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An environmentally friendly rental home saves money and attracts tenants

Renovations & maintenance

Converting a house into an environmentally friendly structure does not necessarily require installing an elaborate solar array on the roof or adding space-age construction materials — though expensive projects have a bigger impact on the environment and can bring significant savings on energy costs over time. 

In many cases, small improvements and some changes in behavior can help a property owner go green and save money around the home.

Landlords in the single-family residential (SFR) real estate market are wise to take steps to appeal to the widest demographic possible, including millennials. 

“Younger generations are more likely to feel ashamed (‘very often’ or ‘often’) about living lifestyles that are unhealthy and are not environmentally friendly" compared to their older peers, according to GlobeScan's 2021 Healthy and Sustainable Living study. 

So a rental property that has a compost bin in the backyard, or a clothesline hanging alongside the house, offers visual clues early on to prospective tenants that the owner is thinking about the property’s carbon footprint and is taking steps to make it smaller.

Inexpensive fixes around the house

  • Fix all leaky faucets. A leaking faucet wastes about three liters of water a day.
  • Install energy-efficient light bulbs. LED bulbs draw less electricity and last longer than comparable bulbs, up to 20 years in some cases.
  • Put a compost bin in the garden for food scraps and lawn debris. According to the U.S. Environmental Protection Agency, up to 30 percent of trash that goes to landfills is kitchen and yard waste.
  • Recycle paper, metal and glass. If a city or town does not have a program set up for picking up recyclables, there are usually other options to drop them off.
  • Install a smart meter. These thermostats can be programmed so that they only turn on at certain times of the day — for example, turning on heat or air conditioning just before you get home, and shutting off an hour or so before you leave the house.
  • A clothesline uses a lot less energy than an electric dryer.
  • Conduct a home energy audit and seal any leaks around doors, windows or the foundation around the property.
  • Put in window treatments, shades or drapes that help keep the heat and cool air inside. When the sun is out in winter, or summer sun is heating up, pull back the shades to maintain the house’s core temperature.
  • Plant native species in the garden instead of grass. Properties furnished with plants that fit that local climate save on water and landscaping costs.
  • Set up an online payment system for tenants, which saves on paper costs and postage.
  • Clean the coils on the refrigerator regularly so that it runs more efficiently and uses less energy.
  • Install an epoxy floor in the garage, which will repel stains and make it easier to keep clean. Epoxy-covered floors are also very durable.
  • Encourage tenants to use eco-friendly cleaning products. One way to do this is to leave a supply of them at the property on moving-in day.

Going a step further and installing smart home features throughout a property can lead to greater energy savings in the long term, though the upfront costs will generally be higher.

Spending a little to save a lot 

In some cases, especially when a rental is turning over or an owner is preparing a new property for rent, there are some renovations that can be done for a reasonable cost that will push energy savings higher, and raise an owner’s green credentials among prospective renters.

Spending anywhere from a few hundred to a couple thousand dollars on a project can have a significant impact and pay for itself over time. For instance, showerheads installed before 1992 rain down from five to eight gallons a minute, but the industry standard is now 2.5 gallons per minute. (California has the strictest standard in place with a limit of 1.8 gallons a minute.) 

Today’s low-flow shower heads, which dispense two gallons or less per minute, can cost from $30 up to $300 for the fanciest and most energy efficient, and decrease water consumption by up to 40 percent a year. (There are various online guides to the best low-flow shower heads.)

If a home is located in a state or city with expensive water rates (and again California is among the leaders in this category), the cost of buying new bathroom fixtures can be quickly recouped. 

Also, a home with energy and water saving upgrades can be marketed as environmentally friendly, which appeals to young renters.

Here are a seven moderately priced investments that will make a home more eco-friendly: 

  1. Install low-flow showerheads and low-flush, energy efficient toilets. The U.S. Environmental Protection Agency recommends looking for the WaterSense label on shower heads, faucets, faucet accessories, and toilets, which identifies models that save water and perform well. 

  2. If a home needs new appliances, look for brands that have the Energy Star label. (A new refrigerator should have a built-in water filter so that tenants can avoid bottled water.)

