By: Kayla Matthews
Renters are willing to pay more for energy-efficient spaces, according to new research. The research builds on earlier studies, which showed that properties certified green rented for more than non-certified properties. Both trends seem to hold steady for residential and commercial tenants alike.
Many people these days are looking for ways to protect the environment by reducing their carbon footprint. It's good news for landlords, who may be able to earn money by making money-saving building upgrades.
Why Renters Want Energy Efficiency
Renters' willingness to pay more for energy-efficient spaces is part of a broader trend. In general, buyers and renters consider green buildings — like those with LEED and Energy Star certifications — more valuable.
Energy-efficient and green buildings also more likely to hold on to tenants than less environmentally friendly buildings — good news for landlords, as tenant turnover can be costly.
It's not immediately clear what's driving the trend toward better energy efficiency — whether it's the prospects of saving on utility costs or tenants wanting to take any opportunity to make their lives more environmentally friendly.
No matter what's causing the shift, it's big news for real estate investors and anyone that rents or leases property. Tenants are looking for energy-efficient spaces, and are willing to pay more to get them. Making homes, apartments and office spaces more energy-efficient will secure landlords more in rent.
How to Make Spaces More Energy-Efficient
If you want to capitalize on this trend, you don't need to build a new space from the ground up. You can make most modern spaces more energy-efficient with some straightforward changes.
For example, window treatments can reduce the amount tenants spend on heating by making spaces better at holding on to heat. Other, less costly solutions to the same problem include window insulation and thermal curtains.
LED bulbs can reduce the energy it takes to light a room and generally last longer than traditional bulbs — they'll also shine brighter, too. Keeping an air conditioner unit in the shade during the summer will increase its efficiency and help the unit maintain comfortable temperatures without drawing as much power. Covering bare floors with rugs or carpet can reduce heat loss during the winter.
Exhaust fan covers installed in bedrooms and bathrooms can help reduce heating and air costs. The fan cover will prevent cold air from getting in, as well as ensure warm air doesn't escape.
If you want a high-tech solution that can save money on energy costs, smart thermostats record patterns of use to regulate temperature, saving on energy when tenants are present or need less heating and cooling.
Applying for LEED and Energy Star certifications is another possibility, once your building meets those certifications' standards. While holding these certifications won't increase the energy efficiency of your building or space, they will further boost the value of your property by demonstrating the environmental friendliness of your building to renters.
Increasing Energy Efficiency to Attract Renters
Landlords with energy-efficient spaces can charge higher rent. Whether it's because they want to save on utilities or because they want to reduce their carbon footprint, many renters are willing to pay more for spaces that are energy-efficient and certified green.
Energy efficiency upgrades can drive down utility costs, help reduce a building's carbon emissions and may earn landlords more money in rent.
Luckily for landlords and investors, it's not difficult to make existing buildings more energy-efficient. Simple fixes, like window insulation, LED bulbs and carpeted floors, can result in remarkable savings on utility costs, which can encourage renters to spend more.