Incorporating Energy Efficiency Into Real Estate

[Alex Sloan]

Hi everyone, what are your thoughts on incorporating comprehensive Energy Efficiency upgrades into residential real estate sales and also investment strategies? For example, upgrading all lightbulbs to LEDs, appliances to Energy Star rated, as well as air sealing & insulation. 

- Have folks out there found that there is increased consumer awareness around efficiency? 

- Are there any members who have adopted a practice of installing (or recommending) high efficiency equipment for their units? 

Here are the barriers I typically hear: 

Home Sale:  Avoiding anything that might slow down a sale without significant return (e.g., add'l construction/rehab time). 

Investors: The landlord-tenant split incentive. Why invest in efficiency if tenants are paying the bills. 

For any local folks - I will be working with some home performance contractors in the Bay Area (Concord, CA Contra Costa County) to put on a networking event next Thursday 11/3 to discuss benefits and barriers.

[Michael Gansberg]

Yes @George P., you nailed it! I plan on changing a light bulb once, exactly once, and only once, and saving my tenants money so they can pay me more rent. Also giving them a better living experience with better light quality. I see that you're saving $1.50- but if you value your time, think about that buck-fifty next time you're screwing in that CFL after the last one burns out. While you're doing that, I'll be chilling on the beach.

If you don't get it, don't worry about it, you're not alone. My management often marvels at my motives. In fact I wrote about just such an episode in my book. You'll get the condensed version.

Manager: "Mike, why do you care about putting in insulation and making the place energy efficient?"

Me: "I want to save my tenants money so when their lease comes up, they stick around. That way, I save money too, and you don't have to show the place in one year's time."

Manager: "Aww, forget it, they pay the heating bill, don't worry about it."

Instead of causing a stir with management- which would cost me in other ways- I let management have it her way. Sure enough, the resident complained(ceaselessly, in fact) about the high utility bills, and left at the end of one year. Then I said, "Hey, let's make the place energy efficient so the next tenant doesn't harass you about their utility bills and maybe sticks around for more than a year?"

That's what we did- and our next tenant was there for four years, with nary a complaint about high heating or electric bills. Ahhh...the peaceful sound of silence. Ohh yes, it's so good. Shhh...don't bother me, I'm meditating.