Solar for a Rental Property

[Daniel Kitt]

Hi Everyone, 

We are getting ready to rent out our primary residence as we search for a new home. We have paid off solar on our current residence that powers the entire home. We are planning to leave it on when it becomes a rental. I am curious if any landlords have been in this scenario before and how you charged your tenants for the solar. 

[Chris Seveney]

@Daniel Kitt

I would increase the rent payment because of the solar and let them use it, easier than billing them back for usage.

[John Underwood]

Quote from @Chris Seveney:

@Daniel Kitt

I would increase the rent payment because of the solar and let them use it, easier than billing them back for usage.

 I agree. This seems the only logical choice.

[Nathan Gesner]

Quote from @Daniel Kitt:

I'm with the others. Increase the rent so that you get some benefit and keep it low enough that the tent still gets some benefit. 

[Rick Albert]

I would look at the comps and go from there.

Not all tenants think about utility costs and therefore you could be pricing yourself out. For example, let's say rents are typically $3,000 for a house. With solar you are asking $3,100. Now any tenant who is only searching up to $3,000 won't see it, even though it would work for them.

Another option is to charge a base rent and then do a utility fee. For example, $3,000 and a $100/month electricity fee. I did a water fee on my back unit. Less hassle and still get a bigger pool of tenants.

[David Friedman]

I would not increase the base rent to include the solar. I would include it as a separate fee that you mention in the listing. If you were quickly scrolling through zillow as a renter and saw an exact replica of your house for lease, but yours was priced $100 higher, you would probably skip it. Don't expect most tenants out there to deep dive on why they should pay more to rent your house because it has solar. Market it at comparable rent in the area and add the $100 or so per month as an additional fee.