Why would I want to spend a dime upgrading my rental home with smart features?
1. Increase the appeal of your home to the largest percentage of renters
- In 2014, Millennials made up a whopping 71.6% of the renting population.
- Millennials are buying homes later in life than young adults have in the past and making your rental property a smart home is a great way to appeal to the largest percentage or renters.
- Schlage conducted a survey of Millennials in 2017 in regards to smart homes and 61% said they were more willing to rent an apartment or home specifically because of it's electronic access features.
2. Increase your rent value
- 20% of people surveyed said they would pay MORE in rent for a smart home or apartment. Rent in today's market is high and continuing to rise. A smart home is a great way to get even more out of your investment.
- Millennials also said they would pay a fifth more for smart home features.
- Let's do some quick math. Say your 3 bed 2 bath home is renting for $1800 a month BEFORE you add any smart home upgrades. Now let's say the tenants move out and you decide to invest $2000 in smart home features during the rehab before putting it back on the market. Based on this survey, you could now reasonably expect to rent your home for $360 more per month, so $2160 total. After the 6th month of collecting rent from the new tenants in their cool new smart home, you will have recouped your investment.
- If these tenants stay in the house for a standard 12 month lease, you will have DOUBLED your initial $2000 investment by the time they move out and it's all additional profits from here! No brainer!
3. Get ahead of the game
- 63% of respondents in the Schlage survey reported that they believe that landlords will have to offer smart home features in order to remain marketable in the next 10 years and 45% believe that physical keys will be completely obsolete in those same 10 years.
- The data shows that eventually, smart home features are going to be EXPECTED and not just cool extra features.
- 10 years is still a long time though. By making your rental property smart now, you can get ahead of the game and increase your rent value like we talked about in reason #2 before you start losing money for not having a smart rental property.
4. Lower your turnover costs
- What's the first thing you do when a tenant moves out? Change the locks, of course! You don't know who has copies of those keys or how many are out there, and you want to make sure the property is secure for the next tenants. But why spend money every time you have a tenant turnover?
- Smart locks will enable you to change who has access to the property in a few seconds by simply changing the code.
- Gone are the days of hiring a locksmith and changing every single lock. Not to mention keeping track of all those keys! There's an app for that. This is especially benefitial for landlords with multiple properties.
5. Compensate for the negative aspects of your property
- So your home is a little bit old? Maybe it isn't in the best neighborhood. Adding cost effective upgrades and making your rental property a smart home is a great way to negate these not so attractive aspects of your home.
- Adding a video surveillance system, which can be as easy as starting out with a video doorbell, is a great way to keep a home secure and give your tenants peace of mind when they aren't home or even for your own peace of mind when the property is vacant.
6. Help your tenants save money
- Smart thermostats and smart lighting that can be controlled when you are away from home are great ways to decrease your electric bill. "Honey, did you turn off the air conditioner?" "Uhhhh...." We've all been there.
- Giving your tenants the ability to make these adjustments when they are away from home will help them save money and make the added rental cost of a smart home comparable.
Important final thoughts
- Don't forget that once the lease is signed on your new smart rental, you need to be very careful to make sure that you have turned over every smart aspect of the home to the tenant and that you don't have access. You don't want to impede on your tenant's privacy or be accused of watching the security cameras. Failing to do this can be a quick and easy way to get yourself in legal trouble.
- A smart rental property is a no brainer. We saw that we can completely recoup our smart home investment in as little as 6 months. However, managing that smart home and the tenants that rent it can be pretty tricky. Thankfully, Mesa Properties is on the job. Visit our website or give us a call today for all of your management needs.