Smart Home Technology Increases Real Estate Value

3 Ways Smart Home Automation Improves the Real Estate Value of Your Home

More homeowners and potential home sellers are investing in smart home technology not only to increase their property value, but as a means to achieve convenience, safety, security and cost-efficiency in their homes.


In the past, homeowners chose to upgrade their houses to increase the real estate value through cosmetic renovations. Increasing curb appeal via expert landscaping and application of a fresh coat of paint, in addition to renovations and improvements involving bathroom remodels, kitchen makeovers, room additions, and more are enhancements are standard procedures for any homeowner or realtor looking to increase the property value and entice potential buyers.

The availability of new technologies that gear towards personalized home automation is progressively changing the standard ways of increasing the real estate value of a residence. A smart home system will add to the value and curb appeal of a property, providing not only a convenience to the homeowners, but safety and security as well. Will hooking up a house to the IoT (Internet of Things) be a worthwhile investment when it is time to sell the house?

But first, what is a smart home and IoT?

Smart Home and IoT Defined

A smart home is a house that uses devices that are connected to the Internet to facilitate remote management and monitoring of appliances and home systems. A home automation system allows home systems such as lighting, heating and air conditioning, appliances, computers, TV set and other entertainment systems, camera and security systems to communicate with each other. All the systems can be remotely controlled by a smart app on any networked device or smartphone.

Smart home devices and systems operate together; their automated actions are based on the preference of the homeowner. There are plenty of smart devices available making it possible to choose particular systems and components based on one's requirements.

Everyone has heard of Amazon's Echo device, which is one example of a smart home technology that has become a staple in many modern households.

IoT is an architectural framework that allows data exchange and integration between computer systems and the actual physical world over a current network infrastructure. It is a network of interconnected devices/appliances/things that are fitted with electronics, or embedded with sensors, or have network connectivity, or software that allows them to communicate, and collect and exchange data.

What Home Automation Offers You

There are plenty of smart house technology products available in the market today and are compatible with the Internet and/or our smartphones. All of these products typically gear towards three common goals:

  • Convenience and Comfort
  • Safety and Security
  • Cost and Energy Efficiency

Convenience and Comfort: A smart house is a more convenient house. Home automation makes life a bit easier as it is possible to remotely control every system in the house. Recent research indicates that smart entertainment is the most popular technology in today's homes. This includes smart TVs with Sensurround speaker systems. A smart HVAC system is a popular option too. From the water sprinklers to the window shades, coffee maker and temperature – everything can be controlled through a tablet or smartphone.

Safety and Security: The second most popular technology option is home security devices. A survey showed that about 90% of the respondents consider home and family security as their top reason for home automation. Statistics indicate that break-ins occur every 20 seconds, making it necessary to secure homes and properties.

Home security system offers peace-of-mind and makes for a less anxious homeowner. Email or text messages are sent by the system to the homeowner if something is amiss in and around the house. Remote CCTVs make it possible for the homeowner to view the house and its vicinity in real-time, even if he is far away. With this technology, locking/unlocking doors and windows and overseeing security cameras and perimeter fences are constantly at one's fingertips.

Cost and Energy Efficiency: Smart thermostats are energy savers. They can be adjusted all throughout the day or even regulated on a per-room basis. Smart light systems are energy efficient, as the homeowner can easily turn off or turn on lights as needed.

More people now recognize the earth's progressing limited resources. By controlling window coverings, HVAC, lightings, and other home systems, the homeowner saves on money and resources. Research indicates that through smart home technology, it is possible for an average household to save over $1,000 per year on utilities.

Home Automation and Real Estate Value

Home automation is not a passing fad. It is estimated that by the year 2020, over 30 billion home automation devices will be connected and linked to the IoT. Though home automation is more attractive to tech-savvy home buyers, it is worth to note that both the old and young population view smart homes to be a cost-effective investment.

Buyers of smart-enabled homes consider safety and security as their top priority. They wish to have smart-tech homes that are not only comfortable to live in, but energy efficient as well. Statistics indicate that baby boomers are more inclined to have home automation than millennials, but this could be because the millennials have not yet reached their full buying capacity.

In just a few more years, the buying power of consumers will stem from the gen-Xers and millennials. When buying homes, many millennials are keen on looking at property with smart automation systems, because they typically embrace the notion that 'green' and automated homes are the keys to protecting the environment in the future.

Research indicates that home automation can increase the value of a home from 3% to 5% of its current value. Real estate agents attest that homes with some kind of connection to IoT tend to fetch higher prices than similar homes without home automation.

IoT-connected homes are more appealing because they are safer and more secure, convenient, energy-efficient, and afford a greater sense of comfort and increased quality of life for the homeowner. These are the characteristics that will propel automated homes to a greater market value in the near future. Smart homes have the potential to offer greater equity and lower a homeowner's loan-to-value ratio.

Smart Home Technology as Investment

Home automation is an investment, but it does not have to be a major one that will dent your pocket big time. If your budget is quite limited but you are willing to make a minor investment, lighting and security systems are the most preferred by home buyers. Other preferred smart home features are a keyless entry, built-in speakers and controllable motorized shades.

Major smart home technology investments that are cost-saving are smart HVAC systems, smart appliances, smart irrigation and smart building materials. These home automation systems can significantly increase the property value. Homeowners will enjoy decreasing home insurance premiums and maintenance costs.

If you are unsure of how much you want to spend on home automation, it is best to start by installing individual smart home features. It is an affordable means to begin building a network of connected devices.

With home automation, homeowners can sell their property at higher prices as buyers expect to pay more for upgraded and functional home automation systems. Fitting your house with smart technology is an investment that will equate to financial gain when it comes to selling.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
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