Is Investing in Smart Home Technology Worth It?

Kim Marie Pampanga-Baltazar  |  October 1, 2023

Is Investing in Smart Home Technology Worth It?

The adoption of smart home technology, which uses of the Internet of Things (IoT) within the home, has surged for homeowners, investors, and property management companies. From enhancing home security to boosting energy efficiency, these devices offer a plethora of benefits. Yet, homeowners often debate with a fundamental question: Does the investment truly pay off?


Smart Home Devices

Types of smart home devices can vary between temporary and permanent installations. For the purpose of this article, we will focus on permanently fixed smart home devices that are transferred with the ownership of a property. 

Smart Security Systems

The U.S. sees about 2.5 million home burglaries annually. To combat this, smart security tools like cameras and locks have gained popularity. Not only do they bolster home security, but they can also lead to reductions in home insurance premiums. 

Smart Thermostats

As utility costs increase and climate change increasingly impacts the world, energy management is vital in modern homes. While traditional thermostats offer limited control, their smarter counterparts, with adaptive capabilities, lead to significant energy savings. They adjust heating and cooling based on learned patterns, providing homeowners with efficient energy use. Smart Thermostats can provide value to homes by not only adding resale value but reducing regular utility expenses. 

Smart Appliances

Among all smart devices, appliances stand out for their ROI. According to House Digest, smart appliances tend to yield an ROI approximately 11% higher than conventional ones. These devices, encompassing everything from refrigerators to ovens, are designed for energy efficiency and convenience. 

Smart Lighting

Smart LED lights offer more than just aesthetic appeal. Their energy-conscious design, coupled with remote operability, translates to tangible savings. Furthermore, these lights last significantly longer than traditional bulbs, making them a long term cost-effective choice.


Home Valuation and Smart Devices

The integration of smart devices does affect a home's resale value. While determining an exact value increase is tricky due to factors like location, size, and appraisal methods, a trend is evident. Home automation costs range from $2,000 to $6,000 on average, with upscale enhancements surpassing $10,000. However, homes with smart integrations, when marketed correctly, can fetch prices 3% to 5% higher than those without. This increase is attributed to buyers' willingness to pay a premium to avoid future installation hassles. For instance, a $400,000 property could see its value rise by $12,000 to $20,000 post smart tech integrations.


Smart home technology, while an upfront investment, have immediate benefits, from energy savings and enhanced security to potential insurance rate reductions. Moreover, when selling, homeowners can expect a ROI, especially with smart appliances. Potential buyers, aware of the convenience and future savings associated with such technology, often prefer properties equipped with these devices.

One aspect of smart home technology to keep in mind is that the rapid evolution of technology may render some devices obsolete sooner than anticipated. However, the immediate benefits and potential for increased property value make a compelling case for homeowners to consider integrating smart home technology.


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