Article source: Bay Property Management Group
Finding tenants who will want to stay in the same place for a long period is important for a property owner. Having this helps reduce costs associated with total unit turnover, vacancy periods, and relisting. However, in today’s competitive rental market, simply painting the walls and having an operational heating and cooling system will not suffice to attract tenants.
By providing tenants with convenience, control, and security through smart home technology, tenants will appreciate the added value, increasing the likelihood they will choose to renew their lease. Keep this in mind as you read this article on the types of smart upgrades that will positively impact tenant renewal decisions and how to make them without exceeding your budget.
How does Smart Home Technology Influence Leasing Decisions and Renewals?
Today, many tenants are no longer searching for “four walls and a roof.” Everyone wants a home that works with them. The ability to use a smartphone to unlock the front door, adjust their thermostat from the couch, or receive phone alerts about package deliveries is no longer considered a “nice-to-have” extra.
If your unit includes smart home technologies, you’re removing a significant reason for tenants to leave it behind. The stress and expense associated with moving make it unlikely for tenants to initiate a move if their property delivers the same comfort and convenience they would be looking for in a different property. A rental property manager in Chester County can help landlords choose which smart amenities can provide a good return.
Smart home upgrades in Philadelphia have effectively raised your tenants’ switching costs not through lock-ins or contracts but through providing them with an experience that will be very difficult for them to give up.
High-Impact Smart Home Amenities
- Smart Security Systems
When it comes to rentals, security is something most tenants do not talk about until they feel unsafe in that particular unit. It can be very hard to convince a tenant with this feeling to renew their lease once it has been established. Newer finishes and appliances will not restore a sense of security if there has been a loss of it.
A smart security system provides a different aspect of security for tenants. Video doorbells allow tenants to see and speak to whoever is at the door without opening the door. Smart locks eliminate the need for tenants to be concerned about losing their keys while also providing easier access for guests. The ability to remotely change access codes via a smartphone app is also available with smart locks, eliminating the need to call a locksmith. In addition to these features, motion-activated lights provide tenants with further comfort when entering their building at night.
- Smart Thermostats
A smart thermostat is the top choice for a single smart-device installation across all properties because it offers one of the lowest-priced upgrades available for residential properties. There will be an immediate impact from tenants as well.
There are devices that can learn to adjust to a tenant’s preferred temperatures by learning the pattern of their schedule. Therefore, there will be energy savings without having to actively track how or when to use them. For renters who are conservative with their budgets, this feature would be exceedingly enticing.
- Smart Appliances
One of the best ways to create an upgraded feel in a rental property without renovating from the ground up is to add smart appliances. If a tenant walks into a unit and sees a smart fridge with grocery-tracking capabilities or a washing machine that the tenant can turn on from their phone, odds are the tenant will remember this unit when making comparisons among several units.
Besides the WOW factor these smart appliances give tenants, they also reduce the time tenants need to do chores, so they spend less time on chores and more time just living in the unit. This positive association with your property is a bigger deal than you think.
Cost vs ROI for Property Owners
- Upfront Costs
Smart home upgrades come with upfront costs. The cost to install a smart thermostat, smart security, smart appliances, and smart locks ranges from $1,500 to $5,000, depending on the unit size and brand selection. Rent lost during that month, maintenance, and fees associated with re-strategizing and listing the apartment can quickly exceed the cost of installing additional smart features.
You can expect properties that have smart home enhancements to have higher average rents than comparable non-smart homes. When the first tenant who renews a lease decides to stay on that property, he or she has effectively returned to you all the money you paid to install the smart features.
- Potential for Higher Rental Rates
Adding smart technology to your properties gives you an opportunity to charge higher rents. Renters remain willing to pay more for apartments with technology that makes their lives easier.
For example, if you rented an apartment for $1,500 per month, your tenants could pay an additional $45-$120 per month in rent, and this adds up quickly. The smart home upgrade generally will have paid for itself within the first year of leasing the apartment.
- Lower Maintenance Expenses
Tenants love smart home technology, but it also saves you money on the backend without your knowledge. For example, smart leak detectors identify water damage before it becomes a major expense. Even smart smoke detectors can help prevent the financial fallout from damage that could cost you thousands of dollars.
As a property owner, you can circumvent the problems of either waiting for tenants to report them or finding them after they’ve left by proactively dealing with issues in real time. Your proactivity will translate into lower maintenance costs and fewer emergency callouts over time.
Conclusion
Retaining tenants requires intentional action, and one of the best ways to achieve this goal is by installing smart home technology. The use of smart home technology should not feel like merely adding another gadget, but rather providing tenants with an experience that they want to stay in for as long as possible.
The upfront investment is affordable with a measurable return on investment (ROI), and the results of your vacant unit will speak to your success. Start with one improvement; wait for tenant input before making any more. Small changes to your units can lead to consistent increases in the overall performance of your rental property.
