Smart Additions for Smart Leases: The Way IoT Alters Property Value

The market of rental properties is switching up faster than ever before, and technology is doing most of the work. According to a 2023 report by Mordor Intelligence, the US smart homes market size is estimated to reach USD 62.5 billion by 2029.

Integrated smart home technologies are no longer seen as extra futuristic features but have become essential in raising the desirability and therefore value of rental properties. Renters now demand homes that make life easier and more efficient through various smart home devices and add-ons. This section will go over just how these add-ons affect property value across America.

Smart Upgrades for Owners and Tenants

Smart home technology refers to systems where devices, systems, and appliances throughout a house are connected with one another creating an ecosystem within the home itself. These devices can be controlled using a central hub, computer or smartphone app either automatically or remotely.

These devices also connect to the homeowner so they can control them all in one place if needed, which leads to convenience like never seen before, added security, while still lowering even further energy emissions.

Examples of smart home solutions include voice-activated assistants (Siri), door locks you can open from your phone (if you forget your keys), security cameras with Wi-Fi capability (to check on your house while away), smart thermostats (thermostat automatically adjusts itself depending on the temperature outside) — just to name a few.

There are two ways in which property owners can use these upgrades: increasing property value by attracting tenants willing to pay extra for modern conveniences, and lowering overall costs on their living space by managing everything much more efficiently.

For renters, what draws them to smart home apartments is the seamless integration of technology into their lives and therefore daily routine. They get better overall control over their living environment which makes life easier — we’ll dive deeper into why both parties benefit off of smart homes next.

IoT systems

IoT, or internet of things, is basically an an arrangement where internet-based systems are used for the day-to-day working of various appliances in homes and offices, like printers, copiers, microwaves, refrigerators, etc.

Automated Thermostats

Apart from the convenience it offers to residents, this feature can help you save up on bills quite a lot! More often than not people constantly forget to turn off their heater or keep it on accidentally while they’re outside for hours. Even with all of that being said, this addition to a space really gives renters the option to cut down on their power usage — which in turn helps the environment.

Smart Locks

We’ve seen them in movies and have been waiting for technology to catch up ever since. With smart locks you get remote access, personalized entry codes, and usage tracking. Whether you’re a landlord or tenant this feature is hard to pass up in terms of security alone.

Smart locks replace traditional key-operated locks, but work with them attached. They’re perfect for apartment complexes or hotels where owners don’t want to pay for hundreds of installations.

Users can control smart locks remotely via a smartphone app, granting/revoking access whenever they see fit. Some smart locks even come with extra authentication methods such as keypad entry, fingerprint recognition or facial recognition for added security.

Moreover, integration with smart home systems allows automation: the locks can automatically unlock when a recognized mobile device is in close proximity or lock at scheduled times. Smart locks provide homeowners convenience, enhanced security and the ability to monitor and control access to their property from anywhere.

Energy-Efficient Lighting

Energy-efficient lighting systems not only reduce environmental impact but also lower operational costs for property owners. Smart lighting solutions that adapt to natural light levels and occupancy can significantly decrease energy consumption.

Energy-efficient lighting in a smart home refers to the use of advanced lighting technologies and control systems to minimize energy consumption while providing optimal illumination.

This typically involves the use of LED (Light Emitting Diode) bulbs, which consume significantly less energy than traditional incandescent or fluorescent bulbs while offering longer lifespans and greater durability.

In a smart home setup, these LED bulbs are often integrated with smart lighting systems that allow users to remotely control and automate their lighting, adjusting brightness levels, scheduling on/off times, and even changing colors as desired.

Additionally, smart lighting systems can incorporate sensors to detect occupancy or natural light levels, automatically adjusting lighting settings to further optimize energy usage. By combining energy-efficient LED bulbs with intelligent control systems, smart homes can achieve significant reductions in energy consumption while maintaining comfortable and well-lit living spaces.

