There are many ways to quickly and inexpensively boost your home value in preparation for rent or sale. If you’re a large-scale rental property investor, applying these upgrades across your entire portfolio could dramatically increase the income potential of your properties.
The most common ways to upgrade your properties like this include:
- A fresh coat of paint inside and outside the property
- Improvements to your landscaping
- New faucets and fixtures
- A restaging of furniture and décor
While these are the most frequently-used “tricks of the real estate trade,” there’s another upgrade that property owners usually overlook: Converting a residence into a smart home with integrated home automation technology. Upgrading the smart tech in a property benefits both renters and owners alike.
How Renters Benefit From Smart Home Technology
Renters loves the way smart home gadgets bring cutting-edge conveniences into the home. Here are a few examples:
- Control entertainment by voice: Want to listen to a song? Call out a command to the computer.
- Control access remotely: Want to let a friend into your apartment while you’re in another country? Click a button on your mobile phone to grant someone access.
- Automated lighting: Automate when your lights will turn on and off while traveling. Program your lights to automatically start dimming as it gets closer to bedtime. Or, turn your lights on and off with verbal commands.
- Receive smartphone alerts when you leave a door open: Program your smart home to send you alerts when you leave a door or window open, or if you leave the refrigerator door ajar.
- Save money with smart thermostats and smart HVAC systems: As we’ll discuss in more detail below, a smart thermostat can save you a tremendous amount of money by more efficient heating and cooling your home. A smart HVAC system can provide more energy-efficient heating and cooling.
Of the benefits outlined above, smart thermostats and smart HVAC systems are the most helpful in terms of cost-savings. For example, at PointCentral, we use Alarm.com Smart Thermostats in the systems we design. According to Alarm.com, EPA-required testing has shown that these smart thermostats determine the most energy-efficient settings to save between 9 and 16 percent of energy while heating, and between 15 and 23 percent while cooling. With most U.S. homes costing about $900 to heat and cool annually, this is a substantial saving.
Smart thermostats create these savings by tracking when residents are inside or outside the home, and by adjusting the thermostat to achieve more efficient energy use throughout the day.
A smart HVAC system adds more savings by allowing renters to identify rooms to shut down from temperature control. Smart shades – that control the way the sun enters your home at times throughout the day – can cut energy costs even more.
For these conveniences and cost savings, renters will happily pay more in monthly rent. According to marketing gurus MediaPost:
“It turns out that the majority (57%) of apartment renters are willing to pay at least $20 a month more if smart home technology is included, according to a survey of 1,000 U.S. adult apartment renters conducted by Entrata. Renters would rather pay a premium for smart home features than they would for a pool.”
How Real Estate Sellers and Landlords Benefit Smart Home Automation Technology
If you’re in the process of selling a property, saving $1,000 a year on electricity isn’t the half of it. According to Consumer Reports, your home value will increase by 5% after upgrading it with a complete smart home system. If your home sells for $300,000, that would be a $15,000 rise in value.
However, the biggest financial benefit from investing in smart home automation probably comes to rental property investors. This is because smart home automation brings the rental property owner income or savings on three separate fronts:
- Time saving: When you can adjust the thermostats on 10,000 properties at once with a touch of a button, or when you can lock and unlock doors remotely on properties throughout the world without leaving your couch, it’s easy to see how much time you can save in terms of you and your employees’ labor. This savings on labor gives you and your employees time to devote to other income-producing tasks.
- Cost-saving: Tenants are the ones who benefit the most from savings on utilities relating to more efficient smart Thermostats and smart HVAC systems, but property owners will benefit too. For example, smart HVAC systems notify landlords as soon as something happens to their HVAC equipment, so a simple problem doesn’t turn into one that requires a complete replacement of expensive equipment.
- Rental income increases: We discussed this third area of improvement for rental property owners above. Not only can you charge more in rent for a smart property compared to a normal property, but a smart tech upgrade will also make your property more attractive to prospective tenants.
By our calculations, the potential return on investment for a smart property upgrade is $6,105 to $9,702 per property.
PointCentral: Smart Home Automation Made for Property Managers
There are many smart home technology providers, but we designed PointCentral specifically to serve as an enterprise-scale tool for property managers, allowing one person to manage thousands of homes. Our systems make your job as a property manager more efficient from a time-saving, money-saving, and income-earning perspective. If you can see the benefit of upgrading properties in a way that pays immediate dividends, contact our team to learn how we can help.