Where Real Estate Investors & Landlords Go for Success

Smart Home Technology and Security System Pros and Cons

in Property Management

Smart home technology has finally entered the mainstream thanks to a combination of lower prices, ease of use, and broad connectivity. These devices, including home security cameras, light bulbs, thermostats, and even some major appliances, are becoming more secure and convenient all the time. With just your smartphone, you can control many aspects of your home – even while away from home. Add in automatic programming and self-learning algorithms, and homes can be safer and more energy efficient than ever before.

All of these positives make smart home tech a very attractive proposition to property managers and landlords, giving them unprecedented ability to improve security and attract potential new tenants. But what are the true costs and benefits, and how do you weigh them? Let’s explore the ways smart home technology can improve the value of your rental properties without making you broke in the process.

The Biggest Benefits

 
First, we will explore the reasons you may want to install smart home devices into a rental property, beyond the obvious improvement to overall value and attractiveness to potential tenants.

Security

 
One of the most popular components of a smart home ecosystem is the security element. From cameras to window and door sensors to motion detectors, it’s easy to add security devices and work them into a centralized smart home system. Great peace of mind can come with the ability to monitor the home, inside and out, whether you’re home or not. The best aspect of modern smart home security over the older, more traditional types is that you can have exactly the amount of security measures you need and nothing more. So a small apartment may require only a door sensor and perhaps a single camera, while a larger home could use a number of window and door sensors and cameras covering the exterior.

Prices generally scale with the number of components, so a smart home security system can range anywhere from $100 to $500 or even more, depending on how elaborate the setup becomes.

There is an important point to note here that does not apply when you are installing security devices in your own home: you must consider your tenants’ privacy and be aware of any local laws pertaining to it. The tenant needs to trust that their landlord will not abuse the cameras to observe their private life; they need to know that the security system will be used only for its intended purpose. Sharing the technology will go along way here – if the tenant has access to their smart home security, they will feel more secure knowing that their home is both safe and private

Smart Locks

 
Adding to the security and safety of a home, but considered separate from the cameras-and-sensors apparatus, is the wide range of smart locks available. These devices are especially useful for landlords, as they allow for an extremely convenient way to “change the locks” between tenants – simply change the access code and you’re good to go, no locksmith or key-maker required. Additionally, they can provide temporary access to contractors or anyone else working on the property. Finally, with connected smart home technology, you can remotely unlock the doors for real estate agents, prospective tenants, and anyone else necessary from virtually anywhere in the world, using your smartphone. That’s something that simply wasn’t available only a few years ago.

Depending on the level of functionality, a good smart home lock will run from $100-$300.

Light Bulbs

 
One of the most important benefits touted by the makers of smart home technology is energy efficiency. For landlords, this means a great way to improve profitability. The most popular entry in this category would be smart LED light bulbs. These not only use far less energy than their fluorescent or incandescent forebears, but with programmability and remote control, they can be used only and exactly when needed, expanding their lifespan beyond even the estimate on the box. Although their initial price is much higher than a standard “dumb” bulb, the extra functionality and lifespan will help offset the cost over time.

Additionally, you can purchase smart outlets that will allow you to control any lamps and any other “dumb” devices plugged into them. It’s a relatively cheap way to add smart functionality to things you or your tenants already own.

Smart Devices

 
Smart devices can also help control and maximize the heat and air conditioning in your rental properties. Thermostats like the Nest, from Google, help reduce energy usage by precisely controlling the temperature based on weather patterns, time of day, and the occupants’ schedule. The better models even learn and adapt over time to wring the last bit of efficiency out of the furnace and air conditioner. If you control the utilities on your property and include their cost in the rent, this can be a great way to increase profit while keeping rental costs down for your tenants. If the renter controls the utilities, this will still be a great selling point for the property – everyone likes saving money, and many prospective tenants will be excited about energy conservation.

