The Next Big Opportunity for Home Builders: ‘Home as a Service’

Builders build and sell homes. What if they sold service subscriptions, too?
Home as a Service Benefits HVAC Contractors

Photo: Gerd Altmann via Pixabay

Soon after Dennis Steigerwalt moved into his energy-efficient home, he came to a sobering realization: He didn’t know how to make the most of its high-performance features. 

“I had all this technology installed in my home, but I didn’t know how the system is meant to operate,” says Steigerwalt, president of the Housing Innovation Alliance. “I’m in the industry and I can call people, but imagine if I couldn’t.”

Many homeowners don’t have to imagine that scenario; they live it. Steigerwalt says builders of high-performance homes have told him they return to their properties one or two years after selling them and make a common discovery: “All this great technology they’ve installed is unplugged, not working properly, or disregarded altogether,” he says.

Some in the construction industry have been thinking about this problem—and about how to resolve it for any house, not only energy-efficient ones. 

What is Home as a Service

The “home as a service” model could be the answer. With home as a service, builders don’t simply sell a home and then walk away. Instead, builders regularly maintain and service the home’s equipment for a flat fee. “So it’s not a one-time thing, it’s an ongoing experience and relationship,” Steigerwalt says.

“We want to create lifelong fans and build referrals. Home as a service is a brand-building opportunity for future sales.” 
— Bill Rectanus, vice president, homebuilding operations, Thrive Home Builders

In effect, it’s a subscription service for home maintenance. 

The subscription business model has infiltrated plenty of industries. We commonly subscribe to food, news, car, and even healthcare services. “We don’t buy songs anymore,” Steigerwalt points out, “we buy subscriptions.” And subscription has already worked its way into various housing components. Plenty of HVAC contractors offer it, for example.

The subscription model has grown more than 400 percent since 2012. And there’s been a global shift toward subscriptions that the pandemic-related downturn has only accelerated, according to the World Economic Forum

So why shouldn’t the housing industry offer maintenance subscriptions?

Thrive Home Builders thinks it should. The Denver-based builder has been looking into home as a service and hopes to begin offering some form of it in the next year or two, according to Bill Rectanus, vice president, homebuilding operations, Thrive Home Builders. 

Home as a service would be especially useful for the complex equipment that goes into Thrive’s efficient homes, Rectanus finds. Not every HVAC contractor knows how to service an energy recovery ventilator, for instance. But Thrive knows the service providers who do. 

“We know more about the home, its attributes, and how it’s put together,” Rectanus says. With home as a service, “we would make sure our buyers’ efficient, healthy homes remain efficient and healthy.”

Thrive likely would work its way into this business model first by ensuring that homeowners reap the benefits of all their manufacturer warranties. Instead of handing homeowners a pile of warranties and reminding them to register, Thrive would do that paperwork for them. And it would perform the regular services that manufacturers require to maintain their warranties. “That would be our entry point into home as a service,” Rectanus says. 

Thrive could then segue from that into offering a more complete home-as-a-service program. For a flat fee, Thrive’s technicians twice a year could provide routine maintenance, inspect the home, and identify and address any potential issues before they become problems. They might catch a faltering AC system before it stops working and leaves a homeowner in the smoldering heat for days on end, waiting for an HVAC contractor to show. As Thrive plays a growing role in maintaining its homes, it likely would feel more comfortable extending its own builder warranties.

But before it can get there, Thrive first has to conduct market research to see what consumers think about home as a service and how much they’re willing to pay for it, according to Rectanus.

The Benefits of Home as a Service

Home as a service clearly benefits homeowners. They wouldn’t have to think about maintaining their houses. Their equipment would operate optimally, so they could experience their homes the way they were designed. And they’d have better relationships with the builders, trades, and manufacturers.

Builders would benefit, too. With home as a service, they’d expand their revenue stream while creating lasting, trusting relationships with homeowners. “It’s about creating a customer for life,” Steigerwalt says.

Thrive’s Rectanus agrees: “Typically, builders close the door and move on to the next customer. But we want to be a trusted resource for our buyers for a longer time,” he says. “We want to create lifelong fans and build referrals. Home as a service is a brand-building opportunity for future sales.”

For now, it’s an opportunity waiting to be tapped. “The home is the biggest investment most of us will make in our lifetime, and it’s the most important thing for the safety and health of our families,” Steigerwalt says. “Yet most don’t come with a book that says, ‘This is how you do it.’”

If home as a service takes off, homeowners won’t need to buy that book. They’ll have a subscription for that.