Smart home technology is no longer a novelty. It’s now become more common than ever with programmable thermostats, smart locks, and video-doorbell security systems. For landlords, adding smart home tech to rentals can be a great way to attract more renters. But it also comes with costs, responsibilities, and potential breakdowns.
Three pros of smart home rentals
Before you wire up your units with the latest smart gadgets, it’s worth weighing the pros and cons.
1. You’ll attract higher-quality tenants
Smart tech can make a property stand out to Millennials and Gen Z. These groups prioritize convenience and connectivity. According to a Rent.com survey, 82% of renters want at least one smart device in their home.
Smart locks, smart thermostats, and smart lighting systems appeal to tenants who value efficiency and security, and many are willing to pay a premium for these features.
2. Enhanced safety and peace of mind
Smart locks eliminate the ability for people to copy keys, and they make tenant transitions smoother. For example, many Los Angeles property landlords find that properties are easier to manage with smart locks installed. Access can be granted or revoked remotely, maintenance is easier, and no physical key is needed for showings. And smart security cameras and video doorbells deter theft and vandalism.
In addition to gadgets that make life easier for tenants, some smart tech is built for landlords. For example, water leak sensors can detect leaks in places you can’t see, which can save thousands in water damage repairs and mold remediation.
3. Lower utility bills
Smart devices can reduce energy bills, which is great for landlords footing the bill. For example, smart thermostats can manage energy use more efficiently, and automated lighting systems can cut down on wasted electricity. The best part is that energy-efficient homes often qualify for local and federal rebates.
Smart lighting systems can be programmed to turn lights off at the same time every night so rooms aren’t forgotten. And if a tenant leaves the house and realizes they forgot to turn off the thermostat or lights, they can do so right from their smartphone.
3 cons of smart tech in rental units
1. Higher upfront and ongoing costs
Smart tech costs money up front, and even though landlords can recoup the cost through higher rent, they’re also responsible for ensuring the tech remains functional throughout a tenancy. If something stops working, a landlord is required to fix or replace it at no charge to the tenant (unless the breakdown is the tenant’s fault). If any of these features disappear mid-lease, the landlord is most likely required to reduce the rent accordingly.
2. Tenant privacy concerns
Some tenants don’t like the idea of their landlord having remote access to their homes via smart locks and smart thermostats. They value privacy and don’t know if their landlord will start controlling the amount of heat or A/C they can use.
In the past, tenant lawsuits against landlords for forcing them to use smart tech have been successful. Unfortunately, some landlords use smart lock systems that are connected to companies that sell tenant data for marketing purposes. They don’t just track comings and goings – they also track the location of the tenant via GPS to find out where they shop. Landlords who use electronic smart locks need to be careful about protecting tenant data.
3. Maintenance and tech hassles
Smart tech isn’t immune to breakdowns or failures. Apps can glitch and Wi-Fi can drop without warning, causing tenants frustration and headaches. When that happens, the landlord becomes IT support. On top of that, smart devices require staying on top of software updates and patches to maintain security and functionality. If tenants try to mess with the devices and do something wrong, there’s a good chance it will be a headache to restore.
Smart tech is only helpful when it’s strategic
There are plenty of stories floating around about tenants who signed leases before knowing they’d be forced to use smart locks and wouldn’t be given a physical key as an alternative. While tenants generally like simple smart technology – like lights, thermostats, coffee makers, and washing machines – they don’t particularly like smart video security systems controlled by their landlord.
Smart home tech can make a rental stand out, attract good tenants, and even reduce utility costs. But it also brings more expenses, more maintenance, and potential legal problems. For landlords, the decision to deck out a property in smart tech should be based on whether the benefits outweigh the costs and risks. It’s best to start small, test adoption, and then expand to keep properties manageable and rented.
