There are many potential ways to re-invest into your rental property. A newly remodeled kitchen or bathroom can make it much more attractive to renters. A renovated backyard will help it stand out from other properties in your area. Yet, some of the most impactful rental renovations tend to fly under the radar: energy-efficiency home improvements. In this article, we’ll review how investing in efficiency improvement projects can pay off down the road for both you and your renter.
Seal and repair the property’s air ducts
In a forced-air HVAC system, heated or cooled air travels from the blower to each of the property’s rooms via a series of air ducts. Unfortunately, in many single-family homes and condos, this is an imperfect process: several leaks, cracks, and pinholes lead to this cooled or heated air escaping the ducts into attics and unconditioned spaces, such as the garage. This means your HVAC systems have to work harder to change the temperature of the property’s rooms, which causes energy costs to spike.
If the cooling and heating costs are rolled into the rent, you’ll end up saving quite a bit by making your property more energy-efficient. However, even if your renter is the one on the hook for the energy bills, it still makes sense to move forward with duct sealing and repairs. Less wasted energy means your property’s air conditioner or heater doesn’t have to work quite as hard or as long, reducing the cumulative wear-and-tear on the system. Taking steps to boost the efficiency of your rental property today may end up adding years to the lifespan of its HVAC systems.
With the rising cost of electricity and gas, your renters will also appreciate a more energy-efficient property. Many property managers and owners are now advertising energy-efficiency upgrades as features in online listings, just as they mention a hot tub or upgraded kitchen. For today’s cost-conscious renters, energy-efficiency can be a big selling point and a positive point of comparison between your property and others in your area and relative price range.
Have new windows installed
How old are your property’s windows? If your rental property still has single-pane windows, perhaps original to when it was built, it’s probably time for a change. Single-pane windows come from a time when energy was relatively cheap, and energy-efficiency was a niche topic. In a modern rental property, these windows lead to significant energy waste, reduced indoor comfort, and little in the way of noise prevention.
Dual-pane windows are the new standard in homes, apartments, and more. As their name suggests, these windows consist of two panes of glass, separated by a thin air pocket. During manufacturing, this pocket is typically filled with a colorless, odorless, and safe gas, like argon or krypton. Combined with the two physical panes of glass, the gas helps slow down heat transfer, keeping heat inside during the winter and outside during the summer. All told, dual-pane windows are about 30% more efficient than single-pane ones.
As we’ve already discussed, there are several benefits to improving your property’s energy-efficiency. Dual-pane windows may initially seem like a significant investment, but, in reality, they give you options. For example, you may decide to sell your rental property in the next 10-20 years. Dual-pane windows will make it much more attractive to buyers. If you end up holding onto it, you’ll find that dual-pane windows keep your renters happier.
Upgrade to a tankless water heater
Another one on our home improvement list concerns your water heater. If your property’s current water heater is nearing the end of its lifespan, now’s the time to start thinking about investing in a new one. Instead of replacing it with a similar system—that familiar, cylindrical tank— you should consider upgrading to a tankless water heater.
Also known as “demand-type systems,” tankless water heaters have several advantages over traditional “tank” systems. Perhaps most notably, they can provide your rental property with endless hot water. For larger rentals marketed to large families, this can be a significant selling point. After all, no one likes running out of hot water on a busy Monday morning.
While they tend to cost more upfront, tankless water heaters are also much more energy-efficient and last about twice as long as standard water heaters. That means savings for both you and your renter. However, where demand-type systems shine in a rental property context is their reliability and lowered risks. With no tank involved, there’s no risk of corrosion or damage compromising the tank shell and leading to a tank burst. Whatever extra you spend on a tankless system at installation may pay off down the road in the plumbing repairs you can potentially avoid.
Invest in your property’s future
The one unifying aspect of all the upgrades reviewed above is that their upfront cost today is often exceeded by the savings they’ll net you down the road. For forward-thinking property owners and managers taking the long view of their property’s future, this is the right direction.
To get even more ideas for short- and long-term energy-efficiency home improvements in your rental property, check out this new infographic:
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