How Do Smart Homes & Smart Technology Impact the Rental Market?
We are currently living in a world with smartphones, smart cars, smart televisions, and now, smart homes. Once considered a luxury, smart technology, including data analytics and smart grids, has become a standard expectation for many renters, especially Millennials and Gen Z. In fact, we are already seeing the next step in this evolution: smart apartments. From keyless locks to intelligent devices like smart thermostats, technology is redefining how tenants engage with their homes and manage energy use.
Market Creation
Millennials have become the largest living generation, surpassing baby boomers. They’ve grown up with constant access to data processing and integration with information technology, and as they enter the home buyer market, they’ve brought their proclivity for “smart tech” with them. According to Rently, 58% of renters would sacrifice pool or gym amenities for better smart home features. Furthermore, 65% of renters said smart features make a unit more appealing, and 52% would pay $20+ more monthly for a home with smart technology according to a recent study from Business Wire.
But now a new generation, Gen-Z, has entered the rental marketplace. Gen-Z grew up with even greater technological integration, and many have spent their entire adult lives with smart technology. About 62% of Gen Z renters assert that smart-home technology is “extremely” important when choosing where to live. About 86% of Gen Z report a positive attitude toward adopting smart-home products, driven mainly by convenience and improved user experiences.
Here’s the reality: millions of renters expect smart technology in their homes and are willing to pay for it. As a landlord or property manager, this is your chance to future-proof your investment. Upgrading your properties with smart features, such as user interfaces that enhance tenant interactions, can give your rentals a competitive edge, attract higher-quality tenants, reduce vacancies, and even justify higher rent prices in a market increasingly driven by tech expectations.
Convenient for You and Your Tenants
The global smart home market has skyrocketed, and the integration of smart grids and intelligent technology into the rental units goes far beyond just following a trend. For landlords and property managers, smart tech is a serious time-saver and operational upgrade. Think about the daily inefficiencies in traditional property management: coordinating maintenance visits, juggling key handoffs, managing utility use manually. Smart systems eliminate those bottlenecks. With a single app or dashboard, you can remotely:
- Adjust building temperature to optimize energy use
- Monitor and review security camera footage in real-time
- Unlock or lock entryways
- Receive alerts on maintenance issues before they’re even reported
This creates not only smoother operations but also fewer emergency calls, faster response times, and better tenant satisfaction through enhanced user behavior insights.
Imagine this: it’s 9 PM after a long day. You’ve just sat down to relax when your phone rings; your tenant is locked out. Normally, you’d have no choice but to get dressed, drive over, and let them in. However, with smart locks, you simply pull out your phone, open the app, and press “unlock.” Problem solved in under 30 seconds.
Smart locks are just the beginning. Smart thermostats allow you and your tenants to manage HVAC remotely, saving up to 12% on heating and cooling. Smart lighting systems can automatically adjust to daylight hours or occupancy, reducing energy waste. Smart leak detectors send instant alerts to your phone, letting you shut off water to avoid thousands in damage.
Smart homes don’t just benefit renters. They are game-changers for landlords too. You save time, cut costs, and build a better tenant experience without the headache.
Smart Savings
From a tenant’s perspective, living in an apartment with smart technology offers countless benefits:
- Smart thermostats deliver 10-15% savings on heating and cooling costs, optimizing real-time data.
- Smart lighting systems, especially those leveraging daylight harvesting and adaptive control, can slash lighting energy use by 30% in residential settings and 80% in closets or bathrooms.
- Smart plugs and leak sensors prevent waste and costly damages by automatically shutting off idle devices.
These savings aren’t just for tenants, as they translate directly into benefits for landlords and property managers:
- A 2024 Parks Associates study shows multifamily owners utilizing integrated smart HVAC, lighting, and water sensors saw 18–19% reductions in combined energy and water utility costs.
- High-efficiency, automated systems help meet rising ESG and environmental sustainability standards, unlocking potential cost savings of 15–30% annually across multifamily portfolios.
Smart technology saves money in multiple ways. It lowers tenant utility bills, optimizes common-area energy use, and reduces maintenance and repair expenses, delivering data-driven efficiency with a fast return on investment and long-term operational efficiency.
Smart Security
Security remains one of the top priorities for renters. Tenants now expect more than traditional locks; they want full smart security ecosystems:
- 54% of renters now expect smart locks, thermostats, and security cameras to be included as standard features in modern rental units.
- 41% of renters list “feeling safer at home” as their primary reason for prioritizing smart-home tech.
The smart security market itself is substantial and growing. According to Global Market Insights, the U.S. smart home security camera market was valued at $7.76 billion in 2024, with projections to reach $15.46 billion by 2034. Additionally, North America holds over 37% of the U.S. smart home security market share.
Smart security products to consider for your rentals include:
- Smart doorbells, motion sensors, and cameras that send real-time alerts. These enable tenants to monitor and act fast on possible threats.
- Remote unlock features that allow tenants to grant temporary access to guests or service-providers. No more lost keys or after-hours disturbances.
- Monitored security systems. Studies indicate that these systems help reduce crime rates by 23%, improving overall resident safety and confidence.
With fewer incidents and increased tenant satisfaction, landlords can benefit from longer lease terms, reduced vacancy, and lower insurance premiums.
