We’ve written before about the move to over-the-top OTT streaming applications and the need for increased bandwidth, especially among younger renters and condo buyers. Further research shows how faster Internet availability can add homeowner value. As recently as April of 2014, RVA Market Research and Consulting conducted a national study that found that fast internet/broadband was rated the single most important home amenity amongst condominium owners and the most important media amenity amongst both owners and apartment renters.
The same study also found a distinct correlation between overall resident satisfaction and the availability of Fiber-to-the-Home (FTTH). Buildings with FTTH service have lower churn rates and residents are more satisfied with reliability, consistency of speed, upload/download, and video streaming experience with their service. Let’s say you’re convinced that you’d like to offer faster service at your building. What are your next steps?
Partnering with CondoInternet as a service provider can be part of the solution. We believe in building for the future, are committed to making ongoing network and equipment upgrades to ensure that we continue to offer market-leading speeds and performance. While gigabit is today’s standard, we’ll continue to push ahead to provide 10 gig and whatever the future standards will be.
CondoInternet brings fiber to your property and provides all of the equipment necessary to deliver a best in class customer experience. However, we use existing wiring to deliver our service to residents. At this time, cat5, cat5e or cat6 wiring is needed to enable a gigabit connection. If you’ve got cat3 the best we can do is 100 mbps and if you’ve got even older phone wire, we may not be able to provide high-speed service.
The clear link between the availability of FTTH technology and resident satisfaction illustrates the importance of equipping every building with the proper wiring to support FTTH technology. Bob Bush of BnB Cable Contractors estimates that approximately 50% of buildings built before 2000 in the Seattle area are wired with coax, cat3 wiring, and even in some cases older traditional phone lines. Most of the time, coax lines are used exclusively by cable providers in the building and cat3 lines only support 100 Mbps speeds at the fastest via Very-high-bit-rate-digital-subscriber (VDSL) line technology. There are a number of different wiring methods to provide gigabit speeds to individual units. At CondoInternet, we can provide gigabit service in buildings with cat5 or newer wiring, delivering service to each individual unit via Ethernet cable.
The Cost Concern
For apartment and condo management teams, there is the question of whether it is worth the money to invest in an upgrade to provide FTTH. The cost of re-wiring is roughly $300 – $600/unit. Wondering how quickly your building could recoup those costs? We’ve done the math.
For an apartment building with a 100-unit property, and at an average cost of $450/unit, you’re looking at a cost of $45,000 total. According to a study by RVA Research, the availability of FTTH positively influences rental value by 8%. Assume the average resident pays $1000/month for rent at an apartment community. At $450 per unit, the cost to re-wire could be recouped by an 8% increase in rent over just six months. For condos, the perceived increase in value is roughly 3%. So, at $450 cost to upgrade each unit, a condo worth $300,000 would increase in value by $9,000 to a total of $309,000. The $450 upfront cost to wire the unit pays off 20-fold in just one year.
Convinced the cost will pay off but concerned about the execution? Our team can offer input on build plans and introduce you to vendors who will do the actual construction. Throughout the process, we stay in touch to make sure everything is going according to plan and quickly bring our service in when the re-wiring is complete.
Success at the Highlander Condos
Last year, we partnered with the Highlander Condominiums, a 64-unit condominium complex on Capitol Hill, built in 1965. The original wiring at the building – 1960s-era phone lines – could only support a 5mbps download connection through DSL, and the more modern coax was being used for DirecTV TV service. After an increasing number of residents and potential buyers brought up questions regarding the availability of high-speed broadband in the building, the building’s HOA started looking into alternative high-speed internet options. Says Ian Bergman, a member of the Highlander HOA Board: “What we saw in the last few years, as far expectations of residents – was that it [slow internet] had become less and less acceptable. A number of new buyers were coming in asking ‘What data services are available to me?’ and no one is happy when your answer is ‘low-speed DSL.'”
In Fall of 2013, the Highlander HOA approached us to ask whether we could offer our gigabit internet service over the building’s existing wiring and if not, what steps needed to be taken to upgrade the wiring in order to deliver it. Upon surveying the building, our technicians quickly discovered with the members of the Highlander HOA suspected – the building had no adequate conduit in place to bring cat-5 or better ethernet cabling from a central access point to each individual unit. After getting a successful majority vote from all the owners in the building, the Highlander began the process of upgrading their wiring – completing the process in about four months. Residents the building are thrilled to have a new option for an internet service provider.
Today, brokers feature the availability of gigabit service from CondoInternet at the Highlander in housing listings and can tell buyers that – with their new wiring- the building is able to offer the best of all worlds: 2015 technology plus the charm of a vintage building.
With device usage increasing exponentially, the transition to FTTH in apartments and condos is becoming inevitable. Imagine future homes where the heating system operates by voice command through smart appliances which connect via the internet. These, and other smart home integrations, may not be far off. Upgrade your wiring to provide what the tech-savvy resident wants now, and what the resident of the future will require.