Why it’s worth cutting investment property energy costs

If you plan to upgrade or improve your investment property this year, have you thought about energy costs? They are on everyone’s minds right now and can be a great way to improve your property’s value and its appeal to tenants.

What are the benefits of upgrading your property?

While many of the rebates around energy efficiency are for owner-occupied properties, there are still many good reasons to upgrade your property with energy-efficient features. First, it increases the home’s value, should you decide to sell. Secondly, it’s a good incentive for many tenants who will appreciate the cost savings and will choose your property over others. And thirdly, it’s great for the environment to reduce a home’s energy usage, whether by sealing windows and adding insulation or by making bigger moves, such as installing solar panels.

What are the best upgrades to consider

• Adding solar panels: in sunny Sydney, solar panels are always a good idea if you have roof space. This appeals to tenants because it will help to reduce their electricity bills. It also adds value to your home when it comes time to sell.
• Upgrade the hot water system: These days newer model hot water systems are far more energy efficient which, once again, saves on electricity costs for your tenants. You could even consider installing a solar hot water system. These systems are highly efficient and save a fortune on energy bills.
• Adding water-efficient taps and showing fittings. This not only saves on water bills, but using less hot water saves on energy costs as well.
• Installing energy-efficient appliances: If your investment property has a dishwasher and/or a washing machine, consider replacing these with more energy-efficient models. Look for the star rating on the appliances when you’re purchasing them and buy the most energy-efficient ones that you can find. You’ll need to upgrade everything at some point, so it’s about choosing the best energy-efficient models when the time comes.
• Installing awnings and blinds on windows: These not only look great but are also useful in a hot climate to cool the home’s interiors for free rather than blasting the air-conditioning.
• Add insulation to the ceiling: If your investment property is older, it may not have insulation in the ceiling, and this can make a big difference in keeping the house cooler in summer and warmer in winter.
• Consider installing weather-sealing strips around windows and doors: Once again, an older house may have small gaps around the windows and doors that let cold air in during the winter and let the cooling air inside escape in summer. Weather-sealing strips are fairly inexpensive and can make a big difference to the temperatures inside the home.

What about tax deductions?

You should always chat with your accountant about how to claim capital expenses that improve your property, as opposed to repairs and maintenance that can be claimed immediately.

But as a general rule, looking after your property should always be your priority with an investment, as this protects its value and means it will be easier to find good tenants. These days, good tenants are savvy and look for ways to save on their accommodation expenses as well as their utility bills.

And, energy costs are first and foremost on everyone’s mind. Not only to save money but also to reduce our carbon footprint.

Thinking of investing in Neutral Bay property? Talk to us

As always, we’re happy to chat with you about the rental market in Neutral Bay, what tenants are looking for and how you can make the most of your investment.