Amazon’s personal assistant Alexa and smartphone apps are simplifying life in homes across the country. A/C units, door locks, home security systems and light bulbs are getting smarter.
By the end of 2017, Gartner predicts that 15 percent of households will have adopted home automation using smart devices—and that smart home automation devices of all kinds will be mainstream within five years.
I know! Property managers who offer smart technology now gain a huge marketing advantage to sway renters towards considering their units currently and well into the future.
We asked 300 renters for responses to 12 questions to better understand how property managers could use these popular devices to attract and convince tenants to rent. Here are some of the most important takeaways.
- Almost a quarter of renters already own a virtual personal assistant (VPA), and find them least likely to compel people to rent.
- Overall, condo and apartment renters are more likely to be compelled by smart devices compared to those who rent a house.
- Half of those who say they’re at least “somewhat more likely” to rent for a free smart device are between the ages of 26-35.
Forget VPAs—the Most Commonly Owned Smart Devices
Gartner analysts have noted the incredible rise of VPAs and see this trend continuing into the future—sales for these devices are expected to grow by nearly 500 percent in just five years.
But what does this trend mean for you as a property manager? It means you’ll need to make sure the smart device splash you’re making is a big one.
“I can tell you first hand that ‘smart’ homes, apartments or condos can definitely give a landlord the edge when it comes to renting,” he says. “There’s clear cost-savings to the tenant, which is extremely important in today’s rental market, where pretty much anywhere you go the cost to rent is increasing year after year.”
The best way to gain an edge here is by offering up a uniquely valuable device. Here’s a breakdown of what renters have:
VPAs (23 percent) are the most common device already owned by renters, followed by smart thermostats (17 percent). Another 23 percent don’t own any smart devices. We’ll see below that more practical devices that can cut costs are much more compelling to renters.
Offer Devices that Save Energy and Money
Our homes are getting to know us better. In as many as 4.5 million U.S. homes, you can return home to your preferred temperature, with lights that turn on just before you arrive, all because the system knows when you get home from work.
There are a couple ways smart thermostats and lighting can save you and your residents money.
A central control panel in your main office could allow management to view and control temperatures and wattage used for lights for all units, and adjust if necessary. This means you can keep tight control over the temperature in vacant units, and help renters program light schedules to significantly cut electric bill costs. Also, insurance companies often offer discounts for these additions.
Because of this value, it’s no surprise that these types of smart devices—thermostats (20 percent) and lighting (19 percent)—ranked as the most compelling:
Let’s break down why these top two technologies are seen as valuable to renters:
- Many studies have proven the energy savings achieved by using smart thermostats. Tests on the popular Nest Learning Thermostat show an average of 12 percent savings in electricity for heating.
- Similarly, Gartner claims smart lighting can potentially reduce energy costs by 90 percent with installations in commercial properties.
“Smart home tech works well as an amenity because it appeals to so many distinct groups of renters,” says Brian Davis, co-founder and blogger at SparkRental.com. “For example, a smart thermostat helps reduce energy usage, adding appeal for eco-friendly renters. Smart thermostats also save money on utilities, which appeals to just about everyone.”
Market Smart Home Technology to Any Type of Renter
Since these cost-cutting smart devices are most compelling, we decided to dig further to see if the rental type made a difference. It turns out condo renters are overall “much more likely” to rent if the unit is marketed as a “smart home”, with 60 percent compelled by thermostats and 56 percent compelled by lighting.
Of course, the 46 percent for apartment renters and 41 percent for house renters is still a positive sign that this pairing of technologies is a strong selling point for any property manager.
Davis says adding two or three smart components to your properties and marketing it as a smart home is a great way to increase value.
“Landlords can spend less than $1,000 total on these upgrades, and can often recover that cost within 12-18 months in the form of higher rents,” he says.
Invest in Smart Technology to Draw Millennial Renters
A survey conducted in 2016 shows that 86 percent of millennials say that they’re willing to pay more for a property fitted with smart technology.
“If you’re renting to millennials, offering smart devices as part of the rental package shows the tenant that the landlord is keeping ahead of the game and so gives it an edge in the rental market,” Rohde says.
Millennials, those roughly between 18 and 35, make up 68 percent of the renters we surveyed that were most likely to rent for smart technology.
How Can Smart Technology Drive Interest in My Properties?
Dozens of companies offer smart devices and home automation solutions, like Nest or Honeywell for thermostats. G.E., Philips and even IKEA offer smart bulbs and lighting systems at various levels of sophistication.
After installation, you can use property management software to track the costs and, through integrations, track the energy usage to see how much you and your residents are saving over time. Finally, you can use property marketing tools to promote these new smart amenities to find new prospective renters.
View our list of top property management software vendors, or give us a call at (844) 688-1783 for a free phone consultation to help narrow down your options.