Owning Your Tenant’s Electricity
Multi-family property owner’s energy expenditures represent about 9% of total expenditures.
This is the same for both where tenants pay the utilities and where the property owner pays the utilities.
Therefore, it is important to ensure that the building is operating at maximum efficiency to not only improve quality, but also earn significant monetary gains through energy savings.
There are many benefits associated with energy efficiency.
You can nearly eliminate electric bills making the property net-zero (produce as many kWh’s as you consume).
This saves thousands annually.
You can also take advantage of utility rebates, government incentives, and financing options.
With significant energy savings, property owners can create cash flow that can be reinvested in the building or used in other aspects of the property.
There are various ways to increase efficiency for your multi-tenant building:
- LED lights—consume up to 90% less energy than incandescent light bulbs, resulting in much lower utility bills.
- Insulation—cuts the cost of heating and cooling by over 40%. Insulating ceilings can potentially save 20-30% on heating and cooling bills. It takes less time to heat or cool the building that has added insulation.
- Programmable thermostats—make regulating temperature simple, eliminating the need to adjust temperature manually, increasing financial savings.
- Solar (PV) Panels- renewable source of energy. Simplest way to save on energy once the solar panel is installed and is working at maximum efficiency. Generate on-site power for 30+ years and little or no maintenance costs.
There are also many incentives for improving efficiency for your multi-tenant building:
- Tax credits—state and federal tax credits help cut the cost of energy improvement projects. The federal tax is 30% and the state tax varies on each state.
- Utility rebates—vary by each provider and help decrease the cost of the project down.
- Added property value—solar can increase the value of the property.
- Quick payback—most projects see a payback of 5 years or less with an additional 25+ years of cash flow.
Benefits of being energy efficient with your commercial building
With benefits and financial incentives combined, energy management is a must for multi-family property owners. By owning tenants’ utilities property owners can create access cash flow due to significantly reduced energy bills. This way an owner can increase building value, improve quality and comfort, all while taking advantage of all the monetary benefits from energy improvements.