7 Techniques for Enhancing Energy Efficiency in Rental Properties

Paying utilities in an ordinary American house is getting more and more expensive. According to one survey, forty percent of people had to cut back on essential needs to pay their electric bills.

Naturally, one of the first considerations anyone makes (buying or renting) is a home’s running costs. Energy-efficient houses are becoming highly sought after.

Consequently, preparing your rental properties to be as energy-efficient as possible is in your best interest. The better you can demonstrate lower energy costs, the quicker your homes will become and remain occupied.

Read on to discover the seven ways to keep your rental home’s energy bills as watertight as possible.

Perform an External Energy Audit

Find a certified inspector to perform an independent energy audit for each home in your rental property portfolio. Generally speaking, the inspector will perform the following actions:

1. An examination of the insulation, heating systems, windows, and other energy-consuming systems.
2. An analysis of energy usage patterns and energy bills.
3. An assessment of the electrical and mechanical systems within the building.

According to Angi, the average cost of an audit is $436. Before implementing what you think may be suitable for your home, why not ask an expert? Addressing digitalization challenges in energy management can also benefit from expert insights.

Asking a pro is well worth your time and investment because they can discover the extent of your home’s inefficiencies, allowing them to offer tailored recommendations.

Keep their contact information handy, whether shared through a traditional or digital business card, as you’ll want to schedule periodic assessments to maintain optimal efficiency.

For a slightly higher investment, some inspectors will perform an energy modeling and simulation exercise. In this exercise, they run a simulation of their recommendations to predict the potential energy savings.

Thanks to The Inflation Reduction Act, you may be able to claim 30% of the cost of an audit, capped at $150 per tax year.

Air Sealing

Air sealing is the process of closing gaps and cracks in a building to prevent air leaks using materials like caulk, weatherstripping, or foam.

These leaks often occur around windows, doors, walls, or the attic and can let warm or cool air escape. Heat loss makes heating or cooling systems work harder and jacks up energy bills.

The U.S. Department of Energy says plugging air leaks can help you save up to 20% on your bills. These savings increase even more if your rental home is older.

A common misconception about air sealing is that it is unnecessary because the house is insulated. The problem is that insulation does not protect against air leaks. Air leaks bypass insulation and weaken its ability to keep a house warm.

The best thing to do is apply the air seal first to maximize the insulation benefits.

Install Smart Thermostats

As part of any routine renovation, switch out your traditional thermostat for its new, smarter counterpart.

Smart thermostats connect to the home’s Wi-Fi, allowing tenants to control the temperature on the go using their smartphones or other smart devices.

But their intelligence doesn’t stop there. Smart thermostats can learn tenants’ schedules and preferences. They use this data to adjust the temperature automatically. For example, they will reduce the temperature when nobody is home.

Some thermostats can tap into external data sources like weather forecasts to make intelligent adjustments.

Over time, the tenant can extract energy usage reports that detail insights into patterns and identify ways to save on future bills.

Mentioning programmable thermostats as a feature of your rental home would appeal to any tenant. They offer an effortless way to reduce energy consumption without depriving tenants of a comfortable living experience.

Purchase Energy Efficient Appliances

Any appliance with the ENERGY-STAR rating reduces energy consumption without compromising performance. As a result, you get optimal use out of the appliance while enjoying lower utility bills. These appliances also last longer, giving you the most bang for your buck and boosting your rental’s appeal.

The U.S. Environmental Protection Agency is responsible for testing and certifying any appliances ENERGY-STAR rating.

Besides the cost savings, ENERGY-STAR appliances are environmentally friendly because they release fewer greenhouse gas emissions.

So, everybody wins: you, your tenant, and Mother Nature!

Use Thicker Curtains

Not all energy efficiency initiatives need to be complex and technical. Thicker curtains complement existing insulation by:

• Limiting heat loss during the winter
• Blocking sunlight and keeping rooms cooler in the summer–so the AC doesn’t need to run for as long.

It’s a simple adjustment to keep your bills low.

Use Energy-Efficient Light Bulbs

Another effortless change that provides maximum impact is using better light bulbs. LED bulbs are undoubtedly the winner here.

LED bulbs use 75-90% less energy than incandescent bulbs by converting about 90% of electrical input into light.

For example, changing a 50W halogen spotlight with a 5W LED reduces energy usage by 90%. Imagine the impact that could have on monthly bills.

Additionally:

• LEDs last longer
• Due to this longevity, they are a cheaper investment in the long term

Insulation

Every rental property owner should be insulating their home (and probably is). The key question is: Are you doing it correctly?

Always start in your attic (or the ceiling if you don’t have an attic). Heat rises, so a well-insulated ceiling minimizes heat loss in the winter and heat gain in the summer.

The U.S. Department of Energy advises attic insulation is the best place to start insulating to maximize energy savings.

Don’t Forget Non-Home Elements

Energy efficiency upgrades should extend to areas other than living quarters, such as garages or other outdoor spaces. Insulating garage walls, ceilings, and doors, replacing lights with eco-friendly options, and improving ventilation will all have an impact. While these elements will increase the cost of building a garage, they will save you money in the long run.

Final Thoughts

Setting up a home to be energy efficient is time-consuming and brings on pocket-pinching upfront costs (compounded if your property is older).

But you’re into property investments for the long haul, which means you understand the long game and have the patience and intelligence to foresee long-term benefits. So, if you apply your property investment mindset to an energy-efficiency project, you will find that it reaps significant benefits. Namely, it lowers bills for your tenants, which keeps your property occupied for longer and allows rental income to flow.