People are often surprised to learn that home values can be increased just by installing a few smart appliances and a few simple home automation systems. This fact was determined by Red Ventures, LLC through a comprehensive study that they published in 2018.
The study compared the sale prices of homes with and without smart appliances and automation, and came to the following conclusions:
According to the study, homes without automation have the potential to appreciate in value, compared to those with automation, as follows:
- 38% appreciation in a three-year window
- 24% appreciation in a five-year window
- 13% appreciation in a seven-year window
- 9% appreciation in an eight-year window
However, in the first year after installing smart appliances and automation, homes with these features typically achieve a maximum appreciation of:
After this initial spike in value, the study found that homes with automation typically achieve a lower annual appreciation rate compared to homes without automation, as follows:
- 2% to 4% appreciation in three years
- 1% to 2% appreciation in five years
- 0% to 1% appreciation in seven years
- 0% to 1% appreciation in eight years
This finding makes sense because, as we mentioned above, homes with automation often achieve their maximum value in the first year after installation. Hence, their appreciation rate is likely to drop off significantly in later years.
The study also analyzed the appreciation rate of homes with and without automation in various regions of the country, and found that it varies from area to area. Furthermore, depending on the area, the appreciation rate of homes with automation can either stay the same or even increase. This suggests that, if you live in an area where the appreciation rate of homes without automation is low, you may want to consider investing in home automation, as it could potentially increase the value of your home.
To find the appreciation rate of homes without automation, the study looked into the following four main categories:
- Cost To Buy
- Cost To Maintain
Homes without automation, on average, cost about $65,000 to buy and maintain. This makes them cheaper to buy but also more expensive to maintain compared to homes with automation. However, depending on the area, these numbers can vary widely. Homes without automation in some areas of the country cost as much as $125,000 to buy and maintain, while in other areas they can cost as little as $35,000.
One of the largest determining factors of whether or not you will appreciate your home is how much it will cost you to maintain. Homes with automation usually require more work, and therefore are more likely to appreciate in value. This is because they tend to be newer builds and have more advanced features, which makes them more expensive to maintain.
To maintain a home with automation, you will need to regularly service and upgrade the system, as new versions become available, and appliances and parts wear out over time. For instance, you will need to replace air filters, wash the oven, and clean the refrigerator and freezer periodically.
To determine the cost to buy homes with automation, the study looked into two categories:
- Maintenance Cost
Overall, the study found that homes with automation cost about $8,000 to $13,000 more to buy than homes without automation. This cost comes from two main sources:
- The initial cost of the equipment needed to install it
- The cost of regular service and maintenance
However, this number can vary widely depending on the area. For example, in some areas of the country homes with automation can cost $20,000 less to buy than those without it. This is because homes with automation are built with material prefabrication and modular construction, which made them cheaper to build.
When it comes to using equipment, homes with automation use a lot more than those without it. This is because the appliances and fixtures that they use are usually more advanced and therefore more expensive to buy. This is also why the cost of maintaining a home with automation is usually higher. However, it’s important to keep in mind that just because they require more equipment, it doesn’t mean that they are more expensive to maintain.
To determine if homes with automation use more equipment, the study looked into four categories:
- Repairs And Maintenance
On average, homes with automation use more equipment than those without it in all four categories. This was particularly true in the first year after installation. However, in the third year after installation, homes with automation started using less equipment than those without it, and maintained this trend throughout the remainder of the study.
It’s important to note that just because homes with automation are more expensive to buy and maintain that doesn’t mean that they are worse than homes without automation. This is because there are many different factors that can contribute to the overall cost of ownership. To maintain a home with automation, you need to consider all of these factors and choose a good contractor who can help you figure out how to keep your costs down while still maintaining the luxury that you want for your home.
Additionally, people who buy homes with automation usually do so because they want the luxury that comes with having all of the appliances and fittings that they could want or need. This was the case for 94% of the study’s respondents, who cited this as the main reason that they chose a home with automation.
When it comes to being luxurious, homes with automation are usually at the top of the list, particularly in the first year after installation. In fact, 94% of the respondents cited this as the main reason that they chose a home with automation.
Additionally, these homes usually feature a lot of natural light, are located in desirable areas, and have plenty of space for everyone, making them feel luxurious. Even the layout and design of the home can contribute to making it feel luxurious. For example, a dining area that opens up to a great room with a fireplace can make for a luxurious dining experience, as can a deck that leads to a large outdoor space.
However, after the first year of ownership, the luxury quotient of homes with automation drops significantly. Depending on the cost of upkeep and the size of the area, this can still be a very luxurious home, but not having all of the amenities that you would expect from newer builds.
In conclusion, homes with automation can increase your home’s value, particularly in the first year after installation, due to their luxurious nature. However, this luxury decreases in the third year and beyond, due to the high cost of maintaining this level of luxury. As a result, you may want to consider investing in home automation, as it could potentially increase the value of your home.