Are you living with smart home technology in your own home? Maybe you have a vacuum that takes off to sweep the floors at pre-programmed times. Perhaps you’re working with a smart remote for your garage door or maybe the entire house is wired to your favorite entertainment apps. You might be fully invested in energy efficiency, with smart thermostats and low-flow plumbing fixtures.
It’s no surprise if you’ve adapted to even one smart home system. This is becoming the new normal in residences across the country, whether they’re owned or rented.
Which brings us to the topic of our discussion today.
One of the most significant shifts in the property management industry over the last few years has been the integration of smart home technology into modern rental properties. For Phoenix real estate investors, this trend offers a lucrative opportunity to offer more appealing and convenient rental homes. There are challenges, too, of course, especially around the cost of implementation and even some privacy concerns when we’re talking about security and video recording smart home features.
As expert property managers in Phoenix, we’re here to investigate all of the pros and cons and ins and outs around smart home technology and its role in rental properties.
Let’s help you understand and implement these advancements. They can significantly impact your property’s appeal, efficiency, and value.
Why Opt for and Invest in Smart Home Phoenix Rentals?
Smart home technology has been available and popular for many years already, but only recently has the demand peaked among tenants.
A lot of tenants today are more digitally-minded. Think about the growing number of remote workers who are moving into Phoenix and the rental properties here. They have on-demand needs and are more than comfortable handing over their daily needs and functions to tech-driven systems and solutions. There are also demographic shifts that impact the demand for smart home tech. A lot of renters today are younger, and between our population of tech-savvy millennials and Gen Z renters, there's an increasing demand for smart home technology within the rentals they’re considering.
Your tenants expect convenience, efficiency, and security, and all of those expectations can be met with better technology inside of your rental unit. A well-integrated smart home shows that you’re listening to what tenants want, and providing it. And it’s not just for the benefit of your tenant. By offering features such as automated lighting, smart thermostats, and security systems, you will not only attract premium tenants but also justify higher rental prices.
Benefits of Tech Integration in Modern Phoenix Rental Homes
Providing a Better Tenant Experience Smart homes provide conveniences that traditional homes can't match. With voice-controlled assistants and mobile app integrations, tenants can control lighting, heating, and even appliances remotely. There’s something joyful about waking up in the morning and having your coffee ready and waiting for you in the pot. This is the type of thing that gets the attention of tenants. It helps you attract good renters and it helps you retain them. | Offering an Energy-Efficient Rental Home Energy efficiency is taking on a new sense of urgency, especially among modern tenants. This is another benefit to smart home tech. Smart thermostats and energy management systems help reduce utility bills by optimizing energy consumption. This is not only environmentally friendly but also a selling point for eco-conscious tenants. A lot of the technology that’s available is intuitive, for example, setting air and water temperature levels that anticipate how many people are in the home. Tenants will love the energy savings and the eco-friendly element. |
Improving Safety and Security There’s almost nothing more important to both tenants and landlords than safety. You want to keep your tenants safe while they’re living in your rental home. You also want to protect your investment and keep it secure, whether it’s occupied or vacant. Integrated security systems, including smart locks, cameras, and motion sensors, offer peace of mind for tenants, making properties more desirable. | Increasing the Value of your Investment One of the most important reasons for investors to take smart home upgrades seriously is that you’ll earn more money. Yes, there’s an initial upfront cost, but that’s true of any renovation or improvement that you make. This is worth it. Properties equipped with smart technology tend to have a higher perceived value. This can translate to increased rental income and property worth when it comes time to sell. |
Choosing the Smart Home Tech You’ll Integrate
Now that you understand the value and the necessity of making your Phoenix rental home friendly to smart home features and technologies, where should you start?
That’s an excellent question. You don’t have to take an all-or-nothing approach. Instead, make incremental upgrades and updates that are going to make you especially competitive. You don’t have to spend ten thousand dollars making your rental property completely digital and all of your systems voice-activated. Start small and improve when you can.
