Does Smart Technology Add Value to a Home? Not as Much as You Might Think – Mansion Global

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Homeowners beware: Decking a house out with all the latest smart-home bells and whistles may not appeal to future buyers as much as one might expect.
Newly built luxury homes are increasingly sold equipped with integrated smart-home technology—or the option to have smart systems installed before the buyer takes ownership. In the age of increasing automation, intuitive lighting and heating systems and internet-enabled appliances, upgrading a home to include the latest smart tech can seem like a good way to add value to the property. But property developers and agents say not so fast. 
“We have some customers who are very committed to home technology: They value efficiency and convenience. They often know the functionality and systems that they want, and it is imperative to their purchase that their home is equipped with a high degree of automation,” said Gabriel York, CEO of Lodha UK, which specializes in super-prime property, operating its own hospitality division in its buildings.
“But we have another cohort of customers who have been expressing somewhat different preferences. They are not technophobes—some work in the tech industry—but they are seeking to limit the intrusion of technology into their personal and family lives, and control the amount of time that they spend interacting with technology and systems,” he said.
As the Internet of Things has taken off and phones and tablets increasingly offer an app for everything, attitudes around smart tech among some buyers have shifted.
“A decade ago, it was quite thrilling to be able to use your phone to control music on wireless speakers,” he said, “but today, the sheer volume of tasks for which a phone or screen is now the primary interface has increased to the point that, for some, it has become a steady and continuous intrusion on quality time with family, with friends or alone.”
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The Siren Song of Simplicity
Particularly when it comes to buying a resale property, pre-installed systems can sometimes present a headache for buyers who might not be familiar with how to operate them. Smart thermostat systems, for example, often leave new homeowners scratching their heads, said Scott Coggins, managing partner and principal broker for The Agency in Nashville. 
Such systems are not always very intuitive to use and can require video instructions to operate.
“It’s sad that homeowners buy a new home and they have to spend an hour on Google trying to figure out how to use the smart devices,” he said. “It’s almost like we’re going forward but going backward at the same time.”
Mr. Coggins spent seven years working in Silicon Valley for the world’s second-largest electronics manufacturer and is an avid user of smart appliances in his own home. He said that although systems such as smart thermostats and biometric locks can complicate the move-in process for new homeowners, “that doesn’t mean that homeowners who love the streamlined simplicity of internet-enabled tech shouldn’t indulge. … The majority of smart tech in homes are personal devices, so they don’t necessarily stay with the home when you move.”
A Double-Edged Sword
While the majority of high-net-worth buyers do opt for some degree of integrated smart tech when purchasing a new build, particularly a second or third home, certain buyers prefer to keep things simple, said Angel Gonzalez, a sales associate at Douglas Elliman in Miami.
“The clients that are maybe of a certain demographic in terms of age don’t want anything that’s too fussy,” he said. While some buyers are enticed by features such as motorized shades and intuitive lighting systems, “it doesn’t mean that everybody’s going to go for it, and I wouldn’t say that it’s ever going to kill a deal,” he said. Most high-net-worth buyers in search of a luxury property prioritize location, along with other traditional factors and amenities, and are prepared to install any smart-tech they want themselves, he added.
A tech-heavy home risks deterring a buyer who prefers simple wall switches to iPad apps, whereas a buyer who embraces smart tech is unlikely to walk away from a dream property because it is not kitted out with all the latest gadgets and systems. This means that installing expensive technology is unlikely to translate to a boost in sales price.
“I do not think it makes a tremendous amount of value behind the sale price,,” Mr. Gonzalez said, adding that it’s not the reason why people would buy a home. “I have listings that are not smart homes that are $17 million homes and it never deters the buyer,” he said.
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What to Avoid
For homeowners who want to invest in smart tech without alienating future buyers, there are certain products and systems that are best avoided, said Jared Antin, managing director of Elegran Real Estate in New York. “It’s important for homeowners to carefully consider the specific features and capabilities of smart-home systems before making an investment, to ensure that they are investing in technology that will be useful and relevant for years to come and has broad market appeal,” he said.
He cautioned against installing products that require significant modifications to electrical or plumbing systems. “Upgrades that are difficult or expensive to undo can make it harder to sell a home in the future, particularly if potential buyers are concerned about the complexity or reliability of the smart-tech systems,” he said.
Smart home products that require proprietary platforms to use, locking future buyers into using specific apps or operating systems, can also be off-putting, he added. Homeowners should also avoid trendy or niche products, such as automated pet feeders or wine storage systems. “While these might be appealing to some buyers, they may not add significant value to the property in the eyes of a larger number of potential buyers,” he said.
Another common source of concern among buyers when it comes to smart tech is security. “I think people are becoming more tech security conscious,” Mr. Coggins said. That’s particularly true when it comes to security systems where cameras are inside the house. “Although manufacturers are racing to catch up with the security of these devices, they’re still vulnerable to people actually hacking into your system,” he said. “So if someone has a whole-home security system to include cameras and there are cameras on the inside, that would turn people off.”
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The Bottom Line
Homeowners who want to enjoy the many advantages of integrated smart-home systems don’t need to avoid them. Some additions and upgrades are likely to appeal to a majority of buyers and add to a resale property’s desirability, even if they don’t automatically add dollar signs to the final sale price. 
Investing in systems that support the use of smart tech is a wise place to start. 
“Smart homes are not necessarily the actual devices that are inside but the ability to connect the devices,” Mr. Coggins said. “I think having a networked home is probably one of the top commodities when looking for smart technology in a home.”
Whether a buyer wants to install a wireless television, internet-enabled piano or smartphone-controlled grill, a mesh network provides extended coverage and helps to eliminate problems such as dead zones or slow connections that can hamper home-tech usage, a bonus that’s likely to appeal to almost every buyer.
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Other straightforward upgrades can likewise boost a home’s desirability. 
“We find that some basic degree of home automation has near universal appeal,” Mr. York said. “Most people will want to be able to turn off all lights with a single switch when they leave home, and many will want some pre-programmed light settings and temperature controls. Many, but not all, like automated blinds and curtains, and some like to have the ability to pre-warm an oven as they drive home. Beyond this, individual tastes start to diverge enormously.”
Ultimately, homeowners need to be savvy when it comes to investing. 
“Smart tech doesn’t automatically increase a home’s value, so a homeowner shouldn’t go out of their way to add smart tech just to sell a home,” Mr. Antin said. “Rather, if they need to replace a smoke detector, light switch, thermostat, appliance, etcetera, they should opt to install a well-known smart device, rather than a traditional [one]—but not go and replace perfectly functional traditional items thinking they would raise the value, because they won’t.”
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