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Automation in The Home

Veteran international investor John Corey comments

Automation. What is it? The Wikipedia entry tells us:  “Automation can be defined as the technology by which a process or procedure is performed without human assistance.” Automatic control is another way to understand automation. Is the advancement of automation important to property investing? If automation does have an importance, how so and do you need to adjust your investment decisions?

Central heating
After moving to the UK, I encountered a number of situations where a property had been ‘updated’. This included the 'addition of central heating'. I had no idea what it meant to ‘add' central heating. Ever since I was a child, all homes I had ever seen or considered buying already had central heating. How could a UK property be updated by ‘adding’ central heating? Little did I understand back then how behind the UK homes were compared to the USA.

Central heating is an automated system. Once set up, the heat will go on and off to keep the home above a specified temperature. Lots of mechanical and electrical systems are combined to feed the fuel, turn on and off the combustion process and then circulate the heated water. If you were to go on holiday for months and you paid your fuel bill, it is very easy to imagine the property would remain at a relatively constant temperature for the whole period without you needing to take any ac-tion. To expect anything else is to recognise that your automated system is broken.

More recently, we can upgrade the heating control system so it will communicate with one or more smartphones. You monitor and control the central heating without having physical access to the on-site thermostat. The automation is an upgrade to a the digital solution. In some ways, it will feel like nothing changed yet it can also feel like there was a massive change. A change in control and insight into what is taking place over any time horizon. People like being in control even when the net result is largely the same. Think when FedEx outsourced package tracking to the customer and the customer thanked them. FedEx did not drop the cost for shipping the package even though the cus-tomer now took on the role of customer service agent.

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