As with all improvements and upgrades, making these updates during turnover periods is an excellent way to renovate your property without disrupting your tenants. But, if you’re using smart home features as an incentive to get your existing tenants to renew their lease agreement, go ahead and make the necessary changes while your tenants are in place. They’ll endure a bit of inconvenience in order to enjoy the smart tech you’re offering.
Here are some strategies and good choices when it comes to integrating smart home tech into your Phoenix rentals.
Start Small: Lights and Locks and Plugs
Smart lighting systems can adapt to tenant routines and can be controlled remotely. This feature can feel pretty luxurious when tenants are turning the lights on in their home before they even arrive. Energy costs will be contained, and it will help you, too, when the property is vacant. You don’t want to invite criminals and risk, so by setting lights to turn on inside the home as night falls, it won’t look unoccupied and inviting to those who might see an opportunity to break in and steal appliances or wiring.
Give up the keys and install a digital keypad so tenants can easily let themselves in and out of the house without pulling out keys. This keeps your property more secure; there are no keys to be stolen or copied. It also provides tenants with ease and more peace of mind; they won’t have to worry about forgetting their keys or locking those keys inside the house. Again, there are benefits to this upgrade for owners. When you’re having turnover work done, vendors, contractors, and service professionals can access the property without you being there to let them in. You can easily change the codes between tenants.
Plugs and outlets can be smarter. You can install smart plugs without any additional wiring. They will allow users to plug in devices and use those devices from anywhere. A coffee pot in the kitchen can be turned on from the bedroom. A slow cooker can be turned on from 10 miles away. These outlets can also power down printers, televisions, and other energy vampires when they’re not being used. The plug is managed through an app on the tenant’s smartphone.
Begin your smart home integration by considering the essentials like smart locks and plugs. These are cost-effective installations that offer immediate benefits to tenants and landlords.
Smart Thermostats for Ease and Efficiency
Smart thermostats are an excellent idea for any property, including rentals. While programmable thermostats are not necessarily a new idea, smart thermostats have come a long way since the early models. They are now equipped to consider weather patterns and user behavior to adjust heating or cooling as needed. Your tenants can also turn on the air conditioning or the heat from the outside of the home, allowing them to come home to a cool or warm house. As a landlord, you’ll have an easier time updating the temperature before a showing or during a vacancy. This is Phoenix, and our heat is intense during the long summers. We also face cold nights in the winter. A smart thermostat is a worthy investment.
Smart Appliances
Appliances are expensive, so this is an upgrade that you might not make until your existing appliances are old and ready to be replaced. When it is time to buy an updated refrigerator or dishwasher or you decide to provide in-unit laundry for your rentals, make sure you’re looking for appliances that are likely to appeal to digitally minded tenants. They will appreciate the high-tech appliances that can be turned on, off, and managed via smartphone apps. You can integrate smart refrigerators, ovens, and washing machines.
Smart appliances offer convenience because all features are controlled remotely. Things can be turned on or off and appliances can be set to specific schedules. Automating your rental home through smart appliances will also contribute to the energy efficiency that we’ve talked about. Lower utility bills and reduced power consumption are part of what these appliances can do, making them great for owners, tenants, and the planet.
Wondering just how smart appliances can get? We recently came across a refrigerator that can text recipe suggestions based on the food that’s stored inside. Phoenix tenants probably don’t need all of that (yet), but it’s pretty fascinating.
Investing in Smart Security
It’s always a good idea to prioritize your investment in smart security systems. This might include any of the following, depending on your property:
Video doorbells
CCTV cameras
Motion detector lights
All of these can deter crime and provide tenants with a greater sense of security. Cameras will really only be appropriate outside of multifamily or apartment buildings so you can see who is coming and going.
However, video doorbells are extremely popular with residents. They like being able to see who is at the front door before they decide to open it. They can also watch who is approaching their home when they aren’t there. It’s easier to track packages and record the visitors who may be arriving.
