Renewable energy technologies are pushing forward, but the U.S. only harnessed 0.2% of the renewable energy potential available in 2020. For landlords, slapping some solar panels on your rental property goes past the eco-friendly benefits and becomes a financial game-changer.
Should you consider solar panels for your rental property? The answer: a resounding yes! It’s not just about saving the planet; it’s about boosting that property value, slashing those energy bills, and leaving your competitors in the dust.
Solar panels on your property aren’t just an upfront cost but a long-term investment strategy. Tax deductions, claiming RECs (Renewable Energy Certificates), and more benefits over the years.
Solar panels: The best way to up your investment game
Installing solar panels on your rental property isn’t just a power move; it’s a smart financial play that keeps on giving. Let’s talk benefits:
- Installing solar panels doesn’t just make your property eco-chic; it’s a serious booster for its value. Reports say it could add up to a cool $15,000 to your property’s value.
- Decreased energy costs are a huge benefit of no longer just relying on the grid. You’re producing your own electricity, giving your wallet a breather from those hefty power bills. Any excess electricity that is generated can be sold back to the energy retailer.
- Solar energy is the renewable hero of the power world. When your property is powered by the sun, you’re not just saving money; you’re slashing that carbon footprint.
- One of the biggest benefits of installing panels is the Solar Renewable Energy Credit.
How to find the right solar panel installer
It’s always best to find an Approved Seller. These folks have sworn allegiance to some consumer protection standards and only roll with designers and installers that have been vetted.
And here’s a pro tip: toss your net wide and grab multiple quotes for a little show-and-tell. Plus, scroll through those online product reviews. Approved installers installers aren’t just winging it – they’re working with the industry’s best practices. They whip up safe, reliable systems that meet your expectations!
Turning your rental property into the ultimate tenant magnet
Solar panels create an eco-friendly haven, but they also create the opportunity for you to become landlord-of-the-year with your tenants.
When they can comfortably heat and cool their home at an affordable price, they’re more likely to stay around. Translation? Lower vacancy rates for you. It’s like a win-win scenario – your tenants save money, and you maintain a steady flow of rental income.
The solar tax perks to the landlord party
While tax rules may vary in every location, the general gist is that solar panels are not just a property upgrade; they’re a capital expenditure item. What does that mean for you? Well, it means you can sweeten the deal by writing off the cost of those shiny panels as depreciation over 20 years or so.
For example, you may be able to claim a 10% decline in the system’s value each year using the ‘diminishing value’ method. So, if you have a $6,200 solar system, you could be claiming $620 in the first year, $558 in the second year, $502.20 in the third year, and so on. Crunch the numbers over a decade, and you’re looking at more than $4,000 worth of deductions. These deductions can help offset the tax payable on the extra income from raising the rent.
What if the tenant wants to install panels on the rental property?
The short answer is that they probably shouldn’t. When you’re the tenant, installing solar panels on your rental property might sound like a great idea, but the financial reality often doesn’t sing the same tune.
Why? Because once you pack up and move out, those sun-soaking marvels still belong to the landlord. So, your pockets might be a bit lighter, and your energy dreams might fade with the sunset.
There’s always room for negotiation, of course. Tenants can chat it out with the property owner and see if they’re up for investing in a solar system. Perhaps something can be included in the lease agreement to sweeten the deal for the landlord; they increase their property value, and the tenant pays cheaper electricity bills—the benefits are everywhere and for everyone.
What are some other ways to make life easier for landlords?
The RentRedi mobile app streamlines tasks for landlords into a sleek, comprehensive dashboard. Our all-inclusive landlord-tenant app helps landlords go mobile and manage their rentals, be it one or many, from wherever, whenever.