  3. Install a tankless hot water heater. Also known as on-demand or instant hot water heaters, these appliances expend energy only when the hot water is turned on. (Hot water tanks rely on a continuous energy flow.) They cost more to install — $3,000 vs. $900 for a tank — but are a greener option because they last twice as long as traditional hot water heaters, use less energy and need less space.

  4. Insulate, insulate, insulate. The EPA estimates that homeowners can save an average of 15 percent on heating and cooling costs (or an average of 11 percent on total energy costs) by air sealing their homes and adding insulation in attics, floors over crawl spaces, and accessible basement rim joists.

  5. Invest in double-paned windows. Energy loss attributed to windows accounts for nearly 25 percent of the annual heating and cooling costs for the average American home, according to the Department of Energy.

  6. Skip the hardwood floors. Concerns about deforestation have some homeowners considering different solutions if a floor needs to be replaced. Some green options include bamboo, polished concrete, and cork, which is a relatively new entry in the flooring world.

  7. Hire a sustainability consultant. These professionals can advise a homeowner on all types of projects, from water savings to energy efficiency to eco-friendly improvements.

Bigger projects, and a bigger bang for the bucks

Substantive changes to a property to turn it into a true eco-home can be expensive and cause disruption. This is especially true when retrofitting an older home. 

For new construction, incorporating an environmentally conscious approach can be part of the planning process. For instance, it’s easier and less expensive to install a maximum amount of insulation as a house goes up than it is to retrofit insulation into an older structure.

These choices depend on what a homeowner can afford as well as calculations about how long it will take to recoup the investment on major projects. With that in mind, consider these questions:

Is it time to go solar? 

Installation of solar panels and systems can cost from $15,000-$25,000, depending on the size of a home. When considering solar, take into account the size of a home’s electric bill, its location and the tax break associated with a system. 

States like California, Arizona, Texas and Nevada that average more hours of sunlight a day are usually better candidates for a solar system. There is an online calculator that can estimate the efficiency of panels in your area. 

In addition, there are federal tax breaks for solar systems. A tax credit, or a dollar-for-dollar deduction, of 26 percent is in place for solar photovoltaic (PV) systems installed in 2022. In 2023, the tax credit drops to 22 percent.

Is a geothermal system economically feasible? 

A geothermal system saves significant energy costs by using long loops of underground pipes filled with liquid that connect to aheat pump, which acts as a furnace and air conditioner. 

It is cleaner and vastly more efficient than conventional systems because, instead of burning fuel to generate warmth, it transfers heat from the ground to a house. However, the upfront costs for drilling and installation are very high — from $30,000 to $50,000 for the average home. Geothermal systems also qualify for the 26 percent tax credit in 2021 and 2022.

Is reclaimed as good as new?

Reclaimed materials for kitchen renovations are greener and also growing in popularity. 

Cabinets are among the priciest items for a kitchen remodel, and salvage shops often have some that are in excellent condition. Renovation Angel, which is based in New Jersey, has a national footprint and has prevented some 50 million pounds from being sent to the landfill while repurposing hundreds of kitchens.

Before taking a sledgehammer to the walls or cabinets, property owners should figure out what can be reused in the reconstruction process, and what can be donated. A donation can be taken as a tax writeoff.

That way less will be sent to the dump and less will be spent on new materials, and less energy will be expended to make those new materials.

When it comes to driveways, think green

Most driveways are impermeable surfaces that direct stormwater runoff, along with their accompanying pollutants, into drains that flow into lakes and streams.

Asphalt and concrete are the primary surfaces guilty of not allowing rain to percolate through the subsoil to remove impurities and chemicals.

Grass, seashells, hemp-based bricks and solar panels represent a new generation of driveway surfaces, one that takes a more eco-friendly approach to a utilitarian home amenity. 

“By allowing the rainwater to flow naturally back into the ground, they reduce pressure on stormwater systems, and prevent water and pollutants from flowing back into our rivers and streams,” said Joe Raboine, director of Residential Hardscapes at Belgard, an Atlanta-based company that makes permeable pavers and other solutions. 

The wildest idea calls for seeding the area with fungi, though that grow-your-own version is in the future. The idea is that those mushrooms will grow into a hard surface, not a side dish for dinner.

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