Is your rental property energy efficient?
Australians have a big taste for property investment. According to the Australian Bureau of Statistics, the value of commitments taken out for an investment property has grown 6.4 per cent during March 2015 and the enthusiasm for homes is showing little sign of cooling down. Whether it's for long-term gain, or to support your current lifestyle, a rental home can be a great way to grow your wealth - but have you thought about how energy efficient your property is?
While your tenants might be footing the utility bill from electricity suppliers, cutting down on electricity consumption can actually enhance the return you get from the rental. Tenants can rest easy that their bills will be more reasonable, which might mean longer occupancy and lower maintenance costs. In the same vein, it can actually increase the marketable value of your home.
It doesn't always need large amounts of capital, either. There are plenty of inexpensive things you can do to improve your investment's energy efficiency.
Energy use depends largely on the number of people in the household, the appliances you've installed, as well as the tenants' practices. To offset rising electricity prices, simple changes could make a big difference- for instance, switching to compact fluorescent bulbs doesn't require any changes to light fittings, but could cut renters' electricity bills significantly.
Fix leaky taps, wrap hot water pipes with foam insulation, and ensure the thermostat on the property's electric hot water cylinder is not using energy unnecessarily. For a continuous hot water system, the figure should be set at no more than 50 degrees, according to the Department of Industry and Science.
In a country prone to temperature extremes, a good HVAC system is an absolute necessity - but it can also cause a household's electricity bill to balloon, particularly if the existing technology is inefficient. According to the Department of Industry and Science, these appliances account for up to 40 per cent of a household's average energy use.
As well, even if you replace it with a better machine, a home without proper insulation, as well as draughty windows and doors, can undermine all the money saved. Think about it this way - during a blazing summer, up to 60 per cent of heat infiltration can occur through your ceilings and walls, according to the South Australian state government. Renewing or installing all new installation makes your investment a much more comfortable place for tenants to live in.
Bringing these features up to scratch might need a bit more investment than others, but remember: Your efficiency project could be eligible for tax deductions. The Australian Taxation Office outlines that you can typically make a claim for maintenance, repairs of servicing costs, or for capital improvements.
If you or your tenants are concerned about energy bills, a switching service like Make It Cheaper can lend a helping hand. Our experts can examine the charges, do an electricity comparison and find you the best deal.
Posted by Richard West