By Evelyn Long, editor-in-chief of Renovated
Internet-connected kitchen appliances and smart thermostats are quickly becoming staples in modern residential properties. Home buyers and sellers should understand typical expenses and return on investments (ROIs) to make informed home improvement decisions.
How Much Does a Smart Home Cost in 2025?
Since no one-size-fits-all smart home exists, a price range is much more accurate than a single number. Whole-home automation costs between $2,000 and $6,000 on average. However, depending on various factors, the project can easily exceed $10,000. Many options exist, for an example check out PIXIE’s smart home automation systems.
The actual cost of a smart home depends on property size, device quality and brand choice. For example, 200-foot color-changing string lights from a well-known premium brand will generally be costlier than an offshore manufacturer’s 100-foot tunable white alternative.
Generally, buying a smart home is more expensive than creating one because homeowners factor it into their house’s market value when they sell. Like all home improvements and renovations, it boosts the property value well beyond its base cost, providing a tidy profit.
The Value of Having a Smart Home in 2025
For most of human history, a house has been a place to sleep, eat and unwind. In the digital age, it has become something more — a central hub for connection and automation that transcends the physical world.
Thanks to the Internet of Things (IoT) — a vast network of internet-connected devices — almost any property can become fully automated. Homeowners can control various devices with a smartphone app or voice assistant, even if they are miles away. For example, they can turn on the air conditioner right before they leave work or let the dog out without walking downstairs.
People are buying into this style of living because it benefits them and the environment. In addition to improving day-to-day convenience, it makes building systems more energy-efficient and less wasteful.
More people are digitalizing every year. Statista forecasts the global number of smart homes will reach over 785 million in 2028, up from 191.38 million in 2019. These figures represent a 310% increase in just under a decade.
Consumer demand is rising exponentially. Original device manufacturers (OEMs) are improving product variety to appeal to a broader customer base. In the smart lighting category alone, there are bulbs, floodlights, light curtains, TV backlights, lamps and more. Soon, every traditional gadget may have an internet-enabled version.
The global smart home market value reached an estimated $149.43 billion in 2025, with smart garage door technology leading the charge. The forecast predicts it will reach approximately $630 billion by 2032 — a 321% increase in less than a decade — highlighting the value of digital transformation.
Must-Have Smart Home Integrations
There are countless smart home integrations, ranging from automated window shades to smart air purifiers. Their costs differ depending on several factors.
Bedroom
Many smart alarm clocks have customizable settings. Some even tell stories or play relaxing sounds to help people fall asleep. A person could replace their table lamp, white noise machine and clock radio with a single device. Consolidation would reduce visual clutter and improve energy efficiency.
Smart lighting is another popular choice. IoT bulbs typically use motion sensors, timers or app input, giving users maximum control. While numerous premium products — like permanent, whole-home outdoor lights and brand-name recessed downlights — exist, there are also many affordable versions.
Kitchen
Nowadays, almost all kitchen appliances and gadgets have an internet-enabled counterpart. Blenders, coffee makers, ovens and ice cube machines have digital displays, mobile apps and automation features. Many can track usage or enable low-power modes to conserve power and extend equipment lifespan.
Living Room
IoT-powered heating, ventilation, air conditioning and cooling (HVAC) systems are becoming increasingly common. Smart thermostats typically range from $100 to $350, depending on the brand and features. Homeowners could save up to $250 in the first year, a great ROI. Simple, cost-effective models also exist in the sub-$100 category.
Even the expensive variants may be worth the investment since they deliver a good ROI. An ENERGY STAR-certified smart thermostat can reduce heating and cooling costs by 8% annually, and the gain would be even higher when combined with other solutions.
While less practical, smart speakers, televisions, projectors and gaming consoles are equally beneficial. Their ROI may not be as great, but they offer convenience and granular control.
Outdoors
Outdoor IoT consists of security and lawn devices, including smart doorbell cameras, door locks, sprinkler systems, garage doors and automatic sunshades. There are even light-emitting diodes (LEDs) and solar lights rated for outdoor use.
