Can Smart Home Automation Increase Home Values?

  AUTHOR: Joshua Martin
 UPDATED: January 15, 2024

You’ve probably landed on this blog post because you’re considering purchasing some home automation equipment. And you might be a little hesitant about taking that leap.

Maybe you're planning on moving soon. Or, maybe you’re the type that won’t buy anything unless you know you’ll get a positive return on your investment. Not a bad mindset to have when it comes to managing your money.

With smart home automation, things can get a little pricey depending on the devices you choose to purchase. The question I'm going to address today should be right up your ally.

Can smart home automation increase home values? Yes. Smart home systems are now being factored into appraisals for home sales. Having devices such as smart thermostats, smart smoke detectors, and home security systems have not only proven to increase a home’s value, but may also help sell the home faster.

Now, this doesn’t necessarily mean you should jump the gun and start spending your life savings on smart devices. Let’s take a little time to look at this in more detail.

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How Much Does Home Automation Increase Home Values?

Now obviously, I’m not a real estate agent and I’m not going to sell your home for you.

It's also impossible to give an exact percentage of how much a home automation system can increase a home’s value. I just don’t believe an exact number exists.

When you search for data backing this topic you can get varying estimates. Some claim that automation systems can raise the value of your home by up to 5%. Others report that it can be up to 35%.

Smart homes can make your life easier and save you money. And potential home buyers may get excited seeing a smart thermostat installed in their future home.

This may result in some additional cash in your pocket when you sell your home. Whether this is a result of a speedier sale or because of an increase in price is hard to prove.

So, with that disclaimer out of the way, let's look at the some of the reasons why smart home devices can increase a home's value.

The Demand for Smart Home Devices Is Increasing

One thing is clear. The demand has arrived for smart home automation and it’s not going anywhere soon. A potential home buyer is either going to consider installing a home automation system or be very happy that one is already included in the purchase.

Strategic Analytics reports that in the year 2020, global consumer spending on smart home systems and services will reach $158 Billion. That is up from 2016 when it was at $76 Billion.

And, according to a 2018 survey by Coldwell Banker, potential homebuyers show interest in purchasing a home with smart devices already installed. Of those surveyed, 77% would want a smart thermostat pre-installed, 75% would want a smart fire detector pre-installed, 66% would want a smart camera pre-installed, and 63% would want a smart lighting system pre-installed.

Having smart devices already connected and ready to go while selling a home is never going to deter a potential buyer. I know this from personal experience and I will share that story with you at the end of this article.

Smart Homes Increase Safety

We live in a world where violence is in the news every day. More tragedies are happening such as the recent school shootings or the country music festival shooting in Las Vegas.

Seeing these events occur more and more often tends to do something to us psychologically. We want homes where we feel safe and secure.

Because of advancements in technology, we’re spending more money on smart home security systems and devices. We want the peace of mind that our families are safe and our homes our secure.

A smart home has huge appeal to potential home buyers and it’s a key reason why home automation helps increase value and shortens the sales cycle. We want safety and security and smart home devices can provide just that.

Smart Homes Reduce Stress and Anxiety

We all know people who don’t trust their neighbors and would prefer to live in a fortified bunker surrounded by a moat. With all the tragedies being shown on the nightly news, who can blame them?

Smart homes with automation and security devices already in place are very attractive to these types of buyers. Once the real estate agent pulls up the security camera views of the entryway, driveway, front porch, and back porch, you can feel the sense of relief in the potential buyer’s mind.

Smart Homes Market Well

Smart home technology just markets well. No further explanation needed. If you were comparing two homes for the same price with every other factor being the same, except one home was stocked full of smart home goodies, which one are you going to take?

Smart Homes Make Life More Convenient

It’s no secret, we are living in an “instant gratification” society. We want it all, and we want it right now. Almost every task imaginable can be accomplished with a tap on a smartphone.

Want to order a pizza? There’s an app for that. Manage your finances? There’s an app for that. Change careers? Get the app. Dinner date? Swipe right.

And guess what? Want to control your home’s temperature or open your garage door from your smartphone? Even when your miles away? With smart home technology, you can do that, too.

Smart home technology allows us to control devices and perform tasks all within the palm of our hand, right on our smartphone. Thermostat controls, making sure doors are locked, even washers and dryers are now capable of being controlled from an app on a smartphone.

Buying a home that is already set up with smart home automation is a definite plus for those who want a leisurely lifestyle. The best part of the deal is that all of the work is already done for them. They can just sit back and enjoy the benefits.

Smart Homes Can Be Upgraded with Ease

This topic doesn’t necessarily have to do with getting inside the buyer’s head. This has more to do with the ability to upgrade devices, remove devices, or take them with you in the future.

Potential buyers like having this option. Think of it this way. Have you ever met a person that, no matter how awesome something is, will complain and drag that item or situation down? Or how about that person that thinks they can do everything better?

Shockingly enough, this happens a lot with smart homes. A real estate agent may inform potential buyers that a doorbell camera is installed on a home and they may complain that the face plate doesn’t match the brick on the exterior.

Yes, these people do exist. Luckily, doorbell camera manufacturers have created the ability to easily swap faceplates. The same is true for other smart devices in a home. Smart devices can be easily upgraded or swapped in or out of the current system.

