1. Smart home device
Despite marketing advantages, better tenant satisfaction, and increased profits, the value proposition for most smart home devices has only recently become more compelling as the price point for these devices has come down considerably.
In fact, demand for smart home devices is growing so fast that experts have coined the term IoRE – or internet of real estate – to describe the booming market in smart home devices. The smart home device market has doubled in size from about $44 billion to $91 billion over recent years and is expected to hit $158 billion by 2024, according to data from Precise Security.
While tenants are likely to value smart lights and virtual personal assistants (VPAs), installing smart home products in your rental property can also be an easy and cost-effective way to protect your property. The acronym “SMART” comes from “Self-monitoring, Analysis, and Reporting Technology.” Some insurance companies, like SES Risk Solutions, value this increased real-time awareness and may even offer a premium discount for landlords that have invested in installing such devices.
What to look for in a smart home device
Evaluate the specific needs of your property and investment strategy when considering smart home technology options. The two we have found to provide the most value are:
Flood or moisture detectors: Renters may not place a high degree of value on these devices, but for a small price, moisture sensors can potentially save landlords considerable money through water damage prevention. Easy to install and affordable, these detectors can alert you to problems like slow leaks that may otherwise go unnoticed before they turn into major issues. They can also quickly inform you of big problems like burst pipes that could do major damage quickly.
Smoke and carbon monoxide (CO) detectors: Smart smoke alarms and carbon monoxide detectors take safety a step further than traditional models. Rather than just sounding an alarm, these smart versions can also alert you and/or your renters if there’s a problem via an app.
2. Robust renter’s insurance requirement
Another effective risk management strategy for real estate investors is to offset their risk by requiring their residents to procure coverage that would protect their rental property from tenant-induced damage (accidental or otherwise).
Many investors/property managers require their residents to show proof of renter’s insurance to fulfill the lease requirements. However, nearly one-third of renter’s insurance policies are cancelled by the tenant mid-lease.
To combat this challenge, we encourage investors and property managers to require that the resident list them on the policy as an “interested party” so that they are notified in the event of a lapse in coverage.
About SES Risk Solutions
SES Risk Solutions is a leading provider of insurance services for large portfolios of real estate. SES currently services over 50,000 properties for fiduciaries, owners, and managers through master policies on a nationwide basis. SES has a 30-year history of offering competitive and comprehensive insurance products complemented by unparalleled service and technology platforms for properties (residential, commercial, farm, and land) held in trust by financial institutions and real estate investors.
About Shaun Shenouda
Shaun Shenouda is Chief Operating Officer, Programs Executive of SES Risk Solutions. He joined SES in 2014 as SVP of Operations and Technology, where he is primarily focused on delivering customer value through innovation and service excellence. Shaun has 20 years of experience offering master-policy Property & Casualty insurance, service, and technology to financial institutions. Prior to joining SES, Shaun held the position of Senior Vice President of Integrated Solutions and Analytics at QBE, where he was focused on business transformation, customer experience optimization, and M&A integration initiatives. Shaun has a degree in Management Information Systems and received his MBA from Pepperdine’s Graziadio School of Business and Management.
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Shaun Shenouda is not an employee of Equity Trust Company. Opinions or ideas expressed are not necessarily those of Equity Trust Company nor do they reflect their views or endorsement. These materials are for informational purposes only. Equity Trust Company is a directed custodian. Equity Trust Company, and their affiliates, representatives and officers do not provide legal or tax advice. Investing involves risk, including possible loss of principal. Whenever making an investment decision, please consult with your tax attorney or financial professional.
Equity Trust Company’s arrangement with this third party provider is solely for the convenience of clients of Equity Trust Company. Equity Trust Company makes no recommendation or representations as to this third party provider, any insurance products, or the insurance needs generally of any client or any client’s account. Clients are in no way obligated to purchase insurance products generally or to purchase insurance products from this third party provider or through Equity Trust Company’s arrangement with this third party provider. Clients are free to purchase or not purchase insurance products for client or client’s account from any insurance company or broker as they deem appropriate. No client may rely on any statement made by Equity Trust Company or any of its officers, directors, employees, or agents for any decisions regarding the purchase of insurance products. Clients should consult with their financial and legal advisors before purchasing any insurance product for client or client’s account.