Should landlords make energy efficient upgrades to their investment properties?
I had a consultation with some joint owners of a rental property in a nice neighborhood nearby that generally has a good rental appeal and pretty high rents based on the neighborhood, surrounding area, and desirability. One of the parties asked me about making energy efficient improvements to the home for renting it out. The blunt question was “how much more rent will I get by putting in new windows?” The windows are probably 40 years old at present, and some don’t open. My comment was that I thought it would be a quality upgrade to their rental property and would get them a better tenant faster and more importantly keep a good tenant with the savings on their utility bills. The monthly rent, maybe $100 per month more.
In a nice way, they really didn’t think that was enough to do the upgrade and didn’t care what the utility bills would be for their tenant. I told them that buyers today and tenants are picking properties based on utility bills. Believe it. The current economic state has seen a huge move to analyze where we spend our money. Utility bills are money down the drain, no investment purpose of payoff. If we can save $100 on utilities, we can purchase a week's worth of groceries, buy gas or BART tickets to get to work. THIS is a BIG deal with people being laid off, hours cut and working two jobs to make ends meet while we dig out of this foreclosure and bank failure driven economy.
My opinion is that this has changed most people forever!!! I’ve seen a big trend this past year of people moving down in rent and size home to save money and utility bills. It hasn’t just happened once, it’s happening over and over. Once we become aware of things that can save $$$ in our budget, we will not succumb and go back to our old spending habits.
Someone I know reduced their PG&E bill by over $200 a month by just changing all of her lights to fluorescents and turning lights off that the family of 5 would normally not worry about. THAT’s a BIG deal and something the kids and parents won’t forget. So if you are a landlord thinking about an energy efficient upgrade for your rental property, trust me, it will make a difference to your tenants and the longevity of their stay. Isn’t your biggest expense in finding a new tenant my fee in finding the new tenant? I’d like to save you that and keep a good tenant. Give them a property they’ll want to stay in.
DRE 615420
LGLS CP and GREEN Realtor, EcoBroker…thoughts from the field.
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