Brenton Hayden is the founder and chairman of the board of Renters Warehouse. A Harvard Business School and MIT Sloan School of Business graduate, Brenton leads a team of over 140 employees and franchises in 21 states with a portfolio of managed properties valued at just under $1 billion.
Pros and Cons of Smart Rental Homes
Home owners are flocking to connected devices to manage everything from energy use to home security with their smartphones. But does this technology make sense for property managers and others in the commercial real estate realm?
January 15, 2015
The consumer market has recently been flooded with so-called “smart” appliances (such as refrigerators that create grocery lists and thermostats that manage energy use) as well as complete home automation systems that allow for interconnected customization of lighting, entertainment, irrigation and security monitoring. And all of it can now be managed from your smartphone.
But for landlords, home automation is a tricky business. On one hand, there are significant benefits to installing certain connected devices in a rental unit, but there’s also the potential risk of security breaches and other complications. And of course there’s the all-important question of whether such upgrades are financially viable investments. Does home automation make sense for rental units?
If you’re tempted to jump on board this trend, there are a few things that you should know. So let’s dig into the pros and cons of smart home technologies to figure out what’s right for your business.
These systems make it easy for tenants to set their lighting exactly how they want it, with minimal hassle. Once the automation network is set up, tenants will be able to control their lights with a swipe of their iPhones or any control point interface that’s synched up with the network. Tenants may even find it fun setting up preprogrammed “scenes” that allow for any number of preset lights to turn on or off with one touch of a button. Smart lighting solutions can also save energy, since the system can be programmed to automatically turn off lights in empty rooms.
Cons: Older rentals may require updates to get the electrical system up to code before installing smart lighting. Depending on the system, automated lighting can also be costly to install.
Programmable thermostats present an attractive alternative to traditional thermostats, offering a significant number of advantages for rental properties. The main benefit is reduced energy costs. The Nest Programmable Thermostat is a popular smart thermostat option. They’re easy to program, allowing landlords to ensure that the rental home remains at an optimal, reasonable temperature at all times. Nest is also easily accessible via smartphone or tablet, which means it’s simple to adjust one’s preferences at any time, even remotely.
Cons: According to some reports, Nest units can be unreliable. Some people have reported issues with recharging, as well as trouble with the device disconnecting from the network. Then there’s the initial expense of $250. Nest’s big selling point is its sleek design, but for landlords on a budget, there are other, more basic options available. The Honeywell Programmable Thermostat is one such alternative, available for roughly half the price of Nest and offering a number of similar convenient, energy-saving features.
Automated Security Systems
Automated security systems can be a great investment for rental properties. These systems include everything from security cameras that can be viewed remotely to automated lighting and alarms. Such systems are an especially good option for multiunit rentals with common areas and multiple entries and exits. Security systems have been shown to reduce the chance of break-ins, and an automated system allows landlords to virtually tune into their rental properties at any time, from anywhere.
Cons: Again, security cameras are a great investment, but you should be careful when deciding on a system. Wireless security systems can sometimes pick up interference from other wireless devices nearby, triggering false alarms. Also, wireless systems are vulnerable to security breaches and hacks. Before installing an automated security system, it’s important to take every precaution to ensure that the system is safe, taking care to choose a strong password and user name, as well as to operate on a secure network.
Smart Irrigation Systems
Smart irrigation systems can be a great way for landlords to ensure that the landscape receives the water it needs, without having to depend on maintenance crews or tenants to water it on a regular basis. Smart irrigation systems today extend far beyond the simple sprinkler on a timer. They can be set to sync up with the weather forecast, and can take into account temperature and precipitation factors and adjust water levels accordingly. Some have on-location sensors that measure moisture in the soil to determine water usage. Other systems can be set up with a number of different “hydrozones,” ensuring that flowers get more water, and desert plants get less.
Cons:Installation of automated irrigation systems requires a significant initial investment. With automated irrigation systems, there’s more that can go wrong, and they are more costly to maintain and repair or replace should something happen. Also, it’s important to understand the needs of the property; many rentals have relatively simple landscaping that may not benefit significantly from a high-tech system.
Smart appliances offer a number of great benefits — especially for landlords who pay the utility bills. Smart laundry machines and dishwashers are designed to ensure optimal cleaning with the smallest amount of energy and water required. Smart refrigerators can notify the occupants if the door has been left open and can also maximize energy efficiency by lowering power consumption during specific times of the day.
Cons: Smart appliances often cost significantly more than standard ones, and they aren’t yet on most renters’ must-have lists. While these are great luxury items, they may not significantly boost the appeal of a rental enough to offer the landlord a significant return on investment. An Energy Star-approved appliance might be a better option for now.
Landlords often struggle with securely providing unit access to contractors, especially with occupied apartments, which could be why remote access software is starting to become such a popular option for rentals. Remotely is one example of a remote entry software provider that claims to make life easier for landlords. The app allows a landlord to adjust security systems remotely in order to allow temporary access for maintenance workers or repair technicians.
Cons: While remote access capabilities assert that they save time and effort, this technology isn’t without its share of issues and risks. Remote access systems are configured via the Internet, and as such they are vulnerable to being exploited or hacked. While some landlords assume that remote access will allow them to manage their rentals while they are away, this presents its own set of problems. As with most technology, these systems are not infallible and will sometimes require rebooting or resetting the router in order to work. For landlords, a viable alternative to remote access is to choose a reputable company that offers property management or home watch services while away. This provides absolute confidence that the rental will be safe and sound, with real-time human help. And should the power go out, this option won’t need to be reset in order to work.
While there’s no question that new technology continues to change things for the better, in some cases there’s simply no substitute for old-fashioned, reliable human methods. When determining whether or not a new piece of tech could improve your rental, it’s important to consider three important deciding factors: Is it financially viable, will it save time, and is it safe? I always recommend doing your homework to see what others are saying about the product before jumping on board the bandwagon — no matter how tempting the flashy new product may be.