New Smart Technology to Consider in 2025
Matter-Credified Standard
The Matter standard, fully integrated into 2025 devices, is a game-changer for rentals. It ensures seamless compatibility across ecosystems like Apple Home, Google Home, and Amazon Alexa, allowing tenants to swap or add devices without headaches—expanding their intelligent device network.
AI-Powered Security
At the Consumer Electronics Show (CES) in 2025, several AI-driven security systems debuted with capabilities including:
- Facial recognition doorbells that distinguish packages, visitors, and threats and were demonstrated in systems like Alarm.com’s AI Deterrence (AID), which issues adaptive, real-time warnings based on visual identification.
- Smart cameras featuring virtual guards that simulate occupancy to deter intruders, as seen in Samsung’s AI Home Security, which transforms smart TVs into central security hubs for live monitoring and alerts.
- Health-focused air quality sensors, purifying environments and tracking indoor environmental conditions and pollution.
According to Parks Associates, 26% of home security owners want to leverage AI to improve video analytics. This goes to show just how impactful these new tools will be as more and more homeowners see the value in smart monitoring systems.
Portable Smart Displays & Hubs
New portable displays offer centralized, on-demand monitoring of multiple cameras, keys, and alerts while running on battery and tethered wirelessly to hubs. This enables tenants or property managers to keep tabs on security or climate from anywhere in the unit.
Robotics + User Presence Automation
Emerging smart home robots are introducing a new level of autonomy to rental units. These devices can navigate living spaces, monitor environmental conditions, and interact with other smart home systems in real time—adapting to a tenant’s daily routine based on presence and behavior.
Where to Start
Research from Rently shows a clear hierarchy of tenant appeal as more than half of renters expect smart locks, thermostats, and security cameras as standard features in modern rental units.
It’s important to start small. Smart locks offer immediate benefits such as remote access control, simplified tenant entry management, and reduced key-related hassles. Smart lighting, when integrated with sensors, delivers fast energy savings, improved ambiance, and a modern living experience.
These entry-level upgrades are impactful yet easy to deploy. According to Parks Associates, more than half of single-family renters show strong interest in at least one landlord-installed smart home device, and 60% say preinstalled smart home systems make a rental more appealing. That's a compelling justification for starting with locks and lighting.
Once these are in place, you can consider adding:
- Smart thermostats for HVAC control and energy optimization.
- Smart smoke/CO detectors to enhance safety and insurance compliance.
- Smart leak sensors to proactively prevent costly water damage.
The key is implementing manageable, tenant-facing upgrades first, and then gradually scaling up to full-building smart systems. This approach minimizes complexity and cost while delivering visible value and contributing to a sustainable future in your rental offerings.
Wrapping Up
Smart home technology has crossed the line from luxury to standard. Renters are not just hoping for it; they’re requiring it. In 2025, smart features like locks, thermostats, cameras, and lighting, supported by artificial intelligence and user-friendly interfaces, are now seen as standard amenities, especially among Millennials and Gen Z, which are the dominant rental demographics. This is more than just a generational preference; it’s a market reality backed by growing data analytics and clear return on investment.
Getting started doesn’t require a full-scale overhaul. Many landlords begin with simple, impactful installations like smart locks and lighting. These features alone can significantly boost appeal and functionality. Some landlords or property managers will decide to upgrade only a quarter of their units first. This provides the tenants the option to live with or without these features. On the other hand, there are landlords who want to get ahead of the curve and put these smart features into every unit.
The approach you should ultimately take depends on your market and the demographics of your tenants, but tapping into this market trend is a sure way to get your properties noticed by renters of 2025 and beyond.
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FAQs
What is a smart home?
A smart home uses internet-connected devices to enable remote management and monitoring of systems such as lighting, heating, security, and more, incorporating advanced data management for improved efficiency.
Why are smart homes important for renters?
Smart homes provide convenience, security, and cost savings, making them appealing to renters. Features like smart locks, thermostats, and security systems enhance tenant satisfaction and safety through improved user experiences.
Are renters willing to pay more for smart features?
Yes, many renters are willing to pay extra for homes equipped with smart technology, as it enhances their living experience and provides savings on utilities while supporting a sustainable future.
How do smart features benefit landlords?
Smart features streamline property management by reducing time and cost on maintenance, improving energy efficiency, and increasing tenant retention through enhanced living experiences with real-time data insights.
What are the cost benefits of smart technology?
Smart technology can lower utility bills, optimize energy use, and reduce maintenance expenses, offering a fast return on investment and long-term operational savings, contributing to environmental sustainability.
What security features do smart homes offer?
Smart homes offer advanced security options like smart locks, cameras, motion sensors, and monitored systems, which improve safety, reduce crime rates, and ensure secure user interfaces.
How should landlords incorporate smart technology?
Landlords should start with basic upgrades like smart locks and lighting before gradually scaling up to full smart systems, prioritizing tenant-facing features for maximum impact and seamless integration.
Is smart technology a trend or a necessity?
Smart technology is increasingly seen as a necessity rather than a luxury, driven by demand from Millennials and Gen Z renters expecting such features in modern rental units, enhancing user interfaces and data-driven management.
