There are two things to consider when purchasing a home security system: the upfront cost of the installation and the monthly fees associated with monitoring the security system.
How much does it cost to install a home security system? A home security system can cost as low as $299 for a basic system to $2,500 for a well-equipped system. The cost to monitor your security system can range between $15 to $65 per month depending on the features and level of protection.
In this article, I’m only going to talk about home alarm systems. If you want to know how much it costs to install security cameras, then please check out the article I wrote titled How much does it cost to install security cameras for your home?.
The upfront cost of the security system
The good news for homeowners is that alarm companies do not make a lot of money on installing the security systems anymore. Most companies lose money on the installation to be competitive and get the monitoring account.
The security industry is highly competitive, and alarm companies make their profits on monitoring the security system and not the installation.
So, it would be in your best interest to get a system that offers the most protection from the start because chances are you will only be paying the same or below the cost of what the alarm company is paying for the equipment.
If you decide six months later that you want to add smoke detectors in all the bedrooms, guess what? You will pay two to three times more for the same equipment after you sign the alarm contracts.
Once you have signed the alarm monitoring contracts, you will not pay the same price later to add on to your security system because you are already locked into a three or five-year contract.
Monitoring fees and plans
Alarm monitoring fees can range anywhere from $15 to about $65 per month for a residential alarm system.
DIY security system monitoring
The least expensive monitoring fees starting at around $15 per month will be for DIY alarm systems such as Simplisafe, where the homeowner installs and services the alarm system and the alarm company only monitors it.
Alarm company monitoring
As far as traditional alarm monitoring, the monthly fees depend on:
- The upfront cost of the installation
- The number of devices being monitored
- The types of devices being monitored.
On average, the starting price is between $25.99 for systems monitored through a telephone connection and $35.99 for systems monitored through a cellular connection.
You can also monitor devices such as smoke and carbon monoxide detectors, natural gas sensors, flood sensors, but for an additional cost of about $5.00 per month for each type of device.
You can also choose to lower the upfront cost of the alarm system and installation by increasing the monthly fees.
Adding an extra $15 per month to the monthly monitoring fees can lower the initial installation by $540 to $900. But be clear that you will be signing a monitoring contract for a term of three to five years.
The cost of service contracts and warranties
A reputable alarm company will provide a one-year warranty on all parts and installation, but I have seen some security companies that only offer a 90-day warranty.
Make sure you read the sales contract carefully, the terms of the warranty will be stated on the front page of the contract, and if it is only for 90 days, you might want to think twice about hiring that company.
Service contracts are available for purchase starting at $10 a month for a basic system and up to $50 a month for a larger system consisting of many devices.
Some people sign up for a service contract from the day the system is installed, which makes no sense if the alarm company provides a one-year warranty. You might as well wait for the warranty to expire before spending extra on a service contract.
Cost to maintain the security system
Alarm systems will need to be serviced, especially if they are wireless. The main problem with wireless security systems is the need to replace batteries. Some security systems will need battery replacement every year, while others only require replacement every three to five years.
Some towns also require homeowners to inspect their burglar and fire alarms annually to reduce false alarms. If this is the case in your town, expect to pay between $95 to $150 a year just for annual inspections.
For repairs, alarm companies charge by the hour for service calls. They generally charge between $95 to $150 per hour plus materials.
If you hire a company that installs quality equipment installed by a technician that takes pride in his work, the chances are that you will have a security system that will provide you years of maintenance-free service.
But if the price tag is the main factor in choosing an alarm company, you will be paying for service regularly.
An example of what we charge for a security system
To understand how alarm companies price their systems, I will show you the price list I use when generating proposals for our customers. This price list is for a wireless alarm system.
Most alarm companies use the same method to come up with their pricing.
Wireless security systems are easy to install, and alarm companies know how long it will take to install each device, so they can give you a quote based on how many devices are included in the system.
In this example, I’m going to use Honeywell’s equipment, one of the most popular manufacturers in the alarm industry. Honeywell offers many different models, but this price list is based on a Honeywell Lynx 7000 system, one of the systems that most companies are using.
The alarm company in your area might not use Honeywell, they might use other popular brands such as DSC or GE, but the cost of other brands is similar to Honeywell.
