Upgrading to energy efficient properties has never been easier!
With today’s global warming and climate change issues, it makes perfect sense to be eco-friendlier and turn your energy-saving mode on! For a real estate investor, the priority should always remain to ensure a sustainable cash flow and return on investment that you see as profitable even when going for energy efficient properties. On the other hand, how can real estate investors make use of energy efficient homes without adding the extra costs to their investments?
As for the case of most successful real estate investors, spending a penny that won’t yield a penny is out of the question! And that’s the way it should be too! So, what are energy efficient properties? And what energy efficient upgrades can you implement to join this niche in the real estate market?
What makes a property join energy efficient homes?
According to the U.S. Department of Energy, an energy efficient property has a high score in energy efficiency. To be exact, the energy efficiency of an investment property is based on the structure of the property as well as the heating, cooling, and even the water heating system. With energy efficient properties, it’s about saving energy and money as well as durability and comfort. So, for those skeptical few, an energy efficient investment property is not meant for your tenants to be roughing it with low-quality upgrades that might as well be considered downgrades!
What energy efficient upgrades can you make use of within your investment properties?
Let’s dig in!
Don’t skimp on a smart thermostat
Climate control consumes nearly half the American household energy. Therefore, finding sustainable energy saving upgrades can save you a bundle with your electric bill! According to recent studies, when installing a smart thermostat, you can expect your investment property’s energy consumption to go down 10-15%. Of course, these energy saving upgrades are expected to translate lightly into your rental income. Keep in mind that you will be reducing the energy consumption of your tenant and ultimately, he/she will be paying less in utilities. That’s the main competitive advantage you can offer with energy efficient properties as rental properties.
Not to mention that you’ll be marketing this in your property’s advertisements as a green home! It really is a win-win situation!
Install storm doors
While this may not be on the top of your list when trying to accommodate energy saving upgrades within your investment properties, it can be a great addition to your green investment property. Accordingly, the U.S. Department of Energy stated in recent studies that storm doors can cut your average monthly consumption by half through conserving heat and cold.
The average cost of a basic storm door starts at $75!! For the energy saving percentage that it offers, you better install one in all your investment properties!
There are better ways to save your rental income than skipping out on a storm door. Read this blog post to learn more: Save Your Rental Income For These 3 Things.
Window maintenance or replacement (if needed)
Windows are the most sensitive part of any property’s insulation. They allow light and sunshine in which can alter the interior temperature of a property. If you’re buying an investment property for the purpose of renting it out as a traditional rental or an Airbnb rental, consider replacing windows. As costly as it may be, the price you pay for windows will effectively go into consideration with a property appraisal when selling.
If you’re doubtful about getting a property appraisal or a real estate market analysis, read this blog post: Real Estate Market Analysis vs. Home Appraisal: What’s the Difference?
An important thing to keep in mind with windows is insulating wind and water. Make sure that they seal perfectly when closed to eliminate the loss of heating and cooling energy.
Semi-annual HVAC maintenance
Maintaining your HVAC system is a must whether in your investment properties or in your own primary residence. Many real estate investors often forgo maintaining it as long as it’s functioning right- completely wrong! You should maintain it at the beginning of summer and at the beginning of winter. This can save you a bundle as procrastinating such issues can backfire into an even costlier mess.
Maintaining the HVAC system can be as simple as changing and cleaning the air filters, lubricating parts, and cleaning coils. It really isn’t a costly job to ensure your property is up-to-date with energy efficiency standards.
Energy efficient appliances
Who doesn’t want to go on an appliance shopping spree? Of course, we’re talking about replacing energy efficient appliances when old ones become more of a liability through maintenance. There are many energy efficient appliances out there. In fact, electronic appliance companies are taking pride in producing highly-rated efficient appliances.
When shopping for appliances, look for energy star certified models. The beauty of energy saving upgrades is the fact that you’re not only saving money within your investment properties, but you are also helping your tenant save money, and helping the environment by reducing your carbon footprint. Triple win!
If you’re already a real estate investor turned landlord and wondering how to handle your landlord duties, read this blog post: Landlord-Tenant Law: Basics Every Real Estate Investor Should Know.
Change regular bulbs into LED lights
The good old-fashioned lightbulb doesn’t cut it anymore for the energy-conscious real estate investor. With today’s manufacturing becoming more refined and detailed, humanity has managed to invent bulbs that waste no energy with releasing heat and directing energy on light producing. This breakthrough is the LED bulb.
There are two main advantages when opting for LED bulbs in your investment property:
- The much longer lifespan.
An LED bulb has a lifespan of 45,000 hours of usage while compact fluorescent lamps average around 8,000. Compare that to the 1,000 hours of usage to the good old incandescent light bulb.
- The heat produced.
The average LED bulb heats up to 87° F. Meanwhile, the compact fluorescent lamps go for 179° F and the incandescent light bulb reaching all-time highs of 335° F.
LED bulbs are the energy efficiency upgrade that any real estate investor and tenant can hope for. It offers comfort, durability, and minimum maintenance on your behalf due to the longer lifespan.
This might not be the first choice for real estate investors looking to save costs when buying a rental property. In fact, the start-up costs of solar panels remain high as the technology has not yet reached its full potential and functionality.
On the other hand, installing solar panels in your rental property, whether a short-term rental or a long-term rental will make a statement about your investment property and will attract a crowd that’s willing to pay extra for such a privilege. Moreover, if you do proper research, you can find some reasonably priced solar installation contractors.
While you can offer this extra amenity for your tenants as a free one while factoring it in within the rent, you can also charge your tenants a flat fee for electricity and basically become the power company. It’s up to you and your investment strategy to decide the best approach to this!
Going for energy efficient properties as investment properties should be on the mind of many real estate investors. If the tenants are looking for it, then there should be a supply in the real estate market to cover it. Moreover, if you’ve mastered the art of making apartments and properties energy efficient, you can replicate it into any investment property, whether yours or other real estate investors.
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If you have any more insights, please share them with us in the comments section below.