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How to choose smart tech in your rental business: Part 1

08/19/2015

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Takeaways:

Real estate agents, property managers and landlords need to be educated and aware of what types of technology upgrades can best serve their clients. The term “smart home” applies to any home equipped with lighting, heating and electronic devices that can be controlled remotely by a phone or computer. Ultimately, the most important amenities for renters are the basics: a washer and dryer, upscale flooring and appliances.

It can be easy to get swept away by the waves of technological advances recently. Staying afloat requires swimming through hundreds of articles with your eyes glued to your computer screen.

The onslaught of new technology is especially prevalent when it comes to products for the home, and this becomes even truer when discussing upgrades to investment and rental properties.

Which products can make your property more attractive to potential renters? Which product will be outdated and irrelevant by the time they’re installed? There are many new trends that seem poised for long-term saturation in the market, while others might just be a sweet — then sour — flavor of the week.

An influx of exciting products means that real estate agents and property owners alike have much more to consider. Real estate agents, property managers and landlords need to be educated and aware of what types of technology upgrades can best serve their clients.

So how can you best use home tech trends in your rental property?

Navigating the smart house revolution

The term smart house is thrown around a lot recently, and this overarching term ultimately applies to any home equipped with lighting, heating and electronic devices that can be controlled remotely by a phone or computer.

Much has been written regarding remote door locks and smartphone-enabled thermostats, but these once-exciting developments are already feeling dated.

Instead of just having a thermostat you can control from your smartphone, what about being able to control each vent in your house, thus enabling you to have custom temperatures for every room?

The Keen Home Smart Vents are just one example of intelligent vent systems that are sensitive to temperature — meaning they can self-adjust and emit the appropriate temperature without programming.

So how should a real estate agent address these types of innovations? There is a general rule of thumb when considering which products to recommend to clients, and that is examining cost versus actual solution.

Ask yourself if these types of products will save the owner and potential renter’s money in the long run. Further, will they boost the marketability of the property?

Bear in mind that smart products provide cost-saving implications, as well as that wow factor. Because most renters pay their own utilities, having something that lowers monthly costs for them will always be attractive, and many states offer quite a few incentives for installing energy-efficient home upgrades.

Be smart about smart appliances

There are other ways in which home technology is progressing beyond smart home tech; home appliances are a huge selling point to potential renters.

“Among higher-end rental properties, ‘smart home’ components are growing increasingly popular and chic,” said Brian Davis, VP of EZ Landlord Forms.

“But ultimately, the most important amenities for renters are the basics: a washer and dryer, upscale flooring and appliances.”

The vital amenities for renters are the basics: a washer and dryer, upscale flooring and appliances.

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The importance of having a solid line of appliances in a rental property is surely a given, and real estate agents can be confident that their clients will see profitability if the right products are selected.

Iriana Shiyan / Shutterstock.com

Iriana Shiyan / Shutterstock.com

The new smart washer and dryer creations from LG are just some examples of the impressive evolution of essential appliances and how they can boost your rental property.

The impressive evolution of essential appliances can boost your rental property and the rent.

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But Virginia-based landlord Patrick Christofaro says landlords still need to ensure that new appliances are actually useful, “It is very easy to get carried away when it comes to the smart home movement.

“However, I’ve utilized similar products to LG in my home and have found that renters really do react positively to high-end appliances. The ‘washer and dryer situation’ is often the first question I get when showing my properties, so they’re very important to the consumer. Because of that I can charge around $100-$200 more each month.”

Step up security — but avoid frivolity

Home security is another hot topic within the smart home arena. Feeling secure in one’s home means that renters are looking for a robust security system, as well as a safe location.

Many new systems, such as this Protection 1 home automation system, which starts at $34.99 a month, allow you to arm your security system and lock and unlock doors remotely, as well as control your lighting, appliances and temperatures from your current location. So, can smart security systems provide a return? Landlord Sam Rahimi says yes.

“I’ve used Protection 1 security systems in my rental properties for the past couple years, and renters certainly notice when there’s a robust security system installed,” Rahimi said.

“It’s always a bonus for tenants and has enabled me to reconsider my rates moving forward and capitalize on my initial investment.”

“Focus on fixtures that can’t be removed by a tenant; ones that they are unlikely to already own themselves,” Davis said. “This will enable landlords to charge a bit more.”

But remember, for every cost-saving energy technology or appliance solution there are home tech products that will only drain your wallet.

Will potential renters need a remotely enabled Petcube pet monitoring system that costs $199 per unit? The onslaught of negative reviews on Amazon.com says otherwise.

How about a coffee maker that fits under your countertop and features smartphone controls? Maybe you should take a deep breath before considering the installation of an $11,000 coffee maker by TopBrewer.

Perhaps there’s a small niche market for these products, but nothing to invest your time and money into — especially when the Smarter Wi-Fi coffee machine starts at the much more reasonable price of $150.

There are many other app-controlled options that still offer that “smart home” pizazz without the price tag.

There are many app-controlled options that  offer that “smart home” pizazz without the price.

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Although many landlords want to make their property as technologically appealing to renters as possible, not all investments will bring you a higher property value or desirability.

So, now you know how to use home trends for your rentals — the next step is deciding which top tech is right for your property.

Stay tuned for Part 2 tomorrow.

Terri Engels is a Boston-based lifestyle writer who writes about the issues closest to her heart with a particular focus on real estate and home improvement. You can follow her on Twitter or LinkedIn.

Email Terri Engels.

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