We don’t offer free alarm systems, as you will see in the price list. We charge a reasonable price for the installation and provide the customer with quality equipment, and I will explain why you might want to stay away from free alarm systems a little later.
|Honeywell Lynx 7000 Control panel||$199|
|Honeywell LTE cellular communicator||$99|
|Honeywell 5816 wireless door/window sensor||$40|
|Honeywell 5800 mini wireless door/window sensor||$40|
|Honeywell 5800 PIR motion detector||$99|
|Honeywell 5853 Audio glass break sensors||$99|
|Honeywell wireless smoke detector||$125|
|Honeywell wireless carbon monoxide detector||$175|
|Honeywell wireless flood sensors||$175|
Let’s design a security system to use as an example:
In this example, we will install a security system for a house with three entry doors and ten windows on the first floor. We will install sensors on a total of 13 doors and windows and install two motion detectors as a backup.
We will start with the Lynx 7000 control panel and install a cellular communicator because the central station will monitor this system.
1- Honeywell Lynx 7000 touch screen installed by the front door.
1- Honeywell GSM cellular communicator
3- Honeywell 5816 wireless sensors to alarm the front, back, and garage doors.
10- Honeywell 5800 mini wireless sensors to alarm all 1st-floor windows.
2- Honeywell 5800PIR-RES motion detectors, one installed on the first floor and another on the 2nd-floor.
|Honeywell Lynx 7000 control panel||1||$199||$199|
|Honeywell LTE cellular communicator||1||$99||$99|
|Honeywell 5816 door sensors||3||$40||$120|
|Honeywell 5800 mini window sensors||10||$40||$400|
|Honeywell 5800 PIR motion detector||2||$99||$198|
|Sales Tax (New York)||$87.63|
The total price for this system, including installation, is $1,103.63. If you were to get estimates from three companies for this system, you would probably get quotes that are $200 higher or lower depending on the size of the company you’re dealing with.
The total profit for the security company is about $200 to $300 on this installation after they purchase the equipment and pay a technician to spend 2 to 3 hours installing this system.
The above example is a typical security system for an average home, but I would add more devices such as glass break sensors and smoke and carbon monoxide detectors for more protection, but when you have access to a price list like this, you can add to the system as your budget allows.
An investment of $900 to $1100 is a fair price for this system because this system will provide you with many years of reliable service.
Some companies will install a system with the same number of sensors for much cheaper than this, but I would stay away from these systems.
Remember that you are purchasing this equipment and are responsible for maintaining it. Installing a cheap system will cost you more in the long run because you will have to pay for repairs when the system stops working.
How to choose the right alarm company
When shopping around for a security system, one of the most important decisions will be which alarm company to go with. There are many alarm companies in your area, and they will be very different.
Some alarm companies are family-owned with only one or two employees, while others are nationwide corporations with thousands of employees.
The most important thing to remember is that an alarm company is only as good as the technicians that come to your home to install and service your system. It is tough to find qualified technicians that take pride in their work, so the bigger the company, the harder it is to find quality workers.
I wrote an article that you can read how do I choose the right home security company? I recommend reading it before selecting a company to install your security system.
Dealing with security salespeople
Did you know that security sales reps, also known as security consultants, have minimal experience in the security industry? Most salespeople only last a few months before they move on to another industry.
It is not easy to sell security systems, especially for someone who has never installed one before. For alarm companies to train their salespeople quickly, they will teach them only to sell one type of system, and that system may not be best suited for your home.
When you combine this industry’s competitiveness with salespeople who have little to no experience, they will often be afraid to sell you an expensive system that provides the security you need.
And since it’s better to make a small commission on a less expensive system than to get no commission at all, they may steer you to a basic security system, get a monitoring contract signed and move on to the next appointment.
So, you need to do your homework on what type of devices and protection is available and don’t just rely on what the salesperson tells you.
Free alarm systems
Free alarm systems became very popular in the 1990s when alarm companies discovered that they could gain thousands of new accounts very quickly.
Giving away a basic alarm system and charging $99 for installation could make owning a security system affordable. Before the free alarm system, homeowners would have to spend thousands of dollars securing their homes.
Unfortunately, not many people realize or understand that a security system consisting of two door sensors and one motion sensor is not a very effective alarm system.
Fast forward 25 years, free alarm systems are still as popular as ever before. In fact, most people think that all alarm systems are free.
In my opinion, after seeing some of those customers get robbed, assaulted, or become victims of home invasions when they thought a security system was protecting them, I would advise homeowners to stay away from free alarm systems.
The equipment offered by alarm companies
Several manufacturers make alarm equipment, but alarm companies will typically install just one brand based on a few factors.
- Whether or not it is proprietary
Cost of the equipment
The equipment used for low-end alarm systems is usually decided only based on cost. Alarm companies don’t care about anything other than the cost of giving away free alarm systems or dealing with a customer who doesn’t want to pay a lot for a security system.
