Nov 13

What is Smart Home Automation?

Today, most people think of smart home automation as a hub that controls your heating, cooling, lights, security, access (via electronic keypads on all doors including garage doors), and links to your automated home blinds, your appliances and kitchen, all via wi-fi. 

This is all well and good, but the right question to ask, in my view, is what makes economic sense?

If you are a wealthy person, having the ability to close your blinds from your coach so you can watch the latest episode of the Good Wife on Netflix without any interference from the sun’s rays is perfectly understandable, but isn’t exactly what I would call a necessity.

Lately, we’ve been adding tech packages to homes and apartments–services include internet, wi-fi, basic cable, Netflix, Spotify, and magic jack phones. We install large screen TVs and Sonos speakers as well. This is a profit center for homeowners and property investors alike. 

Whether you own your own home or you own a rental property today (or preferably both), you should ask yourself the question: what is your HABU, highest and best use?

At my place, we have a house for my wife and I, a sideyard apartment for our tenant, a storage shed and a garage office (for moi). We would like to add a (now legal in Ottawa) coach house in our backyard and possibly some maker space.

All of these users/renters/tenants/owners have access to our tech package (or will have) that costs us about $140 a month. If each user pays $115 for their shared tech package, we could end up with four or five payments amounting to $460 to $575 monthly, a decent ROI on a cost base of $140. 

In fact, this is probably the single most profitable new revenue stream to appear in residential or commercial real estate since the invention 30 years ago of the triple net (commercial) lease, which shifted the burden of paying for operating costs, administration, property management, repairs and maintenance, utilities, and property taxes to tenants from landlords. 

From the point of view of our

residential tenants, the tech package is a good deal–it would cost them at least the same to buy it themselves from one of the main service providers; it takes a lot of time to set up an account, install it and make it work too; finally, if the tenant is unknown to the service provider (ie, a first time customer) they may have to give the provider a hefty security deposit. 

Imagine the intangible benefit as well for a tenant who has internet, wi-fi and all the other services working from the moment s/he starts her/his occupancy? If you have a home-based business, losing two or three weeks productivity while you hassle about getting technology to work is quite a concern. Lost revenue can be in the thousands of dollars.

So I sketched a note this morning of what I think real home automation looks like today–and I divided it up between the essential and simply the nice-to-have:


Basically, if you start a new industry like home automation (or, for that matter, greening your property or anything else) via something that makes a compelling economic case (like tech packages do), then you will eventually find a way to add all the bells and whistles (like automated blinds) later on. If you start with the fluff, you’ll end up like 3D TV, which died of a sudden heart attack when consumers rejected both the experience and cost.

@ profbruce @ quantum_entity

postscript: BTW, I’m betting that VR TV (especially of live events like major league sports) will succeed where 3D TV failed.

postscript 2: you may also want to read, Green for Real,

postscript 3: more on smart home automation–

There is a
lot of talk about smart home automation. But a lot of it is crap, and some of
it is very expensive crap.

Here’re are
a few things that make sense to me (in addition to tech packages/multi media
packages and IT support)—

  1. solar panels
  2. solar hot water (which believe it or not has a decent ROI even in cold weather, northern shelf cities like Ottawa) for washing, hot water baseboards and in-floor radiant heating
  1. smart t-stats (controlled from your phone or your tenant’s phone or both)

  1. security systems/monitoring/smartphone CCTV (again dead ending on your phone or your tenant’s phone or both) with fall alert (for elders)

  1. door locks either opened by your phone (or your tenant’s phone) or at a minimum keypad locks that you can change codes via an app
  1. all-off electrical switch (controlled from your phone or your tenant’s phone or both) including control over lighting

about it.

The only
other thing I’d probably do is use rainwater barrels for rainwater recycling.

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD, ROYAL LePAGE Performance Realty broker, Ottawa Senators founder, Real Estate Investment and Business coach 1-613-762-8884

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About the Author

Bruce is an entrepreneur/real estate broker/developer/coach/urban guru/keynote speaker/Sens founder/novelist/columnist/peerless husband/dad.