According to TownSteel, 2020 found 40% of Americans are implementing smart home devices, and more than 60% wanted to expand their current setup. This desire for smart connection is not limited to homeowners. Smart home features that help lower their utilities, increase their security, and make life more convenient are a big draw for tenants. They want the option to control and program features like lighting, heating/cooling, and even lock access from anywhere in the world. In fact, more than 75% of tenants want smart homes –and they are willing to pay higher rent to get it.
The big question – are smart features a worthwhile investment for the landlord? Will they get their money back? It is hard to pin down a direct ROI, but yes, it pays off. For example, let’s say a property owner installs a smart thermostat, but the tenant pays utilities. Of course, the direct monthly savings on energy slides into the tenants’ pocket, but if your smart technology draws quality tenants faster, collects higher rent, and enjoys higher retention, then you have a solid ROI too.
Stessa, a Roofstock company, shares the six smart home devices most popular with landlords.
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- Smart door locks and keyless entry systems operated by smartphones or the IoRE.
- Smart thermostats that learn frequent settings and adapt and adjust temperatures when no one is home.
- Smart security systems with motion detectors, night vision, and 2-way audio connected to Google or Alexa.
- Smart smoke and carbon monoxide (CO) detectors can send alarm notices to your smartphone anywhere in the world.
- Smart electric plugs and light switches –sold by the 4-pack.
- Smart garage door openers with a smartphone app control that is compatible with Alexa and Google.
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Before you jump into the smart device pool, pay attention to the potential negatives. For example, take the time to research before you buy. Some smart home devices collect data on users to sell to advertisers. You can be sure that this would be a deal-breaker with your tenants. Invest in smart home products that protect your tenants’ privacy. Ensure you how to manage the system and how the data is stored.
It is also wise to check out other rental properties in the same area as yours. Are they smart homes? Which devices have they installed? What is the typical rent increase? What are they seeking, and how much are they willing to pay for it? It’s also vital to know the demographic of your tenants. On the one hand, more than 65% of today’s tenants are singles starting-out, young adult roommates, and perma-renters who grew up with the internet, and they expect smart homes to be the standard. On the other hand, if your tenants are typically retired baby boomers who sold their homes to downsize, they will be looking for different amenities than Millennials or under 30 Gen Z’s.
Bottom line: Tech-savvy tenants want smart homes, and most are willing to pay for them. If you are looking for ways to increase your rental property’s potential to attract quality, stay-awhile tenants, exploring this avenue is a great idea. Many smart technologies are inexpensive and will reap a fair ROI.
About Rentals America
Rentals America provides full-service property management for residential rental properties. Our team is completely dedicated to property management and we’re here to help landlords navigate the rental market.