How Can Smart Sensors Help Phoenix Landlords and Tenants?
Sensors can be used to protect your property and to notify you or your tenants if something seems off.
External sensors on a property can detect when a door or a window opens or closes. There are sensors that can detect vibrations and movement. Tenants or owners can receive notifications directly to their phones any time something stirs in the property, whether it’s a cabinet or a closet. This is some extra security for tenants, who are eager to protect their belongings, particularly if they’re living in a roommate situation or if they have children or pets at home.
Other types of sensors that are part of the Internet of Things (IoT) technology can protect your property and reduce the risk of expensive emergency maintenance repairs. For example, a smart moisture sensor can sound an alarm bell if there’s excess moisture in your property. You’ll get an alert so that a plumbing issue can be found before it turns into a major leak, a broken pipe, or a damp foundation.
Should You Offer High-Speed Internet?
All of these smart home systems require an internet connection.
What does that mean for your rental property, and what’s included? If you’re like most landlords, you expect that your tenants will set up their own internet service. They’re likely handling their own utility accounts, too.
An argument can be made for providing internet to your tenants, and then including the cost in the rental amount. Actually, more than one argument can be made. We can think of a few.
The logistics. As we mentioned. For a truly smart home experience, the property has to be equipped with high-speed internet. All of the smart devices we’re talking about here today will require a stable connection to function optimally. You do not want to suspend the performance or the availability of the smart home features that you’ve invested in. By providing a rental home that’s already connected to Wi-Fi, you’re making the move-in process more seamless.
The tenant demands. As you know, many tenants today are working from home. They’re going to need to have their internet up and running before they can really settle in. When you can provide that, you’ll make your home even more attractive. It’s a competitive advantage.
You’re not really losing money. When you provide internet service to your tenants, you’re not paying their bills. You’re including the monthly charge in your rent or even as a separate fee. This is money you’re earning back. The inclusion of the Internet justifies a higher rental value.
Think about offering high-speed internet. Not only will you be marketing this as a benefit of choosing your property, but you’re also talking about all the smart home tech that is hooked up and ready to use.
Preparing for Potential Challenges
You can see the benefits of implementing and integrating smart technology into your Phoenix rental home.
That doesn’t mean there aren’t challenges, and we promised to talk about those, too, so here they are.
Security Risks Home automation systems and smart technology are great when it comes to access, but problems can occur when access is granted to people who are not authorized to have it. With technology comes the risk of hackers and phishers. There can be vulnerabilities. There can be hiccups. What if that digital keypad stops working and there’s not a backup key with your tenant? Or, what if there’s a network failure or an update that’s needed but not installed? Remember to do your research and make sure that any installation and monitoring is done by a reputable and trustworthy company. | Connectivity Issues Smart devices require a good internet connection to function appropriately, and that’s why we have recommended that you provide internet services in your rental property. Not only do you need to provide those services, you need to keep up with them. The internet goes out from time to time. We all deal with this frustration. But, that means all of your property’s smart features will have outages, too. There’s also the fact that multiple devices may require different applications and support. | Learning Curve For early adopters, learning the latest and greatest technology is second nature. But not all of us are so quick on the uptake. All technology has a learning curve, and smart tech can be overwhelming, especially if you’re working with home technology that you’ve never seen before. Your tenants may have a steep learning curve, too, and this can be frustrating. Offer the smart home tech, but don’t force it. You may want to have analog options available or choose devices that are less complicated. |
There’s also the upfront cost. You have to be willing to invest in this technology.
Smart home tech integration in modern rental properties is more than just a trend—it's the future of real estate. By aligning with this shift and meeting the demand, real estate investors in Phoenix can maximize their property's potential, attract top-tier tenants, and increase their ROI.
Let’s talk about bringing technology to your rentals. Contact us at Service Star Realty.
Service Star Realty
2929 East Camelback Road #119, Phoenix, AZ 85016
(480) 426-9696
