Anyone adding Energy Efficiency into their Rehabs?

19 Replies

Hi, my name is Chris and i am curious if anyone is doing any rehabs with Energy efficiency or Green products included? Also have you experienced any interest from buyers  in this regard.

Thanks Chris

@Account Closed  

A safe, healthy, efficient home is core to our business.  We acquire quite a few older properties and typically set a goal of improving the property's energy efficiency by 40 - 70%.  To-date, our lowest came in at 48% and we have one old Victorian whose consumption improved by more than 75%.

We are working on an acquisition that will have sufficient lot size (~36,000 ft^2) to allow us to eventually replace the existing structures with a 8-10 row house units built to Passivhaus standards.

Roy, i like the fact that your business model is to achieve a safe, healthy and efficient home. I am of the same mindset. I have a hard time with cutting corners and doing sub par work just to get done and make a quick profit.

The homes in my area are all built in the fifties with no insulation and the vast majority have not been updated so its a great time to make them more efficient and comfortable without bringing the cost up to much.

Thanks for the reply.

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@Account Closed  

It's been demonstrated in Europe (thousands of times) and even in the U.S.A. (10s of times) that you can build a house or apartment building to Passivhaus standards for 10-15% more upfront capital cost than base code construction.    Your resultant operational costs will be 70-80% less than a base code construction.

For the life of me, I cannot figure out why we have not made the building code more stringent.  Canada, despite being the home of one of the early efficient home projects in the 1970s which inspired the development of the Passivhaus standard, is a serious laggard in this area.

I think it boils down to money, meaning the cost of energy has not pushed the average person to care about how much energy and water they waste.  

It also has to do what is trendy and flashy. There's no flash in insulation or a tight building envelope. The average home buyer cares about what they can see and show off ( kitchens,baths,flooring etc) not whats in the attic and behind the drywall.

Hopefully these attitudes will slowly change over time!

@Account Closed  

You are spot on.  

Several years ago by sister and her {no ex} husband had a new house built.  In order to get the absolute most square feet they could possible afford, they took the cheapest options the builder offered for windows, HVAC, plumbing, an lighting  {The builders's higher end options were nothing to write home about, from an energy efficiency point of view, either}.    I sat down with them and demonstrated that they could improve the efficiency of the house by over 50% with an 8 - 12 % increase in materials cost or, postpone finishing the basement and actually spend less.  The additional energy savings would pay for finishing the basement in 4 - 6 years.

Needless to say, I was ignored and it wasn't until the electrical bill came the second January in the house that there was an admission they perhaps should have listed. :-)

So far attitudes are such that we cannon demand higher rent for our buildings that have undergone a deep energy retrofit, but we are noticing that turnover is down.  We even had the lady who rents next door to the Victorian duplex we overhauled ask to be notified of a vacancy when she learned they heating bill was almost half of hers.

Updated about 7 years ago

Wow ... typos galore. That opening line should be "Several years ago my sister and her {now ex} husband had a new house built."

Updated over 6 years ago

Wow ... typos galore. That opening line should be "Several years ago my sister and her {now ex} husband had a new house built."

Our main business is building new custom energy efficient homes.  We expanded into building our own rental properties, recently building a super energy efficient duplex.  We thought it would be hard to sell the idea that the tenant's utility bills would be lower.   So we pay all utilities, and that is reflected in the higher monthly rent.  

We knew that our tenants would come out ahead by just paying us a higher rent and letting us worry about the utility bill.  We were disappointed to find that prospective tenants failed to quickly add our competitor's rent and their subsequent utility bills to discover we were the better deal.  It didn't matter their profession or level of education.

Educating our prospective tenants will be our biggest focus on the next project.

I do rehabs with energy efficiency in mind, mostly because it's a passion and a hobby of mine. It also doesn't add a great deal of cost when you have the house opened up already. Unfortunately you are right that most home buyers and the public in general are uneducated about how inefficient most homes are. 

I haven't seen any rehabbers in my area doing or advertising any energy efficient upgrades to there project houses. Until more people are interested in it rehabbers and builders aren't going to go in that direction.