Another great efficiency addition to a smart home ecosystem is an energy monitor. This device attaches to the circuit breaker inside the home or unit and monitors energy use on a room-by-room basis. This allows you or the tenant to troubleshoot exactly which rooms are using the most energy and to figure out ways to increase efficiency. It can even tip you off to faulty wires or any other problems before they become readily apparent, preventing a lot of work and even accidents down the road. These devices are typically well under $100 but can increase in price depending on the functionality required.

Some Potential Downsides

 
While the benefits of smart home technology can seem readily apparent, there are some challenges and costs to consider before installing it in any or all of your rental properties.

Upfront Cost

 
When you buy in to any new technology, there’s going to be an upfront cost. Even when the technology has a broad range of prices and you can choose the number of devices, it’s going to require some money that you won’t immediately see returns on. However, as we noted above, the potential energy savings can diffuse this cost over time. Whether that comes because your energy bills are lower or, in the case your tenants pay for their energy bills, you’re attracting better quality renters, it will take some time to see a return on the investment.

It’s also important to note that you can see insurance savings, depending on which smart home technologies you install. Security can go a long way toward lowering those bills. Finally, it cannot be stressed enough: with more appealing, up-to-date, and energy efficient rental properties, you’ll have a more enticing offer for prospective tenants, and can likely command a higher rent.

It All Relies on Wi-Fi

 
While smart home devices have become more streamlined, functional, and reliable over the years, they all still depend 100% on good Wi-Fi reception – and in many cases, a continuous internet connection as well. If the Wi-Fi drops out, or has dead spots in the home, smart devices can have issues with functionality.

This is more a cautionary note than a true downside, because barring weather problems that can take out internet service for anyone, Wi-Fi issues can be prevented with some due diligence and a bit of work. Overloading the router (the center of the Wi-Fi network) will not be an issue if the smart home devices are all put on a different frequency than the active devices occupants use – in other words, separate the phones and computers from the smart bulbs and cameras via the 2.4ghz and 5ghz bands. If this sounds too technical, there are an abundance of guides on YouTube and elsewhere online, and any local tech company or even Best Buy can send a knowledgeable technician to do the setup for you.

Similarly, you can check for dead spots in the Wi-Fi coverage using your smartphone or ask a hired technician to do so. There’s an added cost for having someone install everything, but it’s important to remember the value of your time as well. If you don’t feel confident in your technology skills, it’s an easy decision to hire out and feel secure knowing your tenants will have an impeccable smart home ecosystem.

Privacy Concerns

 
As mentioned previously, smart home technology brings privacy concerns. Some of this is due to misunderstanding, and some is legitimate. Your tenants may worry that their landlord can spy on them via their automated and smartphone-controlled devices. They may have concerns about control of these devices being in someone else’s hands. No one wants to think they’re being watched, or that they do not have ultimate control over the lights, heating, and other aspects of their home. Thus it is of paramount importance that you clearly communicate how all smart home devices in your property work, and how boundaries will work when it comes to control and access.

It’s a good idea to help any new tenants set up access to the smart home ecosystem, installing the proper apps on their phones and tablets for control. If you want to maintain access to certain devices, such as the aforementioned energy monitor, you should make it abundantly clear.

A Smart Investment When Done Right

 
With some savvy shopping and a practical plan, outfitting your rental property with smart home technology can be a great investment in addition to being a huge enticement for new and existing tenants alike. Making sure you install only useful and necessary devices, and that they work perfectly in concert as intended, is a great way to ensure that you don’t waste the smart home budget. You may not see a direct return on investment, especially not right away. But with efficiency and functionality improvements, your rental property will use less energy and attract more great tenants – and retain those great tenants you already have. Of all the major home updates available today, smart tech can make one of the biggest impacts.

 

Disclosure: This Knowledge Base article is accurate as of the last update. Laws and policies are subject to change. If you have any questions, please call the office. Click here for contact information.