The rental property market is experiencing continued change as resident preferences evolve. With homeownership less attainable for millennials, Gen Z, and seniors, long-term rentals are becoming increasingly attractive. As a result, renters now expect advanced amenities, particularly smart home technology.
Modern renters prioritize rentals with smart features such as reliable internet, programmable thermostats, and updated security systems. For landlords, the value of these upgrades is shaped by location, renter demographics, market conditions, and expected returns.
What Are Smart Home Devices for Rentals?
Smart home devices are internet-connected technologies that automate and control property functions. In rental housing, the most popular selections include:
- Smart thermostats (Nest, Ecobee)
- Smart locks and keyless entry systems
- Video doorbells and security cameras
- Smart lighting systems
- Water leak detectors
- Smart smoke and carbon monoxide detectors
- Smart plugs and outlets
These devices connect to Wi-Fi networks and are controlled remotely through mobile applications, offering convenience for both landlords and tenants.
The Benefits of Smart Devices in Rental Properties
Increased Property Efficiency and Cost Savings
Smart devices help enhance property efficiency and lower long-term expenses, making properties more appealing to renters seeking convenience and innovation.
Smart thermostats lower heating and cooling costs by learning tenant habits, adjusting for vacant periods, and preventing HVAC misuse. This saves money and reduces maintenance strain.
Smart water leak detectors send real-time alerts, helping avoid costly repairs. Smart lighting supports efforts to reduce electricity use by automatically turning off lights when spaces are unused.
PRO TIP: Install smart thermostats with temperature-range restrictions to prevent tenants from setting extreme temperatures that can damage HVAC systems. Reasonable settings (e.g., 65–78°F) maintain comfort while protecting your equipment.
Enhanced Security and Tenant Safety
Security is a top priority for renters, and smart devices elevate protection levels.
Video doorbells and security cameras help deter theft and vandalism and provide evidence if needed. Sensors alert both landlords and residents to unauthorized entry attempts, which is especially valuable for properties with residents who travel often.
Streamlined Property Management
Smart locks simplify access oversight for rental properties. Rather than changing physical locks between tenants, which can cost $75-150 per turnover, landlords can remotely update access codes. This reduces emergency locksmith calls, provides controlled access for maintenance and contractors, and documents entry activity.
For landlords with several properties, smart locks facilitate self-showings and improve security while lowering management demands.
Higher Rental Income Potential
In competitive markets, especially near universities, tech hubs, or urban centers, smart home features can support monthly rents 5-15% higher. Properties targeting professionals, students, and remote workers tend to benefit most.
Smart home features are now treated as standard amenities, comparable to central air or in-unit laundry. Properties lacking these features may find it harder to attract tenants seeking upgraded rentals.
The Drawbacks of Smart Home Technology in Rentals
Upfront Investment Costs
The principal challenge of adopting smart home technology is the upfront expense. Single devices may be cost-effective, but full smart home systems carry significant costs:
- Smart thermostat: $120-250 per unit
- Smart lock system: $150-300 per door
- Video doorbell: $100-250
- Security camera system: $200-600
- Smart smoke/CO detectors: $80-120 each
- Professional installation: $200-500 per property
A full smart home package for a single-family rental ranges from $1,000 to $3,000. Systems are most effective when installed as a complete set. Market analysis is crucial to ensure rent increases support these expenditures.
Internet Connectivity Requirements
Smart devices rely on strong Wi-Fi. Landlords must decide whether they or tenants will supply the connection. Tenant-managed internet requires cooperation for setup and risks loss of access if disconnected. Providing Wi-Fi increases monthly expenses and management responsibilities. Maintaining smart devices requires firmware updates, troubleshooting, and password oversight, which adds to property management duties.
Tenant Privacy Concerns
While smart technology is welcomed by many renters, privacy concerns are legitimate. Hacked devices, data breaches, and unauthorized monitoring have made some residents cautious about connected devices.
Interior cameras are particularly sensitive, as many jurisdictions prohibit landlords from installing them inside rental units. Even exterior cameras and smart locks that log entry times may worry privacy-conscious renters.
Being transparent about which devices are installed, data collection, and access rights, while allowing tenant control over smart features, helps alleviate privacy concerns.
Maintenance and Technical Support
The introduction of smart devices comes with new maintenance responsibilities:
- Conducting regular firmware and software updates
- Replacing batteries in wireless devices
- Troubleshooting connectivity issues
- Replacing obsolete technology
- Educating tenants on proper usage
Hiring specialized support may be required if you lack technical knowledge, which increases operational costs.
Which Smart Devices Are Worth the Investment?
Evaluating smart devices requires understanding renter demand and performing a detailed cost-benefit analysis.
Highest ROI:
- Smart locks – Cut rekeying costs, enable remote access
- Smart thermostats – Reduce energy bills and prevent HVAC misuse
- Video doorbells – Strengthen security and deter package theft
Moderate ROI:
- Water leak detectors – Prevent major damage
- Smart smoke/CO detectors – Enhance safety and allow remote monitoring
Lower ROI:
- Smart lighting – Convenience and minor energy savings
- Smart plugs – Low cost, limited influence
How to Calculate ROI on Smart Home Upgrades
- Total Investment Cost: Include device purchase, installation, and ongoing expenses
- Monthly Rent Increase: Evaluate comparable properties for feasible rent increase
- Annual Additional Income: Multiply by 12 months
- Cost Savings: Estimate maintenance, utility, and turnover savings
- Payback Period: Divide total investment by (annual income + savings)
Aim for a payback period of 2-4 years. Longer durations should only be considered if holding the property long-term.
PRO TIP: Implement smart devices in one property first. Track operational efficiency, tenant satisfaction, and rent outcomes for 6-12 months to inform broader adoption.
Final Verdict: Should You Upgrade Your Rental Property?
Deciding to upgrade rental properties with smart devices requires strategic evaluation. Smart technology provides operational efficiency, improved security, and easier management, along with potential rental growth, but it also introduces costs and challenges.
Smart devices make the most sense for:
- Units in competitive urban or suburban neighborhoods
- Rentals aimed at young professionals, students, or remote workers
- Landlords overseeing multiple properties who can utilize remote management tools
- Properties with high utility costs where smart thermostats deliver savings
- Areas supported by consistent internet connectivity
Smart devices may not be worthwhile for:
- Budget rentals where tenants emphasize affordability over amenities
- Properties with limited or unreliable internet access
- Markets where smart features are uncommon
- Landlords without technical skill or support systems
- Rentals with older tenants less engaged with technology
Decisions should be data-driven, considering local market conditions, property attributes, and tenant preferences. Implement gradually, assess results, and expand based on demonstrable ROI.
Get Expert Guidance for Your Rental Property Investments
For real estate investors in Chino Hills, smart home upgrades can be a significant factor in rental property performance. Real Property Management Trust combines expert knowledge with local market data to advise on device upgrades, helping you determine which upgrades make financial sense for your rental properties.
Contact us at 909-577-5778 or online to get started with tailored recommendations.
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