Rapid advancements in technology mean proptech is becoming a more mainstream offering, and tenants are increasingly happy to pay for added tech extras in rental homes.
The concept of ‘smart homes’ has been around for several years now, with a range of technology now available to automate the running of your home for ease of use. This can allow you to remotely control things like your heating and lighting, among other things, through your phone.
However, in the rental market, take-up for smart home technology has been lower, as it is seen as more of a luxury than a necessity, and of course comes at an additional cost. But new research has revealed just how important proptech could be to tenants, making it something to consider for property investors.
In the buy-to-let market, proptech can help you run your rental property, with apps available to keep on top of managing your property, from communicating with tenants to staying up to date with things like gas safety checks and rental renewals.
Proptech can not only make running a property investment easier, but a report by Capterra report shows, can also make your rental property more enticing to prospective tenants.
Proptech can enhance a rental home
In a survey of 4,800 global tenants, Capterra found that almost three quarters (73%) of renters either somewhat or strongly agree that a property that features advanced technology could significantly influence their decision to sign up to a rental property.
Further to this, when looking at UK tenants specifically, 73% of tenants that don’t have access to digital tools and proptech in their rental properties would like them.
Home security systems were the top proptech solution that UK tenants said would justify paying higher rental prices, with almost a third (30%) choosing this option. This was followed by smart appliances in a rental home, such as smart refrigerators, washers or dryers, chosen by 28% as an addition that they would pay more for.
High-speed connectivity was important for 25% of UK tenants, while 24% said they would pay higher rent for a home that had smart home automation systems. This could include smart heating or responsive lighting, for example.
Landlords should look at what they offer
Often, newer properties, particularly those within the most modern developments, come with some form of proptech offering, with many already classed as “smart homes”. These can naturally command higher rents, particularly as they tend to be among the most energy efficient homes, too, and therefore increasingly desirable.
But in Capterra’s survey, as many as 44% of UK landlords do not offer any proptech or digital tools in their rental properties, which the company highlights as a “missed opportunity to remain competitive in the housing market”.
Meeting tenant demands and justifying rising rents should be at the forefront of property investors’ and landlords’ minds at the moment, particularly as prices in the private rented sector continue to soar.
According to the survey, 43% of UK tenants are dissatisfied with the amount they pay for their current rental property, while 80% said rising rents in their area have significantly impacted their standard of living. Therefore, as Capterra notes, “introducing technology features in a property could be an attractive selling point”.
What could landlords offer?
As mentioned above, things like home security systems, smart home automation and high-speed connectivity could all boost the appeal of rental homes to tenants.
Looking at other potential shortfalls within the UK rental market, Capterra found that only around a third (34%) of UK tenants have access to online document portals, while only 19% are signed up to online payment portals for their rental properties, despite this technology being widely available to landlords and investors.
Similarly, only 10% of UK tenants say they use dedicated communication platforms to converse with their landlord of agent; only 7% live in homes with smart locks; and 7% have remote security apps, despite there being a demand for these kinds of proptech offerings.
Eduardo Garcia Rodriguez, analyst at Capterra, said: “Offering tech upgrades in rental properties can help to boost tenant satisfaction by improving security, convenience and efficiency. However, as rental costs rise, these features should no longer just be perceived as nice-to-haves but rather, key influencing factors in a tenant’s rental decision.”
