A Cost-Benefit Analysis That Pays Off: Why You Should Invest in Real Estate Management Software
- Nico Pohl
- 1 day ago
- 4 min read
Everyone knows the problem: there are great new technologies or software solutions that get you excited right away—at least until the conversation turns to price. Thanks to digitalization, we can work faster, more efficiently, and—so it’s suggested—even cheaper. But does it really add up?
Starting Point
In this article, we want to present an easily understandable cost-benefit analysis focused on software investments in the area of sustainability. Why sustainability? Because the pressure on companies to implement eco-friendly practices is enormous these days. This pressure comes not just from politics and new regulations like the EU Directive on Energy Performance of Buildings (EPBD), but also from society, which demands that businesses take responsibility for the environment.
At the same time, sustainability is often not directly linked to a company's value chain, resulting in insufficient budget allocation. Out of fear of making hasty or even wrong decisions, many prefer to wait.
A cost-benefit analysis is often a good tool for making decisions for or against an investment.
Solution Approach: Smart Energy Management Software
Intelligent energy management software optimizes the operation of heating, ventilation, and air conditioning (HVAC) systems by collecting real-time data from various sensors in the building and automatically adjusting them. Existing building management systems (BMS) and additional IoT sensors for temperature, air quality, CO₂, and occupancy can be used if relevant data is missing. This allows energy consumption to be managed efficiently, heating, cooling, or ventilating only when necessary—without compromising comfort.
Cost Reduction through Energy Efficiency: By optimizing HVAC operations, energy consumption can be significantly reduced, leading to direct savings in operating costs.
Increased Property Value: Efficient buildings are more attractive to tenants and investors, which can lead to long-term property value appreciation.
Compliance with Regulatory Requirements: Sustainability regulations like the EU taxonomy require energy-efficient buildings. Investments in software facilitate compliance with these requirements.
Easy Implementation: Modern energy management software is often cloud-based, eliminating the need for new physical servers or control units to be installed on-site. Instead, the software can be integrated with existing building management systems (BMS) or IoT sensors. This reduces technical effort and saves costs, as extensive hardware upgrades are unnecessary. Updates and maintenance occur centrally through the cloud, further simplifying operations.
Cost-Benefit Analysis of HVAC Software
Let’s assume a company manages an office building with an area of 10,000 m² and decides to implement software to optimize climate conditioning. Based on experience from multiple projects where software solutions were used across different asset classes such as office buildings, retail, and hospitality, average energy savings for heating, ventilation, and cooling are around 23% to 37% per year. Thus, we estimate a savings potential of 28%. According to a study by the German Energy Agency, the average energy consumption is 136 kWh/m².
At an energy price of €0.30/kWh, this results in an annual savings of €114,240.
The costs for a software solution like the one considered here average about €2/m² per year. In this case, software is not the only cost driver. Hardware also needs to be purchased initially. The costs for IoT sensors and energy measuring devices can vary widely based on factors such as sensor type, accuracy, range, manufacturer, and required infrastructure. Temperature and humidity sensors are usually priced between €20 and €100. Air quality sensors, which can measure parameters like CO2 levels and fine dust, can cost up to €200 per sensor. Cheap motion sensors start at €15, while more advanced models can cost up to €100.
Depending on the office layout (individual offices, open-plan offices, etc.) and the additional spaces needed for common areas like hallways, conference rooms, kitchens, and restrooms, the number and type of sensors may vary. Thus, hardware costs are initially left out of consideration.
Input Data:
Building Area: | 10,000 m² |
HVAC Consumption (p.a.): | 1,360,000 kWh |
HVAC Savings (p.a.): | 28 % |
Energy Costs: | €0.30/kWh |
Software Costs (p.a.): | €2/m² |
Annual Savings:
Energy Savings: | 1,360,000 m² x 28 % = | 380,000 kWh |
Cost Savings: | 380,000 kWh x €0.30/kWh = | €114,240 |
Software Costs:
Annual Costs: | €2/m² x 10,000 m² = | €-20,000 |
Savings After Software Costs: | 94.240 € |
In the first year alone, there is thus a cost saving of €94,240 after deducting software costs. With an additional investment of €50,000 in hardware costs, there remains a positive investment already in the first year.
In addition to a positive return on investment, the introduction of smart technology also leads to long-term savings that contribute to the financial stability of the property as well as to its value appreciation. With improved energy efficiency and the increasing demand for modern buildings, the attractiveness of the property for investors and tenants rises, reducing the risk of vacancy.
Conclusion
Despite the initially high investments, the long-term benefits clearly outweigh the costs. Companies that invest early in digital solutions benefit financially while also contributing to sustainability.
Ready for the digital transformation of your real estate management?
At Pogo Consulting, we support companies in implementing innovative real estate software that not only reduces operating costs but also boosts efficiency and increases property value in the long run. Our solutions help you meet regulatory requirements, minimize vacancy risks, and create sustainable, value-stable properties.
Schedule an appointment now and actively shape the future of your real estate management!
References:
Dabbel - Link
Solarimpulse - Link
Recogizer - Link
Dena-Studie - Link
