In this tech-driven world, it’s hard to find an industry that hasn’t been completely disrupted by new technologies. When it comes to property management though, and the actual homes and units investors lease out, there is still plenty of room for change.
While you might have been advised by property consultants or other people to steer clear of adding tech features to your properties due to costs and potential risks, the fact is, there are times when adding value through the latest gadgets can work in your favour.
Reasons to add tech
One key benefit of installing smart-home products and other tech into your properties is that doing so enables you to charge higher rents and attract top tenants. If you want to rent out a high-end home or apartment to fussy buyers, it may be hard to get the maximum price if all the latest gadgets aren’t included. These types of items are expected.
With younger generations accessing tech products everywhere they go, and now being a big part of the rental market, tech-inclusive properties should be further snapped up. Plus, if you want to rent your property as a short-term vacation option, via holiday let services or Airbnb and the like, having cool tech in your property should help with bookings. Many people want to go away to have a fun experience and to try new things. You can provide this by installing fun “toys” for people to use when staying in your property.
Smart assistants such as Google Assistant, Siri and Alexa can be the central hub of a smart home and smart speakers with inbuilt smart assistants will become increasingly popular household gadgets. Setting up your property with this in mind could help improve occupancy rates
A caveat, though: if your home is in a low socio-economic area and the people who want to rent in the suburbs can’t pay high prices anyway, the investment in tech items probably won’t be worth it. When deciding whether or not to add such pieces, always consider your target market.
Another benefit of incorporating technology into your rentals is that many smart-home products lead to energy and water savings. If you have to pay for these utilities yourself, this can add up to more money in your pocket over time. If, however, your tenants pay for utilities, it’s still a plus as you can mention the efficiency of the home in rental advertisements and draw ideal tenants in.
Options that your tenants will happy to live with are smart lights, which turn on and off, dim, and some change colour via an app or smart assistant. For home security install smart cameras. Smart cameras connect to your Wi-Fi network and are controlled via app or voice.
In the near future, Australians are likely to see more smart products that are already readily available overseas, such as thermostats, window blinds, and smart locks.
There are also some interesting concepts in development such as smart mirrors and smart windows – see-through panes of glass that can turn into a touch screen, adjust their transparency, and (one day) display virtual views.
Consider installing an energy monitor, too. This tech will check energy expenditure on a room-by-room basis and help you to pinpoint faulty wiring, appliances, or other problems before they worsen and cost your tenants a bomb. This all makes your property more appealing.
Of course, you must consider the potential downsides of tech installation, too. By educating yourself on possible risks, you’ll be better able to make the right decision for your specific needs. One of the key things to think about is whether you feel comfortable spending the money on buying and installing new gear. This exercise can be costly, so work out the numbers to see if the increase in price you can charge, plus any potential savings, will be enough to cover the costs involved. Work out how many months or years you want to see a return on investment in, and if the numbers don’t add up, either reduce your level of spending on tech or avoid it altogether. When running numbers, be sure to include costs for installation, maintenance, repairs, and the replacement of lost or damaged accessories (e.g. remotes).
If your property is located in an area that doesn’t get decent internet service, your tenants may end up complaining about not being able to use the tech products you install. Bear this in mind when making your decision. Alternatively, you could pay to have an electrician install Ethernet wiring in the property or other fixtures and fittings to ensure smart-home products work reliably. If you’re planning to do some renovations on the property anyhow, this should be cost-effective.
Keep in mind, too, that some people don’t actually want too many smart-tech devices in the home they rent because it raises privacy concerns for them. They may worry you’re somehow monitoring them through the gear, or that you will have control (via apps on smartphones and tablets, for example) over the technology. Plus, people sometimes don’t want to spend time learning how to use included tech.
Be aware, then, that smart-home products in investment properties can turn some potential renters off for these reasons. Reduce this risk by providing tenants with detailed information about how systems work and what you have control over, and explain how their privacy is maintained.
As our technology evolves and begins to integrate into our homes, it is worth, as a property investor, weighing up the option of including smart-home systems in your investments to help increase rentability in a saturated area or at a healthier weekly return.
And is there a benefit in making everything smart? There are already smart spatulas and toothbrushes. In the coming years, almost everything will likely be connected, or at least try to be.