Hi All,

I am wondering if anyone has used Mass Save for a rental property. We bought a duplex a few months ago and we are living in one unit and renting the other. We inherited the tenant and they are currently paying $500 below market rate. It seems like they are under a discounted rate with Eversource, so we qualify for energy assessment through the fuel assistance program. They just send us an agreement stating that we must not raise rent after the energy audit. More specifically:

"The present rent of $_____ per ____ for the Premises will never be raised because of any increase in the value of the Premises due solely to the energy efficiency work performed under this Agreement.

"The present rent of $____ per ____ for the Premises will not be raised for any Tenant of the Premises for one (1) year after completion of weatherization work performed under this agreement and for two (2) years after completion of any heating system replacement work, both completion dates as certified by ABCD.

I have tried for the last few months to raise my tenant's rent to market rate, but they are just way below and wont pay. They said they will move out when they find a new apartment. I dont think they are actively looking at all. I doubt they could find anything better than they are currently paying since the previous owner of our house did not raise their rent for the past 15 years!

I dont want to lock myself into an agreement that will basically make them stay for another year or two.

The issue is that I am paying for most of the utilities in this house (including the tenant's heating because it is one single heating system). This house is old and extremely inefficient. We paid $250/month in electricity alone. Another $200 in water because we had lead pipe changed to copper and financed it with 0% interest for the next few years. Heating is oil, so that is another $3000-5000 annual expense for oil alone. Gas is about $50-70.

I want to get this house insulated without paying much. Any advice?

Hi @Elena C. - it sounds like you have a few things at play here if I'm understanding your post correctly.

1) It sounds like you are benefiting from reduced fuel prices through the MassSave fuel assistance program but you are not willing to agree to their terms about raising rents at the property? I think that's a decision only you can make. How does the fuel savings compare to the gap between current / market rents - that's your actual opportunity cost IMHO.

2) You mention you've been trying to raise your tenants rent for the last few months. I would strongly encourage you to connect with a local real estate attorney as well as educate yourself about the ongoing state and federal eviction moratoriums which include presenting new leases and/or rent hikes to tenants include those on month-to-month / TAW leases.

3) You mentioned wanting to improve the insulation in the house to make it more energy efficient. Have you checked with MassSave to see if they will do an energy assessment which would include a prioritized list of things you can do? This might be a good starting point for you. Otherwise I would start making a list of what you think is contributing to lack of efficiency (e.g. windows, holes/cracks in foundation or framing, lack of attic insulation, etc) and then starting bidding those out to local contractors you can find on Angie's List or HomeAdvisor. Winter is coming so you may want to move quickly.

Overall, it sounds like many of these items (low rent, high utility costs, etc) caught you by surprise. At the risk of sounding too critical I would encourage you to think about what you could have determined prior to purchasing the property and use it as a learning opportunity for the next one!

All the best,

-Todd

Hi @Todd Wheatley , 

Thank you for your feedback. Just to give an update, I have decided to keep my tenant rent below market rate with a one year lease and have Mass Save do the insulation for free around the house. Hopefully, this will help lower utilities in the long run. I am planning to deduct the utilities via Schedule E together with the mortgage interest and insurance and other repairs I did last year. 

The reason why I am not going to proceed with eviction is because I spoke with an attorney and it seems like a 50/50 chance I will be paying over $10k to get them evicted. Which would not make sense since they are paying me on time just not what I initially calculated. I am making peace with myself already lol.