How much attention do you pay to the thermostat in your house? Maybe not much. Set it and forget it, right? Or maybe you have a programmable thermostat that you set once and let it run.
Well, you just don’t know what you’ve been missing.
Welcome to thermostats in the internet age. The folks at Nest Labs have come up with the Nest Thermostat. This beautiful thermostat can be controlled either right at the device or away from home with your smartphone.
$249 for a thermostat – are you crazy?!
That’s what we thought when we saw the price tag for a Nest Thermostat. After all, don’t the tenants pay the utilities? Well, yes and no. There may be a lot of good reasons to have at least some kind of programmable thermostat in your properties. Here are a few:
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Many multi-unit buildings have one source of heat, requiring the landlord to pay for the heat.
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Contractors may decide to crank the heat while working on your place in the winter, especially if they are changing out windows.
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Flipping a house with a nice programmable thermostat will only make the house more saleable.
Even if the tenants are paying the utilities, does it seem reasonable to raise the rent a little because you have a premium place with fancy upgrades?
The fact is that if you go on Amazon and buy a Nest thermostat – you can often pick up a used (or aftermarket new) one for around $215. Think you might be able to raise the rent $10-$15/month for this cool thermostat? If you combine it with other features in your apartment unit, it should be easy to do so.
Why not buy a regular programmable thermostat?
If you (or your tenants) are very diligent about programming the thermostat, AND you stay on the schedule it is set to (no manual changes to the temperature), you will probably not see a huge amount of cost savings by installing a Nest Thermostat over a conventional programmable thermostat.
But there are a lot of reasons that real estate investors should consider a Nest Thermostat.
First for you flippers out there…
Installing a Nest during the rehab phase will ensure that you receive timely notices of any heating system failures on your smartphone. The last thing you need when you have a rehab project going on is to have the pipes freeze and burst when nobody is there. And there is that nice feature to make sure your contractors are not cranking the heat.
Or maybe you need the contractors to crank the heat? Like when they need drywall mud to dry. Monitoring the heating system when you can’t be there is a nice plus.
Probably the best reason for flippers to have the Nest thermostat installed is return on investment (ROI). It’s not enough these days to attract retail buyers with just granite countertops and stainless steel appliances. Seems like every rehabber is doing that.
To stand out from the competition, consider appealing to tech-savvy buyers. The Nest thermostat can:
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‘Learn’ what the buyer likes at different times of the day and in different seasons, and adjust the temp automatically.
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Work in conjunction with smoke alarms, carbon monoxide detectors, and special light bulbs to let people know if there is an emergency developing in their home when they are not around. IF they are at the house, it can make the lights flash red to help illuminate exit routes if there is a problem.
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Sync up to your car (available on certain makes only right now) and automatically adjust the temperature in the house as it senses the homeowner is on their way home.
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Provide detailed reports and graphs about energy consumption. Not only will it just look at what temp the house is, but it will also consider the weather on each day. (Mind blown yet?)
Retail car buyers have been known to purchase autos based on the cup holders they have. Don’t you think a buyer who sees a Nest thermostat in the house might be more excited about your property instead of someone else’s?
Let’s not forget the landlords out there...
Sure Nest thermostats may not make a lot of sense if you are going the low-income or possibly college student route. But if you have some nice suburban single family or apartment rentals, a Neat Thermostat may appeal to some great tenants.
Besides the stuff for flippers mentioned above, some other features that landlords might appreciate include:
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The ability to adjust the temperature remotely from your smartphone means the tenant can’t crank the heat if you are paying for it.
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Graphs of your heat billing can be shown to potential future tenants so they can have an accurate idea of heating costs – nice for landlords to hand them when they are showing the apartment.
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Nest is working with appliance manufactures to sync the thermostat with other appliances in the house. By doing this and working with gas companies, they can provide guidance on using the appliances at non-peak hours and reduce everyone’s utility bills.
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Nest can also control a whole house humidifier/dehumidifier system through a humidity sensor. The sensor may help alert you remotely if you have a basement flood.
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The Auto Away feature automatically lowers the furnace temp (or raises the temp and shuts off the central air) if there is no activity in the house for an hour or two. This saves more on bills than just a programmable thermostat.
The cost savings from easily programming the thermostat or the revenue enhancement for offering the thermostat to potential renters can easily pay for a Nest Thermostat in a short period of time.
The Nest thermostat is easy to install for most conventional heating systems (boilers, forced air furnaces, etc.). Once you have it connected to the furnace wires, and a Wifi system is available, Neat will connect and need some information.
Download the Neat App onto your tablet or smartphone and you can enter that information: Stuff like the type of heating system you have, what kind of dwelling it is in (single family, apartment, etc.) and your zip code. That way it can understand what the weather is like in your area and provide heating efficiency reports automatically.
Yes, we realize that investors are always trying to cut costs, but what real estate moguls are truly interested in is Return on Investment. Once you see all the features of this innovative thermostat, you may find that the cost is definitely worth the return.
Stay abreast of all the innovative new ideas coming out in home design. How could you use them in your rehabs and/or rental units? What would appeal to buyers and renters?
Consider ROI instead of just cost when you are fixing up a property. It does no good to buy really cheap stuff or do shoddy work just because it is a lot less expensive. Doing that same work over and over means a higher expense.
Analyze your costs on a regular basis. The Nest Thermostat is a great tool to keep track of utility bills, especially if you are paying them.
JP Moses
is a real estate investor in Memphis, TN, with experience ranging from land lording to note buying, rehabbing, and wholesaling. However, wholesaling is the area that he enjoys most and where he bring the most experience and expertise to his students.