Rental Rates and Property Valuations

Trends and Statistical Data

 A 2021 study by Parks Associates found that smart home devices can increase rental fees by 5% to 30% for multifamily housing units. In this study, property owners reported that they were especially pleased by the ability of smart home devices to provide robust security, help respond during emergencies and switch off lights in rooms that are not being used.

 According to a 2024 report by Statista, the revenue of smart home technology devices has steadily increased between 2019 and 2024, and is projected to reach to USD 231.6 by 2028. Many such studies paint an optimistic future for smart home rentals. Although IoT devices are still a new thing, and not many people are used to them, they might just get immensely popular in the future.

Benefits of smart homes

Convenience and remote access

Smart homes offer unparalleled convenience by allowing homeowners to remotely control various devices and systems through smartphone apps or voice commands. This means you can adjust thermostat settings, turn on/off lights, lock/unlock doors, and even monitor security cameras from anywhere with an internet connection, providing peace of mind and flexibility.

Saves cost and energy

Through the integration of energy-efficient appliances, automated lighting, and smart thermostats, smart homes can significantly reduce energy consumption and utility bills. By optimizing heating, cooling, and lighting based on occupancy and preferences, homeowners can achieve substantial cost savings over time while minimizing their environmental footprint

Security and safety

Smart home security systems offer advanced features such as motion detection, video doorbell, door/window sensors, and surveillance cameras that provide real-time alerts and monitoring capabilities. Additionally, smart locks and video doorbells allow for remote access control and monitoring of entry points, deterring potential intruders and enhancing overall home security

Customized services

Whether it’s a simple voice-activated assistant or an intricate multifunctional system, smart home devices are designed to make things easier and more convenient. Smart technology is no longer confined to phones and cars, but homes too.

These features can be tailored to meet the specific needs of homeowners by giving them the ability to monitor and maintain various aspects of their household systems including HVACs, water heaters, and electrical appliances. This can save people a lot of time and money in the long run.

Inclusivity and accessibility

This all might sound great for tech-savvy individuals, but what about those not as comfortable with emerging tech? Does this level of customization make life harder for them? Well yes and no. While new gadgets may be confusing at first they help facilitate independence for seniors and individuals with disabilities allowing them to live comfortably in their own homes more easily than ever before.

Challenges in using IoT devices

Privacy concerns

Despite there being countless pros to adding smart features into your home, people naturally have concerns when it comes to privacy. This is understandable as everything connected to the internet has at least some bit of risk when it comes down to protecting personal information from hackers. Devices that fall under this category include security cameras or smart locks which could lead to major issues if left unprotected.

Issue of compatibility and overreliance

In terms of compatibility, not everything will always work together smoothly. Some products may be made by different manufacturers which can create interoperability issues between them and existing smart home automation systems — even on different software updates things still may just not work right.

As much as we want everything in our lives working autonomously sometimes things don’t go as planned. When these malfunctions occur property managers and owners will have a heavy reliance on IoT devices making everyday tasks more difficult than they’d like — especially if critical devices malfunction because then essential house functions will cease until they’re fixed.

Managing a network of IoT devices can also get complicated between setting up each device correctly with one another then even when that step is completed further issues such as software updates and compatibility issues with hardware can occur. Additionally, tech assistance will only go so far as many complex problems still require physical intervention to be fixed which would bring property owners back to square one.

 Cost considerations

Lastly, price can often make or break a product’s popularity. IoT devices aren’t cheap, especially for high-quality ones with advanced features that properties will need multiples of. On top of the initial cost of buying these devices there are ongoing costs such as subscription fees for cloud services or regular software updates that people tend to forget about too.

If you are a property owner or manager who wants to install smart devices in a rental unit, this is understandably an important decision. If you decide to install smart devices, the value of your property will definitely appreciate.

But the catch is, will you get significant returns on this investment, compared to how much you are paying for these upgrades? Moreover, are there any hidden costs that you might have to incur if you go ahead with the installation? So, make sure you have a clear idea of all the costs involved for maintenance, recharging, power backups, etc.

Lastly, make sure that your renters are ready and willing to implement these changes. The financial situation and priorities of the renters will ultimately determine whether IoT devices are the right choice for your property.