Smart Home Upgrades for Rental Properties: Good ROI for Landlords

A Growing Trend That Boosts Rents and Reduces Vacancies

According to a Zillow Consumer Housing Trends Report, 75% of renters say smart home features make a rental more appealing, and many are willing to pay more per month for homes with tech-forward features.

For landlords—especially new investors, out-of-state owners, and busy portfolio managers—smart home upgrades for rental properties offer one of the highest ROI opportunities in today’s rental market.

By improving convenience, security, and energy efficiency, landlords can charge higher rents, reduce tenant turnover, and streamline operations—all without major renovation costs.

Why Smart Home Upgrades Matter for Landlords

Higher Rent Potential

Data from Rent.com shows that tenants are willing to pay $20–$50 more per month for homes with upgraded smart features, especially smart security and smart HVAC controls.

Lower Vacancy Rates

Smart features differentiate your rental and help it stand out in competitive markets, reducing days on market.

Fewer Maintenance Calls

Remote monitoring features allow landlords to troubleshoot or manage issues without needing to visit the property—or pay vendors unnecessarily.

Top Smart Home Upgrades With the Best ROI

1. Smart Locks — A High-Impact, Low-Cost Upgrade

Estimated Cost: $80–$200

Potential Rent Premium: $15–$40/month

Why It Works: Smart locks eliminate lost-key issues and allow landlords to reset codes between tenants instantly—no lock changes, no locksmith fees.

A Chicago landlord with four single-family rentals reported saving $230 per turnover by eliminating physical rekeying.

This is best for Out-of-state landlords, multi-unit buildings, short-term rentals.

2. Smart Thermostats — Cut Utility Costs and Boost Tenant Comfort

Estimated Cost: $130–$250

Potential Rent Premium: $20–$40/month

Savings Impact: Up to 10–15% reduction in heating/cooling costs, according to ENERGY STAR.

A smart thermostat like Nest or Ecobee allows tenants to set schedules while landlords can remotely monitor HVAC use (especially beneficial for utilities-included rentals).

Why It Has Great ROI:

• Protects HVAC from misuse

• Reduces utility bills

• Increases energy efficiency, a top tenant priority

  
  

3. Smart Security Cameras & Doorbells — Safer Unit, Higher Demand

Estimated Cost: $100–$250 per device

Many tenants prefer rentals that come equipped with smart video doorbells or exterior cameras, especially in urban or high-traffic areas.

Tenant Benefits:

• Better package security

• Increased peace of mind

• 24/7 visibility of entry areas

  
  

Landlord Benefits:

• Reduces liability

• Helps deter property damage

• Monitors common areas or vacant units

  
  

Ensure compliance with local privacy laws—never install cameras indoors.

4. Smart Lighting Systems — Great for Curb Appeal and Maintenance

Smart lighting offers automated on/off scheduling, which is helpful for both single-family rentals and multi-unit hallways.

ROI Benefits:

• Enhances security at night

• Saves on electricity (especially in common areas)

• Impresses tenants during showings

  
  

5. Leak Detection Sensors — The Most Underrated High-ROI Upgrade

Estimated Cost: $30–$60 per sensor

A $40 leak sensor can save you thousands in water damage, mold remediation, or insurance claims.

Best Spots to Install:

• Under sinks

• Near water heaters

• Beside washing machines

• In basements or crawl spaces

  
  

Many landlords call these the “insurance policy tech upgrade.”

6. Smart Smoke & CO Detectors — Safer Properties, Faster Alerts

Smart detectors instantly alert both tenants and landlords if smoke or carbon monoxide is detected.

Why Landlords Love Them:

• Easy remote monitoring

• Fewer false alarm issues

• Immediate response time during emergencies

  
  

7. Whole-Property Smart Hubs — Optional but Powerful

For tech-forward rentals or higher-end markets, smart hubs like Google Home or Amazon Echo can tie all devices together.

Not every rental needs this, but for urban luxury units, it can justify a significant rent premium.

Which Smart Home Upgrades Offer the Best ROI?

Based on cost vs. tenant demand, here’s the ROI ranking:

1. Smart Locks (Best overall ROI)

2. Smart Thermostats

3. Leak Detection Sensors

4. Smart Security Cameras/Doorbells

5. Smart Smoke/CO Detectors

6. Smart Lighting

7. Smart Hubs (best for luxury units)

   
   

How Landlords Can Implement Smart Home Upgrades Cost-Effectively

Bundle Upgrades During Turnovers

Save labor costs by installing multiple devices at once.

Choose Devices That Don’t Require Subscription Fees

Tenants prefer simplicity—avoid ongoing monthly charges unless necessary.

Create a “Smart Home Amenity Package”

Some landlords market these as a bundled feature, allowing a premium of $40–$75/month.

Standardize Across All Units

This reduces complexity for landlords managing multiple properties.

Real-World Case Study: 3-Unit Rental in Minneapolis

A landlord installed:✔ Smart lock✔ Smart thermostat✔ Smart water sensors

Total Cost: $325

Rent Increase: $50/month

Annual ROI: ~185%

Tenant turnover dropped, HVAC use stabilized, and the landlord saved money on unnecessary maintenance trips.

Conclusion: Smart Home Upgrades Are a High-ROI Strategy for Modern Landlords

Smart home upgrades for rental properties are no longer "nice to have"—they’re one of the most effective ways to increase rent, attract high-quality tenants, and protect your asset with minimal investment.

If you're a landlord looking for predictable ROI with low upfront costs, these upgrades should be at the top of your list.