A potential buyer can feel comfortable knowing they can make customizations and upgrades to an existing system with ease.

Smart Homes Are Fun to Show Off

As much as we hate to admit it, we all like to flaunt that brand new “thing” we just purchased. Whether it’s a new smartphone, a new car, or a new pair of shoes. It’s kind of fun to show off what we’ve recently acquired to our family and friends.

When purchasing a home, there is a lot more psychology that goes into the transaction than one may think.

A potential buyer may raise her bid or even make an offer on the spot if she begins picturing the house warming party and showing off all the fancy gadgets in her new home. Imagine welcoming guests that arrive at the front door, by speaking through the two-way speaker in the doorbell camera, while sitting in the backyard on a smartphone.

We all want to have the best and this is a key component of how smart homes help drive up real estate prices.

Smart Homes Create More Privacy

Everyone Loves Privacy, right?

I know, I know. We post every single moment that happens to us on Facebook and Instagram, so you could argue that nobody likes privacy.

But I’m talking about the type of privacy you get when you come home from a long day’s work and lock the door behind you from all the worries and troubles in the world.

Ah, just soak in that peace and quiet.

And just when you plop down on the couch to relax and watch some Netflix, the doorbell rings.

Is it your friendly neighbor who just stopped by to say, “Hello.”? Is it Grandma coming over for a surprise visit? Or is it that pesky salesman who’s already been around twice this week?

Does anyone like answering the door for solicitors? If you answered, “I do!”, you’re either lying or didn’t read the question carefully.

I recently got trapped into an hour-long conversation with a Kirby Vacuum door-to-door salesman because I haven’t installed the doorbell camera in my new home yet. If I could have just opened the app on my phone to see it was a salesman at my door, I would’ve never left the couch!

It was terrible and no matter what I said, I couldn’t get him off the front porch. He was like a fly at a picnic, just wouldn’t go away.

Some people love the ability to stay hidden behind their walls, in the comfort of their own home. That’s just how it goes, and some people are willing to pay a premium to have that benefit.

Selling a Home with Home Automation

In July of 2018, I put my house on the market. I had also taken the time to install a home automation and security system while living there.

I lived in a nice neighborhood, but my backyard was situated near a pond which attracted trespassers who liked to go fishing in it. In addition, I lived very close to State Farm Insurance headquarters. This by itself isn’t a bad thing, but it does create heavy traffic, almost like living in the heart of a city like Chicago.

I had the following smart devices installed in my home:

• 6 Camera Security System


• Smart Garage Door Opener


• Front Doorbell Camera


• Motion Sensing and Window Glass Breaking Sensors


• Smart Door Locks Protecting My Basement


• Smart Lighting on the Main Level and in the Master Bedroom


• Google Home as My Main Hub

I was also lucky enough to have one of my best friends as my real estate agent. Now, keep in mind my home was very nice. The problem was, I was surrounded by other homes that were also very nice. We had a few nibbles the first week, but no takers.

The following week, I had a potential buyer fly in from Dallas, Texas. My home was in Illinois. He was relocating and needed to pull the trigger fast. This can be a good and bad thing. You can sell fast, but you better get their attention and the down payment ASAP.

The potential buyer came in and viewed the home, didn’t seem all that impressed, and was getting ready to leave.

At this point, my real estate agent hadn’t mentioned anything at all about the smart home features installed in my home. Much less, hadn’t compared any these features or the lack thereof in the neighboring homes. You see, the potential buyer knew he wanted to live in my neighborhood, but hadn’t decided on a home just yet.

While exiting the house, I kid you not, the potential buyer noticed the odd look of the front doorbell camera. For people who haven’t seen one, it almost seems futuristic when you see one for the first time. This ended up sparking a conversation between him and my agent, which led the man back into the home.

My real estate agent calls me and says, “Hey, I don’t know anything about smart homes and this guy has some questions”. Of course, I answer the questions and with the price of the home being just above market value, the guy is blown away by the additional features and safety he will be afforded. I wish I could give you the fairy tale ending that he bought it on the spot, but he didn’t.

He did, however, make an offer just 12 hours later and ultimately purchased the home.

Can I prove it was because of the smart home devices I installed? No, like I said it was a very nice house in a nice neighborhood, but remember real estate sales is part mind game.

Do I believe with 100% certainty that the doorbell camera conversation got him into a state of mind where he temporarily pictured the potential of owning the home? You bet, and I’m sticking to that story. I guess we will never know for sure, but that is what I truly believe.

Home Automation Devices Add Value and Decrease the Length of the Sales Cycle

With varying data out there, it can be hard to believe that having an automation system installed in your home will increase its value and help it get sold quickly. But in my experience, I can definitely say, it doesn’t hurt.

It’s interesting to note, that even with conflicting numbers, none of the data show a negative effect from having an automation system in a home that’s up for sale. All signs show it has a positive effect.

If you’re considering installing a home automation system, I’m a firm believer that you will see the ROI at some point in the future. You may be in the red at first, but eventually, it will play out in your favor.

Whether you take the system with you, sell the home faster, or just save on utility bills, the chances of breaking even or entering positive territory are very high.

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