Does it make sense to 'green' your rental?

Does it make sense to 'green' your rental?

Environmental issues are not going away, and regardless of the debate on whether there is such a thing as climate change, it makes sense to incorporate a greener lifestyle. An environmentally conscious lifestyle brings financial rewards through energy savings and for landlords, potential increased earnings. However, most landlords find it difficult to see the value in 'greening' their rental properties.

This wide spread attitude inspired the Australian Housing and Urban Research Institute to undertake a study to find out what was stopping landlords from investing in green changes to their rentals. The landlords in the study felt that the cost of implementing changes were too costly with little financial or personal benefit. They also felt that tenants would not appreciate the changes and it would be inconvenient to access their properties to carry out the work. It sounds like the landlords in question didn't have good property managers!

Doing what is right for the environment is hard to put a dollar figure on. You feel good about doing the right thing, but is there a return on your investment?  The upgrades that you undertake will save the tenant money.  A tenant that is saving money will be far more likely to stay where they are, therefore reducing turnover. This is in addition to the potential long term gains. When looking at green and non-green comparable properties in the USA, green properties are getting 10% higher market price, and selling 25% faster. In Europe properties are obtaining a 7.5% higher market price, and are renting 3.5% faster with 3% higher yields. It's safe to say that the trend will become more apparent in Australia.

How  to 'Green up' your Rental.

There are numerous why to improve the energy efficiency of a house. If you want to make a big impact, and are determined to green your property, consider the following:

Big Ticket items

1. Insulation. Hopefully your rentals should already be fairly well insulated. Look at renewing old insulation, adding extra insulation in ceilings and walls. Without a well insulated place any other changes would be fairly pointless.
2. Water, Water, Water. There is so much wasted water from everyday household activities, harvesting this water to use in the garden is a great move. Even a rainwater tank would make a statement to your green commitment. In Australia's hot summer months, it may even be more important to consider water conservation. Solar hot water is a fantastic way to capitalise on the Aussie sunshine.
3. Solar Panels. If you can stretch, install solar panels for power generation. To get a return on the investment you could conceivably increase the rent and offer free electricity (especially if you have made the place energy efficient). Or you could increase the rent and let the tenants pay for the installation. Prospective tenants will jump when they see your property advertised as being 'Solar Powered'. If you are interested in selling your property, you should reap the advantages here too.  Of course working with a good accountant would help you determine the best way of handling the tax implications.
4. Landscaping. Minimise grass, maximise native plants, and plant fruit and vegetables liberally. Minimsing the landscaping means that tenants have less to maintain and fewer headaches for you. You may want to consider planting easily maintained fruit trees. Fruit trees are appealing and will hopefully encourage good neighbourly behaviour -  what do you do with 20 kilos of apples? Which in turn could increase the security of your rental. Adding even one raised garden for planting vegetables encourages garden maintenance and good health.
5. Double-Pane Windows. They trap warm air inside during the winter, and keep cool air inside during summer, combined with good insulation, new windows will make a noticeable difference to energy costs.
6. Flooring. From renewable resources like bamboo, to stained concrete, and engineered hardwoods. All are great alternatives to carpets, which are known to cause trouble for those with allergies.

Starting Small

You don't have to make a statement with only the big ticket items. You can green a property by focusing on a large number of little things, When combined they will make a big difference to your tenants.

1. Use low VOC Paints when repainting. This is great to promote if you are hoping for families as tenants. (VOC -stands for Volatile Organic Compounds which are toxic)
2. Switch out incandescent bulbs for energy efficient light bulbs. Lighting accounts for about 10-15% of an average monthly bill. CFL light bulbs will last much longer too.
3. Wrap the hot-water heater and adjust the temperature. By wrapping your hot water tank with insulated material you will reduce the heat loss. Approximately 20% of energy costs comes from your water heater, if you can't justify replacing the hot water tank with a tankless hot water system, or installing solar hot water, then at least wrap it, and adjust the temperature down a little and sure there are no hot taps dripping!
4. Change all taps and shower heads to low flow. Hold a 1 litre jug under the tap/shower and if it fills in less than 6.5 seconds you are using more water than you need. Slow the flow and hot water costs will drop.
5. Attend to the nooks and crannies. Caulking around windows, weather stripping doors, thermal curtains will all make an impact.
6. Attack Vampire Power and monitor your energy.  More and more people are becoming aware of the power drain of electronics when on standby. Consider supplying some 'smart' power strips to minimise vampire power and installing an energy monitor  so tenants stay aware of their usage.

It doesn't matter if you decide on a few big things or focus on the small things, you must promote, promote, promote! Make a case for your green property, build a story by combining all the features and tell tenants.  If you don't tell them, how are they going to know what a great place they live in? Let them be proud to live in your energy efficient rental.  

Would you go this far?

A year ago Shane Merrick won an award for being Melbourne's greenest landlord.  He installed a greywater system, rainwater tank, solar hot water, energy-efficient lighting and focused a lot on insulation.  Would you go this far in 'greening' your property? How are you going to upgrade yours? 

Thanks for inspiration and information for this article.

www.helium.com

www.good.is

livinggreenandsavingenergy.com

renew.org.au