams can focus on units that actually require attention. This targeted approach not only reduces unnecessary service calls but also ensures critical issues are handled promptly [28][30].
Beyond identifying problems, this data also plays a role in optimizing energy usage across entire portfolios.
Improving Energy Usage Across Portfolios
Smart thermostat data allows operators to analyze energy consumption patterns and make informed adjustments. By pinpointing peak energy usage times, operators can optimize HVAC schedules and minimize waste [27]. Instead of relying on assumptions, they can base temperature settings on actual usage patterns.
Machine learning takes this a step further by enabling thermostats to adapt to residents' unique behaviors. These systems automatically adjust settings to maintain comfort while reducing energy consumption, eliminating the need for constant manual oversight [7].
Seasonal data analysis can uncover even more opportunities for savings. A study involving 7,800 homes in Ontario and Québec, Canada, demonstrated how a Model Predictive Controller could lower energy costs by preheating homes before high-price periods. This approach also improved thermal comfort, showcasing the potential of smart thermostat data for strategic energy management [31].
Operators can use these insights to identify units with consistently high energy usage. Whether the cause is resident behavior, equipment issues, or building characteristics, this data helps pinpoint areas for improvement. Detailed reports on energy costs and trends further enable operators to set realistic reduction targets and monitor progress across their portfolios [7].
Planning Long-Term Capital Improvements
Smart thermostat data isn't just valuable for day-to-day operations - it also guides long-term planning. By analyzing historical performance, operators can identify HVAC systems that underperform or frequently require repairs. This information helps prioritize capital improvement projects and budget for replacements before systems fail completely [32].
Energy consumption trends across different properties can reveal which buildings would benefit most from upgrades. For instance, properties with high energy use per square foot might need better insulation, new windows, or updated HVAC systems. This data also strengthens the business case for energy efficiency projects. By using historical savings data, operators can project returns on investment and secure funding for larger improvements [2].
Predictive maintenance is another benefit. Smart thermostats can detect irregularities in HVAC performance, helping operators plan maintenance schedules more effectively and avoid costly emergency repairs. This not only reduces downtime but also minimizes disruptions for residents [7].
Michael Siemann, a distinguished engineer at Resideo Technologies Inc., emphasizes the importance of data-driven energy management:
"There is a significant amount of energy wasted to maintain high levels of comfort when people are not in the home." [29]
This insight underscores how smart thermostat data can uncover hidden opportunities for energy savings, supporting both immediate operational changes and long-term strategic planning for multifamily properties.
Conclusion: Why Smart Thermostats Are a Good Investment
Smart thermostats bring tangible benefits by reducing energy use, improving operational efficiency, and offering valuable data insights. For multifamily property operators, these devices represent an opportunity to lower costs while enhancing tenant comfort. With HVAC systems typically consuming 40–70% of a commercial property's energy budget, the potential for savings is substantial[33].
Deployments have shown impressive results, cutting HVAC runtimes by up to 45% and delivering annual energy savings of 18–20%. Even modest savings per unit - like $10 per month - can add up to millions in annual returns across large property portfolios. As SmartRent Staff explains:
"Efficiency gains compound at scale: Even small per-unit utility savings (e.g., $10/month) translate into millions in annual ROI across large portfolios, making energy efficiency a strategic financial advantage."[10]
Beyond energy savings, smart thermostats help reduce HVAC maintenance costs, saving an average of $250 per home by minimizing emergency repairs and extending equipment lifespan[34]. Centralized control over temperature settings also simplifies management, eliminating the need for manual adjustments across individual units.
For tenants, the ability to control temperatures remotely and customize comfort levels enhances their living experience. These modern conveniences not only meet renters' expectations but also help properties stand out in competitive rental markets. With installation costs and unit prices offering a payback period as short as 16 months, the financial benefits are hard to ignore[18].
Key Points for Multifamily Operators
Smart thermostats provide a clear path to reducing energy expenses while improving property operations and tenant satisfaction. As highlighted earlier, these devices optimize energy consumption, streamline maintenance, and deliver actionable data for better decision-making. For operators managing large portfolios, these insights are invaluable for spotting inefficiencies and planning long-term improvements.
To maximize the benefits, careful planning is essential. Bulk purchasing, seamless integration with property management systems, and clear communication with residents about the technology's advantages are critical steps. Kristen Hanich, Research Director at Parks Associates, underscores the importance of proper deployment:
"Our research and interviews show smart building technologies, when properly deployed and managed, can have significant positive impacts on operations and resident satisfaction, so it is important to take the guesswork and uncertainties out of these deployments."[15]
For multifamily operators, investing in smart thermostats is not just about energy savings - it’s a strategic move toward greater efficiency, happier tenants, and increased property value over time.
FAQs
How do smart thermostats know when a unit is unoccupied, and how does this save energy?
Smart thermostats come equipped with occupancy sensors and advanced algorithms that can tell when a unit is empty. These sensors track activity and temperature trends, and if no movement is detected for a certain amount of time, the thermostat automatically adjusts the heating or cooling to save energy.
This ability to scale back HVAC use in vacant units can lead to substantial energy savings for operators managing large apartment complexes. Beyond cutting costs, it also plays a role in reducing unnecessary energy use, aligning with broader sustainability goals.
What steps should multifamily operators take to successfully integrate smart thermostats with their property management systems?
To seamlessly integrate smart thermostats with your property management system (PMS), begin by confirming that your PMS supports compatibility with these devices. Collaborate with thermostat vendors to choose hardware and software that meet your system's needs. Establish communication protocols between the thermostats and your PMS, typically using APIs or IoT platforms, and define clear data-sharing processes.
Before implementing the system across all units, run a pilot program to test the integration and resolve any potential issues. Ensure your staff is trained to manage the new system effectively, and plan for regular maintenance and software updates to keep things running smoothly. Taking a methodical, step-by-step approach will help you achieve energy efficiency and streamline operations.
What government incentives and rebates are available to help multifamily property operators lower the upfront costs of installing smart thermostats?
Multifamily property operators have access to several federal, state, and utility incentive programs that can help offset the upfront costs of installing smart thermostats. For instance, federal tax credits and ENERGY STAR® rebates can offer savings of up to $50 per thermostat. Additionally, many utility companies provide generous rebates - sometimes as high as $85 per unit. On top of that, certain state programs offer funding for larger retrofits, with potential coverage reaching into the hundreds of thousands of dollars.
These incentives are designed to promote energy efficiency and make the adoption of smart thermostats more affordable. By stacking multiple programs, operators can not only lower their initial investment but also see quicker returns while cutting energy usage across their properties.
