TOOLS FOR LANDLORDS & PROPERTY MANAGERS
Landlords and property managers are a crucial partner in achieving community sustainability, efficiency, and affordability in the rental housing sector. We rely on these professionals to gather basic details about rentals, and to understand challenges and opportunities that will help make the sector better.
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How to make your property more sustainable and elevate your Smart Living Score
RentLab's Smart Living Score is based on a broad array of property features, including energy and water efficiency, location (walkability, bikeability, greenspace and transit access), waste management practices, and social support for struggling tenants (e.g. access to eviction diversion programs) and more. This means there are many ways of improving your score, your environmental footprint, and the quality of life you offer your tenants.
Most effective measures:
Share information about your property with RentLab: We reward properties just for sharing information! Share info on efficiency and sustainability upgrades already completed OR planned for the future, general sustainability features of your property (including double-paned windows, updated appliances, access to recycling, covered bike parking), utility costs, etc.
Change the way you charge for utilities: Adopt best practices for utility billing, and we'll give you points. More details on this below.
Make basic energy and water upgrades. We reflect these improvements directly in the score and on the property dashboard. If your property is a typical one- to four-unit home, you'll get the best bang for your buck by sealing and insulating the attic and the basement or crawlspace (or adding insulation if there's not enough). For all types of buildings, improving the building envelope (insulation, sealing leaks), evaluating operations for efficiency improvements, and updating old equipment (older than 15 years or so) can do a lot to improve building performance. See this Department of Energy page for information on saving energy in commercial properties. Spoiler alert! Replacing windows is rarely the place to start because the payback is so long.
Upgrade your lighting. If you still use incandescent or metal-halide lighting, an upgrade to LED will pay for itself within three to four years. LED lights are also safer than both metal-halide and fluorescent lighting since they do not contain hazardous materials like mercury.
Explore and participate in local efficiency or incentive programs. Most cities offer bonus points for participating properties through the RentLab platform
Provide recycling services for your tenants, and make it easy. Properties with recycling services onsite earn more points than those without, and you get extra points for making it simple, with multiple collection points for larger properties and educational materials so tenants know what to recycle and when.
Explore installing solar. If you pay the energy bills, solar can reduce your costs significantly, and typically pays for itself in about 10 years. Even if your tenants pay the bills, solar is increasingly popular, keeps costs down, and is a great marketing tool. See more below.
Help connect tenants with eviction prevention and other supportive housing programs, and accept Section 8 / Housing Choice Vouchers. Properties that work with tenants proactively to avoid eviction and attain stable housing score higher.
Rebates and incentive programs to improve efficiency
Nearly all energy utilities, and many water/sewer utilities, run rebate and incentive programs to encourage efficiency upgrades among their customers. These range from cash reimbursements for equipment upgrades, to direct-install programs for lighting and other basic improvements, to custom projects tailored to your building's particular needs. Some require individually metered units, while others address master-metered or common-area improvements. Programs with and without income eligibility requirements are both available. For a partial summary of the programs offered in your area, see here.
In addition, some local governments offer rebate and incentive program that complement the utility offerings. These vary as well depending on your location.
The only way to determine what's available is to check locally - if you're having trouble finding this information, reach out to us at email@example.com.
How to bill for utilities: best practices
The challenge of managing utility bills in rental properties is at the core of the sector's biggest sustainability challenges: the split incentive problem. If tenants pay utility bills, they have an incentive to conserve but little incentive to invest in improved efficiency. If landlords pay the bills, they have an incentive to make improvements, but tenants have no incentive to conserve. It's a lose-win, or a win-lose situation, and it's hampering affordability and sustainability efforts everywhere.
Landlords have a lot of power to create solutions, keep their tenants happier, and keep their properties operating more smoothly, just by altering the way they manage utilities.
For units that are individually metered, you have several options:
The gold standard: Retain control of utility accounts, establish a utility budget per bedroom for each unit, and charge tenants only when that budget is exceeded. This solution has a number of benefits: it enables landlords to track both energy behavior and building performance. It gives landlords an incentive to keep costs down through efficiency investments and operations improvements. And it gives tenants an incentive to conserve in order to avoid exceeding the budget. Our scoring system provides the highest number of points for this arrangement - it's not common yet, but we hope it will become standard practice.
Next best: Retain control of the utility accounts, and charge each unit for its bill each month as part of rent collection. Tenants still have an incentive to conserve because their fees depend on their usage, and landlords can monitor usage behavior and building performance. This arrangement also avoids repeated fees paid to utilities to stop/start utility service, and simplifies the unit turnover process for both landlords and tenants.
Next best option #2: Include utilities in rent. In this scenario, tenants have virtually no incentive to conserve, so it's less than ideal. However, there is a much greater incentive for efficiency improvements, solar investments, etc. to keep costs down. Including utilities in rent also means tenants have predictable bills, which means no bill surprises that may compromise their ability to pay rent.
For properties with master meters (i.e. one meter serving all or multiple units), there are fewer options. From RentLab's scoring perspective, including utilities in rent is the best option under this scenario, and splitting costs evenly among all units each month is the least-appealing option: neither tenants nor landlords have any incentive to try to reduce energy and water use in a situation where costs are split evenly.
Reasons to consider adding solar to your rental property
Not so long ago, adding solar to a rental property seemed out of the question as expensive and unnecessary. Times have changed, though, and between steep reductions in costs and marketing appeal, solar makes sense for some rental properties.
For landlords who pay energy costs, solar can be an easy way to reduce monthly expenses: most installations will pay for themselves within 10 years (far faster than replacing windows), and once installed require minimal maintenance. In some areas, rebates for solar installations can make them even more appealing. Once solar is in, it may make sense to shift some operations - like water heating and stoves - from gas to electric to maximize the benefit of the system.
For properties where tenants pay energy bills, solar can still make sense as a way to stabilize energy costs and leave tenants with more money to keep up with rent; solar can also be connected directly to the meter serving common areas for a more direct impact on a landlord's bottom line.
Regardless of the arrangement, solar has marketing appeal (and will of course boost your Smart Living Score on RentLab) for prospective tenants. When paired with efficiency measures that reduce overall demand for energy, solar can be a practical, impactful part of a long-term property investment strategy.
How RentLab can benefit landlords and property managers
You want to rent your properties to good tenants who stay a long time, and minimize your expenditures while maximizing profits. When tenants turn over, you lose money while the property is vacant, on preparing the unit for a new tenant, on new tenant background checks, and more.
Helping you keep your tenants happy: sustainable, well-maintained, comfortable, and efficient properties make for good marketing, especially when it's easy to tell tenants about the positive investments you've made, and when their utility bills go down instead of up.
Providing positive visibility for the improvements you're already making AND for the less-visible improvements you need to make (like improved insulation or updated furnaces or water heaters) but that don't usually register on the tenant priority scale.
In the current market, it makes more sense to upgrade the countertop than it does to reduce utility costs. With RentLab's transparency tools, we aim to move past just what looks good, and help you retain tenants by improving comfort, efficiency, and affordability.
Have you made positive, sustainable improvements in your property? Wnat to know what to prioritize? Contact us: firstname.lastname@example.org.