Owning a home is a keystone of wealth. But you can’t expect a profit if you don’t invest in your property. You have to take extra care to upgrade the energy efficiency of your property which will create a path for you to make more money out of it.
But there are people who still believe that this is tenant’s responsibility and even some landlords make them pay for it which is a big NO-NO if you want to do this business for a long time.
Remember, people are your most important investment. When you are investing in your property that means you care about your property as well as the tenants. Keeping that in mind today’s article is about some important energy efficient upgrades for your investment property which you can also think of some landlord success tips –
Measure & Manage Your Energy Consumption
Before you step forward to invest take some time to measure your energy consumption of your property. The most effective way to monitor energy efficiency of your property investment is to install an electricity monitoring system. It will not only track the changes but the tenants can also monitor their own cost and minimize it if necessary.
Use Energy Efficient Lights
Replacing old fluorescent lights with LED lights is a long term investment and can save up to 75% energy cost. Energy saving yet brighter lighting can make your tenants more comfortable and they won’t need to bother to change lights very often. You can make your tenants feel important by taking care of such things and they will value your property too.
Replace Old Air Filters
Changing your air conditioning system’s air filter is easily forgotten. But this quick fix is an important issue to keep your system running and may prevent costly future repairs. Regularly (in every 90 days) replacing your air filter helps to reduce indoor air pollution. Sometimes at the time of inspection, it might appear clean but looks can be deceiving. There might be dust and small particles inside the filter and leaving a filter for too long with dust can decrease efficiency and harm the system.
Seal Doors and Windows
The older your rental properties are the more the doors and the windows might have gaps or shaky lock systems or broken glasses. I would suggest to check all the doors and windows thoroughly in daylight and reseal the gaps properly. Change the locks and the glasses if needed for safety reasons and keep a set of extra keys.
Seal Ducts to Control Temperature
Check out the ducts if they are connected properly or if there are any leakage or not. This ducts leak so much of their heated and cooled air into the attic, basement or crawlspace in a typical house. But if you wrap the ducts with insulation can slash hour HVAC costs by almost 30%. It’s not as simple as applying duct tape to the joints as duct tape does not last long on ducts. It might cost you a bit but it’s safer and long lasting if you hire a pro for this job.
Change the setting on the Water Heater
If you notice you will see that the default temperature of most water heaters is 140 degrees. But wait! You won’t be needing this much heat for your shower water to be hot. The Department of Energy recommends to keep the setting to 120 degrees (I recommend to keep it 100 degrees) as turning down the temperature of your water heater can save 3 to 6 percent energy cost. But if you lower the temperature too much then tenants might think that the water heater is broken and panic for it.
Upgrade Old Household Appliances
Appliances like a refrigerator, washing machine, microwave etc. account for 30% of your household energy consumption. The energy use in an average Australian household produces 12 tons of greenhouse gases per year. So updating your household appliances can save up to 10% energy bills. Big improvements have been made to refrigerators. They now use 40%-50% less energy. If your fridge was made in 90’s then you can save $120-$250 by switching to a new one. Modern dishwashers can save up to 10-12 litters per load compared to the old one. These wash better using less electricity. If your air conditioner is older than 20 years then replacing it with a new one can save you $20-$90 dollars on your annual energy bill.
Calculate Your Return on Investment
If you are investing on your property then you better calculate the return on your investment. According to your investment, you can figure out the amount you want to increase in existing rent amount or the value of your property. You can get back a percentage of your invested money within 3-4 years by saving 15%-20% energy bills or reduced tax.
Benefits of Energy Efficient Upgrades
- Energy efficiency upgrade will improve your indoor comfort
- Certainly, you can save money on energy bills
- Duct sealing or replacing air filters can reduce moisture issues
- This might increase your building or apartment resale value
- You can increase your rental amount
With all these benefits anyone who cares about their rental property will obviously want to upgrade to the energy efficient home but it might not be possible to complete all these upgrades at a time for everyone as it may cost you a fortune. Don’t get worried if you are short in money. List out the most important upgrades that are needed to be done immediately and start working on them accordingly. It’s advisable not to rush and compromise your upgrades but to take some time and do the best you can.
David Nicoll is a freelance writer and an independent blogger who writes for finance, insurance, investment and rental properties related niches like St George Underwriting Agency.