If you were to ask most property owners and managers if energy efficiency is important to resident retention they would probably say yes! The savings to renters or owners who pay for the energy costs, could be as much as 46%. When resident receives this kind of a break in cost, they are more likely to resign their lease. The problem is that many owners and managers of apartment communities do not know how to implement a plan of action for energy efficiency.
Each year, more than $1 billion in rebates and incentives is available for you to make your income properties more energy efficient and profitable. These are available through federal and state agencies, not-for-profits, and many other sources. To gain this “free money,” you need to consider projects that are not your typical “retrofits”. These would include:
- Resident fit-outs (corporate apartments/business venues)
- Remodeling (small or large-scale)
- New constructions or add-ons
In some cases, you can gain a subsidy if the construction relates in any way to energy or water efficiency, i.e. new sewer lines. Particular rebates might even be applied after the fact.
There are different ways to obtain the information.
- Call utilities, state energy offices, relevant sources
- Internet
- Commercial database
Most importantly certain mechanisms need to be in place in order to capitalize on resident retention through energy efficiency.
Know Your Properties
- Have your properties ranked according to Energy Star benchmarking; utility rates, energy intensity, anticipated holding period, and availability of money for improvement.
- Know which operating best practices have been implemented at each of your properties.
Claim Your “Free Money”
- Capture all of the rebates and other incentives you are entitled to when doing capital expense analyses or reports.
- Seek rebates for resident fit-out, remodeling, and other new construction. Do not just consider energy/water projects. Also, screen your recent capital expense report for retroactive rebates.
Make Rebate Screening a Best Practice
- Any energy-, gas-, or water-related capital expense proposal must have a rebate report attached to it. Make sure the filings are double-checked (and applied) for any additional rebates that are relevant to your project.
Find and Fund the Best Upgrades
- Decision-making should go beyond simple payback period. Consider the leases, appraised value, and other relevant factors in the approval process.
- If you have finite access to capital, fund projects that represent the highest rate of return first.
Make Owner/Renter Cost/Benefit Analysis a Best Practice
- Any capital expenditure that is proposed to reduce operating expenses must have a cost/benefit analysis report showing the owner’s share of projected savings and the owner’s return on investment attached to it.
For further information or ideas contact us.
