Renting or leasing out your property can be rewarding as it generates a passive income. Meaning, you don’t have to go to a regular 9-5 or let a boss control your time.
But, as in other businesses, the cash flow may fluctuate especially if the rental agreement states that you, the building owner, must cover the utility bills. If this is the arrangement between you and your tenant, there’s a way to keep more of your rental income intact — and that is to make your building more energy efficient.
Proper insulation prevents energy leaks from attics, walls, and floors. But, because 90% of homes in the US are under-insulated, people don’t benefit much from their insulation.
To improve your building’s insulation, first, assess which part of the property has poorly-functioning insulation. Contractors can also help you evaluate which type of insulation is ideal for the building. If your building is located in a humid area like Kansas City, spray foam insulation, A+ Insulation suggests, does a great job at sealing cracks in walls, ceilings, and crawlspaces. This way, your building’s air conditioning system does not have to work extra.
Install Solar Panels
With solar panels, you don’t have to worry about high energy bills and power outages. The sun gives more than enough energy for solar panels to convert to electricity or heating. This means you can significantly reduce your energy bills. Although such a project may require a large initial cost, solar panels can help you save in the long run. In addition, this sustainable energy option also gives you a 30% federal solar tax credit.
Switch to LED Bulbs
The average, traditional incandescent light bulbs convert 90% of their energy to heat instead of light. On the other hand, light-emitting diodes (LED) bulbs are about 80% more energy efficient.
When choosing lighting for your building, look for bulbs that have the Energy Star rating. Aside from LED bulbs, halogen incandescent bulbs and compact fluorescent lamps are energy efficient lighting choices, according to US Department of Energy.
You can keep more of your rental income by making smaller adjustments, such as choosing energy efficient appliances, or by applying bigger changes, such as redoing your insulation. You can also encourage your tenants to save on electricity use.