Since most homeowners know nothing about security systems, the alarm company can install whatever they want as long as they are happy with the price.
Homeowners who are only concerned with the security system’s price usually end up regretting their purchase either because they end up with a system that doesn’t provide enough protection or find themselves spending a lot more for repairs and service calls.
Reliability of the security system
Some alarm systems are highly reliable and provide many years of use without any problems, while others have constant issues and require much more maintenance and service.
Some alarm systems cost more upfront, but they are just better. I have had my alarm system for over 20 years now, and I have never had any problems with it. I use it every day, and other than replacing the battery every three years, I never have to service it.
On the other hand, customers that are only concerned with the upfront price when purchasing their security system have constant service calls.
So when your shopping around for your security system, don’t just concentrate on the price because you have no idea what you’re getting from the alarm company unless you have done your research.
What makes one system more reliable than the others?
The quality of materials used makes a big difference, especially for wireless security systems.
- With cheaper systems, often times when replacing the batteries in a wireless door or window sensor, it is very easy to break the plastic tab that keeps the cover of the sensor closed.
- This is very common when the window sensors are exposed to ultraviolet light from the sun, they become very brittle and crack easily.
- Another problem with cheaper alarm equipment is that they have a limited wireless range. This means that a door sensor installed on the far end of the house will not communicate with the rest of the system.
- When a sensor doesn’t communicate with the rest of the security system you end up with a lot of trouble messages and beeping from the keypad, and it is possible that the system won’t detect an actual burglary.
When you’re getting estimates for your new system, make sure the sales rep includes all the model numbers for the devices being installed on the system. You shouldn’t have any problems researching once you know the make and model numbers.
Features of the alarm system
- Alarm systems that are completely wireless are very easy to install but they are limited when it comes to certain features.
- Can only have one keypad
- No hard-wired circuits
- Can only communicate through a cellular or wifi connection
- Limited to the number of devices that can be installed
- Tend to have a shorter wireless range, not the best option for larger homes
Wireless/hard-wired alarm systems
- Can have multiple keypads and touch screens
- Can have wired and wireless circuits
- Can communicate with the central station via Telephone line, hard-wired internet connection, radio transmitter, and cellular
- Some systems can accommodate up to 250 devices
- Can have multiple wireless receivers for large properties
There are three types of security systems available for alarm companies to purchase and install.
Off the shelf, systems can be purchased from multiple vendors by any alarm company.
Dealer-based systems require the alarm company to become an authorized dealer and purchase a certain amount of equipment from the manufacturer in any given year to remain a dealer.
The benefits of a dealer program are that other alarm companies cannot purchase the same equipment, making it harder for another alarm company to take over the account.
Proprietary Systems are exclusively made for certain alarm companies. They can not be taken over or monitored by other companies. A homeowner or business owner will have to upgrade the entire security system if they decide to switch to another alarm company.
This allows the installing alarm company to protect their accounts from taking over by other alarm companies.
Wired vs. wireless alarm systems
Let’s talk about wireless vs. hard-wired security systems. Hard-wired security systems will be much more expensive than wireless systems because there is a lot of labor involved with the installation, and alarm companies usually don’t offer any discounts for a hard-wired system.
For example, a technician with minimal experience can install an entire wireless security system consisting of sensors on every door and window in the house by himself in one day. If it is hard-wired, that same system may take two experienced installers 3 to 5 days to install.
Alarm companies will not tie up two of their installers for 3 to 5 days without making a profit on their labor.
When I started in this business 27 years ago, I would get $75 to install a basic hard-wired security system consisting of a control panel, one keypad, one siren, two door sensors, and one motion detector.
It would take me about 2 hours to complete the installation, and I would usually perform 2 to 3 installations a day.
The alarm company would charge only $99 for the system, and even though they would lose money on the installation, they would end up with 2 to 3 new accounts a day, earning $33 a month for three years. And most customers will end up keeping their alarm system for much longer than three years.
Monitored vs. non-monitored security systems
Even though the alarm companies monitor most security systems, some homeowners don’t want their security systems to be monitored.
Some security companies won’t even bother installing a non-monitored alarm system because they rely on the reoccurring monthly revenue of monitored systems.
However, if you want a non-monitored system, expect to pay more than you would for a monitored system because the alarm company is only making a profit on the markup of the equipment and the installer’s labor.
Another option is to install a DIY system that you can purchase and install yourself, and they don’t require any monitoring by an alarm company. There are some excellent inexpensive security systems that you can buy on Amazon.