Greening your property makes money (and sense)
These days improving the environmental performance of your rental property is a smart move for landlords, especially with new regulations coming in that will give homes green star ratings.
Investing in sustainability increases your property's resale value
Soon, landlords will have to disclose information about the energy, greenhouse and water efficiency of their property when they put it up for sale or lease. The new mandatory disclosure scheme will give properties something like a star rating, and is expected to come in in 2012.
A similar scheme has been running in the ACT since 1999, rating houses from zero to ten stars. There, buyers have been going for an energy efficient house over a similar house without the efficiency benefits, bumping the value of greener houses up, often by way more than the cost of the improvements.
A study of their scheme found that increasing the energy performance of a house by one star increased its value by about 3%. This means that spending $1200 on insulation could increase the value of a $400,000 property to $412,000. Soon buyers here will know the star rating of all properties on the market, so investing in sustainability is a smart move.
The government is still in the process of designing the new scheme. More information about this process is available from Consumer Affairs Victoria.
See The Hows - Some high impact options for greening your property for some ideas of things you could do to improve the sustainability of your property, and their approximate cost.
Greening your property cuts your tax
Many of the changes you could do to make your rental property more sustainable are tax deductible. This includes repairs, maintenance and servicing, so covers repairs to hot water systems, heaters, air conditioners and insulation (e.g. if it is damaged or has settled).
You can also claim deductions for capital works expenses and for the loss of value of assets over many years. This means that you can claim for things like:
- replacing a hot water system with a more efficient one, like gas or solar
- insulation
- solar power
- an energy efficient heater or air conditioner
- curtains
- skylights
- clotheslines
- ceiling fans
- water tanks, water efficient toilets, taps or showerheads
- internal doors to help with efficient heating and cooling
- external blinds, awnings or pergolas for shading windows, and
- buying appliances which are energy efficient.
For all the details, contact the Australian Tax Office on 13 28 61, speak to your accountant or read the tax office’s guide to rental properties.
Happy tenants make happy landlords
If you’re not already persuaded by the financial incentives, then consider how this investment will help you retain good tenants. A green property is likely to be warmer in winter and cooler in summer and cheaper to run. Making tenants more comfortable and reducing their bills will make them more likely to stay in your property and keep paying the rent. These factors will also make your property more attractive to new tenants making it easier and quicker to rent out.
It's good for the planet!
Of course the other good reason for greening your property is that it’s doing your bit to protect our environment. Installing insulation can reduce your property’s greenhouse gas emissions from heating and cooling by 45%. Even little things like blocking draughts can save 40 kg of greenhouse gases every year, and cost next to nothing. And installing a 5,000 litre water tank could save 52,000 litres of water, every year. Now that’s something to be proud of.
You can download our 'Why be a Green Landlord' brochure here
Sustainability tips for renters
More Landlord resources
The hows - some high impact options for greening your property
Help your tenants be green too
Stan invested in his rental property
