Recently there was a discussion in our Property Investment Forum about energy efficient homes. The questions being asked were, how many developers actually consider energy efficiency when renovating, is it worth the money, and will it add any value to the property?
My response to the subject was pretty cavalier. In retrospect, my stance on the issue was all wrong, but I learned from my mistake. This is what I said (and once believed):
I only do buy-to-let, and my tenants pay their utility bills, so I don’t bother kitting the places out with energy efficient products. Probably not the best attitude.
I was hit back with this response:
Our landlord obviously thinks like you Mr.
We have 7 x 60Watt downlighters in our hall & kitchen where 3 would be sufficient. A combi boiler with no thermostat so the heating is on constantly (although we turn it on and off ourselves) over 1 inch gaps here there and everywhere, the front windows are single glazed… I love a good draft me.
I could go on forever… and it pisses me off because I’m the one who pays all the utility bills!
Hmmm….what she said actually hit home. I felt bad. But to be honest, the properties I own are all pretty modern; they have double glazed windows and modern heating systems. However, if I ever were to buy an older property that is inefficient as a wet paper bag, i’d definitely make changes to improve energy efficiency. I’m not saying I would necessarily dig deep into my pockets and get myself into further debt (this is a business afterall), but I am saying that I would make appropriate steps to ensure some level of efficiency. One thing is for sure, I certainly wouldn’t want to be responsible for providing unsuitbale living conditions as the guy in the forum mentioned. I have too much of a conscious for that.
Is being enegery efficient worth the money?
The recent hike in inflation is currently hitting pockets hard and it’s becoming more apparent than ever before. Commodities like fuel, groceries and utility bills are rocketing; people are starting to notice. Even I’m noticing that petrol is significantly more expensive than it used to be, and it’s scaring me. For the first time in my life I’m actually starting to selectively choose which petrol stations I fill up in, based on price. Before I wouldn’t even take notice of the price board, I’d just roll up into any ol’ station with my music blaring. Similarly, over time tenants will start to notice the size of their utility bills. Even worse, if you, as a landlord, are responsible for the bills, you’ll feel the pinch.
Whether it be to save yourself a few quid, or your tenant, it’s definitely worth it. If I was a tenant, I would most certainly look for properties with double glazing and a decent heating system. And in all honesty, i’m not a picky bastard. So I’m guessing other people will be on the same level. Essentially, energy efficiency can be a desirable feature, and I get the impression it’s going to get more and more desirable as people are starting to feel the pinch…
Will it add value to the property?
Major energy efficient features likes double glazing windows will almost certainly add value to your property. However, features like energy efficient light bulbs won’t make any difference. But don’t let that sway you in the wrong direction, because those efficient light bulbs can add value in a different way. As I said, by adding energy efficient products into your property, you’re making it more desirable for prospective tenants and that is adding value.
One particular forum member raised a very good point about HIP (Home Information Pack) reports and energy efficientcy. By taking into account small details you’re ultimately making your HIP report look a lot more rosey, consequently more appealing to the buyer/tenant. Small changes make big differences, such as ensuring all appliances in the kitchen are “A rated”, lightbulbs are energy saving, LEDs are used instead of downlights, and using a low flush toilet, and also replacing an old boiler with a combi. It’s the small changes, people!
Being a landlord isn’t JUST about making money. Of course that’s usually the main incentive for being a landlord, but it’s not what being a landlord is all about. As a landlord, I’m providing someone with a “home”, not a property. It’s my responsibility to make it feel like a home to the best of my ability, with in my responsbility zone.
Give your tenants a nice place to stay, treat them with respect, and you’ll naturally begin to taste the fruits of being a good landlord.
As a landlord or developer, do you take enegery efficiencty into consideration? No? Well, it’s about time you did. For your ease, here’s an article on, “Tips On How To Make Your Home ‘Green’“. If you’ve already taken steps to be a little greener around the home, I’d love to hear about it…keep me informed!