Does Smart Home Tech Improve Your Texas Rental Property Profitability?
Increasingly, homeowners and property managers are turning to smart home technology to make home living easier, more efficient, and in some ways, more entertaining. Many of us now have access to at least a handful of smart home devices, such as smart thermostats that allow us to program our home temperature remotely, or smart garage door openers that can be used in conjunction with a smartphone.
But how important are these smart home devices to prospective tenants? And if you outfit your managed properties with more smart home technology, will you be able to better appeal to tenants? Or earn a higher profit?
The Value of Smart Home Tech
Let’s start by discussing the true value of smart home technology.
There’s no question that adding smart home tech to your Texas rental property can, in some ways, boost its value and its appeal to tenants. Given two otherwise identical options, Texas tenants would likely prefer an apartment or home with smart home features. The dilemma is whether the benefits outweigh the costs.
These are the most important advantages to consider:
- Security. Certain smart home devices can increase the security of the property, adding value for both you and your tenants. For example, let’s say you have a smart lock system in place and a security camera at the exterior of the property. Your tenant will feel like they have more control over who can enter the building – and they’ll have a way to protect themselves and gather evidence if they’re ever the target of criminal activity. This can grant your tenants much greater peace of mind, especially if they’re living in an area with a high crime rate. You can also use this technology to keep your property more secure, keeping it in better condition.
- Convenience. Sometimes, smart home tech can improve convenience. Simple tasks, like changing the temperature of the thermostat, become much easier when they can be completed with the help of a smartphone – or when they can be totally automated. Depending on which devices you choose to have installed, the new functionalities could save your tenants hours of time.
- Aesthetics. Some people love the aesthetic appeal of smart home technology. A sleek smart appliance, or an embedded smart device in the wall, could make the property seem more modern and more polished.
- Image and prestige. We all know at least one person who views technology as a kind of status symbol. Having access to higher-tech home features gives people a more grandiose sense of personal status – and pride in their home. For some tenants, this makes smart home technology a high priority.
- Energy savings. Smart home devices are also known for their energy efficiency. With smart thermostats, you can better control the temperature of the living space and keep a closer eye on energy-related habits. With smart appliances like refrigerators and stoves, you can use less energy as well. Your tenants may be interested in living a more sustainable lifestyle and saving money on utilities in the process; if so, this could be seen as a massive benefit.
- Transitions. Smart home tech can also make transitions from one tenant to another much easier. With a smart lock system in place, you can increase security and grant access to a new resident in a matter of minutes.
Costs and Detriments
Smart home technology isn’t free, however. There are several costs and detriments to consider.
- Appliances vs. devices. Certain smart home upgrades are completely reasonable in terms of price and the hassle of installation. For around $100, you could easily purchase a smart thermostat, and use a DIY installation to get it running. But if you want a more robust smart home network, with major kitchen appliances that connect to Wi-Fi, you’ll need to make a much bigger investment – and most of the time, the extra thousands of dollars simply aren’t worth it.
- Privacy concerns. Security systems may make your tenants feel safer, but there’s no getting around the fact that many people have privacy concerns related to smart home technology. Certain appliances and devices may have an oppressive presence to some, making them feel like they’re being spied on – and driving some people away from the property entirely.
- Damage potential. Every investment you make in the property, and every upgrade you purchase, is going to potentially suffer damage from your tenant if misused or abused. If your tenant is careless or negligent, they could completely destroy your investment.
- Wi-Fi dependency. Don’t forget that most smart home tech relies on Wi-Fi internet access to function properly. If the internet goes out, the device may no longer work, or may lose certain features, resulting in headaches for both you and your tenants.
How Much Do Tenants Care?
One of the biggest variables in the smart home equation is determining how much your tenants actually care. Is the addition of smart home tech going to increase the rent you can charge and shorten your vacancies? Or is it going to have almost negligible impact?
This is a hard question to answer because every demographic is different. If you’re renting a luxury apartment in a highly competitive area, smart home tech will be more important. If you’re renting a single-family home in an inexpensive neighborhood to a family whose biggest priority is choosing the right school district, tech won’t matter as much.
Working With a Property Management Company
Choosing whether to outfit your home with smart home technology is just one of many touch decisions you’ll face as a Texas landlord. Managing a rental property is one of the best ways to make passive income, especially if you have a property in an in-demand neighborhood, but this income isn’t truly “passive” if you’re working constantly to make decisions and keep the property in good shape.
That’s where a property management company can help. With the right property manager, you can make your rental property truly hands-free – or as close to hands-free as property management can get. For more information on how property management works, or for a free consultation, contact Green Residential today!