They help reduce homeowners’ water and electricity use, saving money and conserving resources. LED bulbs are far superior to incandescents, using 75% less energy and lasting 25 times longer. However, they make up just 50% of residential lighting purchases. Investing in a smart home provides an excellent opportunity to switch.
Do Smart Home Devices Add Property Value?
Research shows IoT devices can increase property value by 5%, depending on the type and number implemented. It may not seem like much, but on a $350,000 house, the seller would earn an extra $17,500. That is more than double the upper average cost of $6,000 for whole-home automation.
In addition to contributing to property value, a digital transformation can attract buyers. A small segment of people exclusively look for smart houses. In the 2025 Home Buyers and Sellers Generational Trends report, around 11% of homebuyers reported purchasing their house because it had smart home features.
Cost Factors Associated With Smart Homes
The true cost of a smart home varies dramatically between a person who lives in a five-bedroom house in New York and someone who lives in a small ranch home in Illinois. Their installation approach and product selection play just as prominent roles.
Home Size
Generally, the larger the home, the more expensive the project will be since homeowners must fill additional rooms with extra IoT devices. Also, they will need more outlets and a better internet connection to keep everything organized and running smoothly.
Features
Products with more features are generally more expensive because they are considered premium. Many OEMs release newer versions of products every few years to address common complaints or meet changing consumer demands.
Once a brand releases a new product, others follow suit with copies. They may not last as long or use the same quality materials, but they offer the same features at a much lower price.
Integrations
Some IoT devices require users to be nearby and have Bluetooth or Wi-Fi enabled. Others can connect to smart home hubs and integration platforms for remote access and control. While some brands sell starter kits that contain all the necessary components, they are often sold separately.
Some top models range from around $50 to $300, depending on size, features and brand name. Some device types also only work with specific hubs.
Installation
Like with all home improvement projects, a DIY approach typically saves money. Many IoT devices are consumer-friendly, shipping with instructions and small hand tools to simplify the process. However, installing products like recessed downlights and HVAC sensors often requires additional technology or electrical knowledge.
People can hire a professional to do the job. It is faster and more convenient, but it is also more expensive.
Are Smart Homes Worth the Money?
Investing in a smart home can be worthwhile for people who want to boost their property value or reduce their utility bills. Even if the ROI is relatively small, it is still beneficial if they want the convenience that internet-connected devices offer.
IoT devices can even save people money. For instance, while experts recommend changing air filters at least once every 90 days to optimize HVAC performance, an internet-enabled sensor could tell homeowners precisely when to act, saving resources and improving energy efficiency while lowering their maintenance and utility bills.
Whole-home automation can have a steep upfront price tag. Homeowners must also consider any upkeep — such as changing batteries and replacing devices when manufacturers stop supporting them — that requires additional funds.
No one wants to get halfway through a project only to realize they lack the funds to hire a professional to fix an unforeseen issue. A contingency fund accommodates unexpected expenses by holding around 10% to 20% of the budget back. If saving this much sounds doable, investing in a smart home may be the right choice.
The Future of Smart Homes Looks Promising
Smart homes are becoming mainstream. Many people see the convenience and value others have achieved with their investments. Purchasing, organizing and maintaining a house full of internet-connected nodes can be costly and complex, but many consider the personal and environmental benefits worth it.
Even property management companies are beginning to see the value of investing in and integrating solutions like smart thermostats and appliances in their apartment rentals. Renters who have grown used to these everyday conveniences will continue to want them if they eventually purchase a home, helping drive adoption.
The expansion of the IoT is contributing to general acceptance. As time passes, older releases become more affordable and secondhand options become more common, lowering entry barriers. Further, OEMs develop better products, netting homeowners increasingly large maintenance and utility bill savings.
While no one can predict the future, it looks promising. Soon, having a smart home could become as common as owning a smartphone or driving a car. Hopefully, this future will prompt design innovation and disruption, helping users achieve even better ROIs.
Saving Time, Money and Resources With IoT Devices
Whether people are in the market to rent, purchase or sell a house, they should look for space-saving, cost-effective IoT solutions. The sooner they modernize every room, the sooner they save on utility bills and reduce their carbon footprint.