Are smart apartments the future of Canada's rental market?

As technology continues to advance, so does the rental market in Canada to answer the ever-increasing needs of a digitally enabled and comfort-seeking society. Smart apartments have been an emerging trend in the dynamic world of real estate. They offer convenience, energy efficiency, and enhanced security.

At Royal York Property Management, we acknowledge the ever-growing trend of smart apartments and their potential to reshape rental properties' landscapes. Royal York Property Management combines great service and expertise to satisfy the needs of landlords, investors, and tenants across the country, making it one of the major property management companies in Ontario.

We deal with a vast portfolio of more than 22,000 properties worth over $10.1 billion and grow trust in the real estate area daily. This blog looks at the concept of smart apartments, their benefits and challenges, and why they might be the future of Canada's rental market.

What are smart apartments?    

Smart apartments combine advanced technologies to enhance the living experience. These range from smart thermostats that ensure exact temperature control, smart lighting systems dependent on the time of day and occupation, state-of-the-art security systems with smart locks and cameras, and voice-activated assistants like Amazon Alexa and Google Assistant. The smart home technologies are aimed at giving the occupants greater convenience, lower utility bills, less environmental impact, greater efficiency, and greater security.

Market Outlook for Smart Apartments in Canada  

Canada’s rental and housing market is quickly catching up to these changes, just like with any urban living. With most of the population being young professionals and tech-savvy tenants, the demand for a smart apartment is bound to increase. We are looking forward to a new string of AI-powered tools in 2024 and beyond, especially for tenants. In the very near future, it will be the norm for tenants to use AI in their apartment searches to sift, compare, and coordinate actions, making apartment searches more effective.

Smart apartments are particularly a great attraction for millennials and tenants of Generation Z, who prefer technological convenience. This shift in demographics is why landlords are trying to improve their properties by including smart features to attract and retain these tenants. Builders are also adding smart technologies to their new developments.

Benefits of Smart Apartments for Tenants  

1. Convenience and Comfort

Smart apartments afford us unparalleled convenience in the automation of the mundane activities of life. Through mobile applications, tenants are able to remotely control lighting, heating, and security systems. Just imagine, adjusting the temperature in your house on the way home from work or switching off the lights in your bed without having to get out of bed. All of these amenities make for a great life in general, since it's much more convenient.

2. Energy Efficiency and Cost Savings  

Energy efficiency is one of the most outstanding benefits of smart apartments. Smart thermostats learn the schedules of the tenants, and in line with that, they regulate the heating and cooling processes, ensuring lesser energy use. The smart lighting system inside these apartments goes off when there is nobody inside the room. These technologies help to contribute to a greener environment by saving utility bills, thereby saving some money for the tenant.

3. Enhanced Security  

Security is one of the first things most tenants would look out for in a place to live, and smart apartments deliver well on this. With smart locks, tenants will be able to lock and unlock doors from a distance, provide access codes for the temporary access of guests, and get alerts if someone tries to enter. Intelligent security cameras implement real-time surveillance with alerts, ensuring that tenants are at peace while at home or away from home.

Advantages for Landlords  

1. Increased Property Value  

This can quickly add value to rental properties through investment in smart technologies. The apartments that are smarted in are looked upon as being modern and in demand, so the landlord can increase rentals. The initial investment in smart technology can be offset by the increased rental income and the long-term value added to the property.

2. Attracting and Retaining Tenants    

Smart apartments appeal to a wide variety of tenants because, for the most part, they are tech-savvy and value convenience. By including smart features, landlords can attract high-quality tenants and improve the possibility of holding on to those tenants for longer periods of time. Happy tenants are more likely to renew leases, helping to reduce vacancy rates and turnover costs.

3. Remote Property Management

For landlords, these smart technologies mean remote property management. Smart devices alert landlords to maintenance issues so they may take timely measures to avoid problems. The proactive approach to managing the property not only saves its condition but also enhances tenant satisfaction.

Challenges and Considerations 

1. Initial Investment Costs

One of the primary barriers to smart apartments is upfront costs. Smart appliances could be expensive, and landlords weigh their costs against the probable benefits. Still, most will decide that the long-term advantages of higher rents and a reduction in maintenance costs outweigh the investment.

2. Privacy Concerns  

The biggest concerns in terms of smart technology for tenants have to do with privacy. Landlords have an obligation to ensure smart devices are secure and data from tenants is protected. Transparency in the data collected and how such data are used is of utmost importance in maintaining tenants' trust.

3. Maintenance and Upkeep  

Smart devices demand periodic updates and maintenance to work seamlessly. Landlords must keep updated with technological developments and ensure that their devices are up-to-date. From here, these will also need to be managed, and such ongoing requirements are easy to have with reliable service providers.

Despite these challenges, one looks to the bright side, where many Canadian landlords and property management companies have had success with incorporating smart technologies into their rental properties. For example, at Royal York Property Management, we have reported a 20% increase in tenant satisfaction once we advised the landlord to perform unit upgrades with smart thermostats and security systems. Another client (a landlord) we have in Ottawa saw major reductions in energy costs and a boost in the number of rental inquiries after installing smart lighting and automated blinds.