An Environmentally Friendly Rental Home Saves Money and Attracts Tenants
By: Tom Brady
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 rental market are wise to take steps to attract the younger demographic that is their target market. Surveys show that “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.
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 carbon footprint and is taking steps to make it smaller.
Inexpensive Environmentally Conscious Fixes Around the House
- Save water by fixing 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 the city or town where you live does not have a program set up, there are usually other options to drop off recyclables.
- Install a smart meter. These thermostats can be programmed so that they only turn on at certain times of the day — for example, beginning to heat up just before you get home, and shutting off an hour or so before you leave the house.
- A clothesline uses a lot less energy to dry clothes 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, pull back the shades to help heat the house.
- Plant native species in the garden instead of grass. Properties that have 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. They 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.
Moderate Spending Can Save a Lot on Water and Energy Costs
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 tenants.
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 5 to 8 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 showerheads, which dispense 2.0 gallons or less per minute, can cost about $30 upward 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 showerheads.)
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 number of moderately priced investments that will make a home more eco-friendly:
- Install low-flow showerheads and low-flush, energy efficient toilets. The U.S. Environmental Protection Agency recommends looking for the WaterSense label on showerheads, faucets, faucet accessories, and toilets to help you identify models that save water and perform well.
- 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.)
- Install a tankless hot water heater. Also known as on-demand or instant hot water heaters, these appliances only expend energy 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.
- Insulate, insulate, insulate. The EPA estimates that homeowners can save an average of 15% on heating and cooling costs (or an average of 11% on total energy costs) by air sealing their homes and adding insulation in attics, floors over crawl spaces, and accessible basement rim joists.
- 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.
- Skip the hardwood floors. Concerns about deforestation has 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.
- 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.
More Expensive Improvements, 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 as opposed to retrofitting 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 this year and 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 a heat pump, which acts as a furnace and air conditioner. It is cleaner and vastly more efficient than conventional systems because it does not burn fuel to generate warmth, it just 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 renovating walls, floors or countertops are greener and also growing in popularity. Cabinets are among the priciest items for a kitchen redo, so try searching for salvage shops that might have them in excellent condition. Before taking a sledgehammer to the walls or cabinets, figure out what can be reused in the reconstruction process. 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.