I was thinking about putting a solar unit from Solar City on the roof of one of my duplexes just so I can collect the tax credits then advertise for the residents to save big on their electric bills.

oops meant @Josh Harris 


I know power company offers rebates on energy efficiency upgrades?  ne1 Ever tried?

I got a free programmable thermostat via power company rebate

Our custom home build customers get rebates all the time.  I've found electric cooperatives to offer MANY more incentives than municipalities or "for-profit" electric companies.  However, it may be harder to find rebates for a rental property you own as it's not your primary residence.

I would encourage you to look into your hot water heater.  In our Southern Indiana climate folks spend about as much money over the course of a year heating their water as cooling their home.  Some of the water heaters have awesome warranties, which can be beneficial when one goes out.  We recently installed an electric Rheem Marathon with a lifetime warranty, and a GE Geospring Hybrid which is freakishly energy efficient as it uses a heat pump.

Originally posted by @Josh Harris:

Our main business is building new custom energy efficient homes.  We expanded into building our own rental properties, recently building a super energy efficient duplex.  We thought it would be hard to sell the idea that the tenant's utility bills would be lower.   So we pay all utilities, and that is reflected in the higher monthly rent.  

 Josh:

Could you put some parameters on "super energy efficient"?  Are we talking <=15kWh/m^2 (4746 btu/ft^2) per year; <25kWh/m^2 per year or <50kWh/m^2 per year?

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Maybe I was a little over zealous using the word "super."  We aren't approaching net zero on our rental property.  I think to do that, it incorporates a lifestyle choice and/or alternative sources of energy.  

Honestly, we haven't went through a full year with occupants yet.  But based on the bills that have been coming in as expected and our previous experience I would say the HERS score would be in the low 50's to high 40's.  I can tell you that in September we were about 7.49 kWh/m^2.  Of course, I expect a higher figure in the dead of winter.

@Account Closed

Great to hear you're interested in Green rental properties. We're doing green upgrades and we're near you in Madison WI. We've been trying to form a collective of green-minded apartment owners and tenants to really promote this concept. Contact me if you'd like more info!

@Josh Harris  @Roy N.  

Is there a table or graph or web site calculator somewhere that you could point me to, indicating HERS scores and their correlation to kWh m-2 values? Along with average US scores and the corresponding values? I think a handy visual like that is great to help educate people where they stand. Benchmarks are really important in making change happen.

Google searches so far have only given me pretty dense technical reports. The best correlations are probably going to be separated by state or region. The interactives on hersindex.com are too general.

That's an interesting idea. I haven't heard of anyone doing that. Do you find there is any interest from tenants or fellow property owners?  

I am strictly a rehabber. Haven't seen much in the way of energy efficient rehabbing going on in Chicagoland. I'm sure there most be some interest in it though.

Hi Chris,

There's a lot of interest from tenants. But not much interest from fellow property owners. Therein is the reason why we haven't expanded as much as we'd like.  

We propose that our Green Apartment Network could be a marketing tool for larger property owners, and a community for the smallholders.  Tenants we've asked here in progressive Madison really love the idea. We hope to connect with contractors and rehabbers to provide business. But we're limited because too few landlords and property owners are on board so far.  An interesting marketing problem. I've approached the Business School here about it. So far we haven't come up with ideas. Many larger cities actually starting to require benchmarking for large rental properties. There's a lot written about that topic on the wegowise website blog.  Large property owners are really against that. A mandate it is really the only way - people like us who keep track of energy use voluntarily are uncommon at this point.  But it'll come.

Long-term goal is for brand recognition of the Green Apartment Network - providing value to all kinds of sectors of a market subset. Much like fair trade coffee.

Hi Tanya

That's great that there is interest from tenants on the subject. I guess a lot of building owners only see the money side and want to spend as little a possible on there properties. 

Madison probably in general is more progressive then Chicago. I think in general Illinois is near the bottom when it comes to energy efficiency and renewable energy.

I am encouraged by younger people as there seems to be no argument from them on climate change and they seem a bit more interested on how to change things.

With last years cold winter in Chicago brought  more awareness to homeowners on the benefits of insulation and air sealing on there comfort and gas bills.