Smart Apartments: What Technology Matters to Renters?

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.

Key Findings

  • 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.

Although VPAs are popular and fairly inexpensive, they’re probably not going to prompt more interest in your property due to their already-high adoption rate.

Jeff Rohde of Simple Condo Advice, a real-estate professional with 25 years of experience, notes that focusing on the right smart devices can truly add value to your rental properties.

“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:

Devices Already Owned by Renters

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.

Property managers can implement smart thermostats and lighting systems and promote them as exclusive cost-saving features, giving units an attractive high-tech advantage.

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:

Most Compelling Devices for Those Likely to Rent

Let’s break down why these top two technologies are seen as valuable to renters:

“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.

Renters Highly Compelled by Thermostats and Lighting, by Rental Type
smart thermostat lighting rental type

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.

Investing in smart thermostats and lighting can increase values and attract any kind of renter—the value and cost-savings is a win-win for property managers and tenants.

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.

Most Likely to Rent for Free Smart Device, by Age

Smart technology is an investment that strongly attracts the largest group of renters, but appeals to nearly any segment, and benefits your business in the long-run.

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.

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