energy efficient rental property

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Have you ever thought about how you can you make your rental properties stand out in your market?

What can you do to attract the best, most responsible, most reliable renters in the areas you serve?

A lot of landlords don’t pay much attention to their market competition, but as in any business, there are always competitors (i.e. – other properties that look better, are safer, are in better locations and cost less for renters).

If you want to rise above the other competing properties in your market and get noticed by the renters you want to work with (you know… the kinds of people who will take good care of the place and pay on time), it’s important to make your properties more appealing, preferably – in ways that won’t break the bank.

One way landlords can make their properties stand out from the crowd is by going green, improving energy efficiency and reducing electricity bills.

By making a few key replacements, landlords can check off SEVERAL marketing boxes.

Energy-efficient real estate can be marketed as “green homes”, which can go a long way for the growing number of socially responsible consumers. Even though you may or may not place a high value on eco-friendliness, for many renters, it’s a high priority.

Perhaps more importantly, there are a lot of financial gains to be had for renters who live in an energy-efficient property. As a landlord marketing an energy-efficient rental unit, you can offer side-by-side cost savings analysis, you can offer to cover the cost of utilities, or you can include them up to a monthly ceiling amount (all while asking higher rent, of course).

Intrigued yet?

Here are nine ways to make your rental property more energy-efficient, to lower your electric bill and make your rental even more irresistible. Best of all, most of these property upgrades are inexpensive, more ideas for property upgrades costing less than $1,000!

1. Install a Smart Thermostat

This is a no-brainer; it’s chic, trendy, modern, and saves money.

Depending on which thermostat you choose, it can even be relatively cheap – you can pick up a smart thermostat for well under $200 per unit.

Nearly half of the average American household’s energy usage comes from heating and cooling, which makes climate control a prime target for streamlining.

Nest cites several research studies done on its thermostats, demonstrating a 10-12% reduction in energy usage for heating, and a 15% reduction in energy for cooling. In an average year that came to $131-145 in savings per household, which means that within 18 months or so, a smart thermostat can pay for itself.

RELATED: Nest Thermostat E: First Thoughts and Impressions

Besides, you’ll get to boast smart home credentials, alongside your green home and money-saving credentials. Win, win, win.

2. Install Storm Doors

Because climate control is the hungriest energy-eater, it demands more attention than just the thermostat. In fact, more than half the items on this list focus on slashing heating and cooling costs.

Enter: Storm Doors. (Pun intended.)

According to the U.S. Department of Energy, storm doors can cut energy loss by as much as 50%. Half!

They also last 25 – 50 years, and cost as little as $75.

For maximum flexibility, install storm doors with sliding glass, that can be opened to convert the door to a screen door in spring and fall.

When you consider the cost and benefit, these are a no-brainer.

3. Seal Up Leaky Windows

Ideally, you want multi-paned, maximum energy-efficient windows. If your windows are old and drafty, consider replacing them.

RELATED: New Windows On A Rental Property – Does It Make Financial Sense?

Windows are one of the greatest energy leaks in most properties, but not every landlord has thousands of dollars sitting idly by to replace all their windows. If you’re not ready to go that far, try some less-expensive remedies, like adding weather stripping around the frames (if your windows don’t already have it).

Often, older windows cause settling in the plaster or drywall, creating cracks where air slips in and out. You can use silicone caulking to seal these up quickly and cheaply.

If your window panes are older, they’ll also leak energy like a sieve. You can apply perfectly clear shrink film to windows nowadays, which is inexpensive and helps prevent energy loss through the glass itself.

4. Install Fiberglass Attic Insulation

Sound expensive? It may not be as cheap as silicone caulk, but it also comes with some serious return on investment.

According to last year’s renovation ROI report by Remodeling Magazine, new fiberglass attic insulation delivered the best bang for a property owners’ buck, returning 107.7% of the cost when it came time to sell the property.

The average cost was $1,343, while the average bump in property value was $1,446. And that value translates to higher rents if you can demonstrate to prospective renters just how much they’ll be saving on utilities compared to your competitors’ units.

5. Semi-Annual HVAC Service

This shouldn’t be a news alert, but just in case you didn’t already know…

Furnaces and air conditioning condensers lose efficiency (and quickly) if not serviced often.

Yet landlords continue to ignore their furnaces and AC condensers until they become a huge and very expensive problem.

Every September or October, send an HVAC pro out to each of your properties and have them service the furnace. Every April or May, send them out again to service the air conditioning condenser.

They’ll tighten connections, clean coils, lubricate parts, replace failing components, and ultimately extend the lifespan of your furnace and air condenser.

Most importantly, they’ll catch small issues before they become a crisis.

And make no mistake – a furnace failure in February is an emergency, especially in colder climes. Emergencies are not only stressful, but they’re also expensive because you’re at the mercy of the contractors who are available. Pipes can freeze, inconveniences can spiral into disasters, and tenants can break their leases (or demand to be put up in a hotel).

It’s not pretty.

With all that said, tenants bear some responsibility here as well (or they should, anyway). Make sure your lease agreement includes a requirement that tenants replace the air filter every three months, and failure to do so constitutes a breach of the lease.

Dirty air filters put a massive strain on your HVAC systems, causing them to wear and break down much faster.

6. Replace Appliances with Energy-Efficient Models

Before you go out and start swiping plastic left and right, let’s qualify this suggestion with,

“as your old appliances die.”

Appliances meeting the Energy Star requirements by the EPA use 10% – 50% less energy than their power-hungry peers. While that’s admittedly a wide spectrum, if you can find affordable appliances that use only half the power, that translates to some pretty hefty savings for you or your renters.

Do your homework when researching appliances, and always keep one eye on the short-term cost of the appliance, and the other on the long-term energy cost savings.

7. Switch to LED Lights

Everyone knows LED and CFL lights are far more energy-efficient than the old incandescent light bulbs. But do you know just how much better LED lights are than CFL bulbs?

LED bulbs release almost all of their energy in the form of light, rather than wasting it on the heat.

An average LED light heats to only slightly above room temperature (87° F / 30° C), compared to 179° F / 82° C for CFLs and a whopping 335° F / 168° C for incandescent bulbs.

Then there’s lifespan: LED bulbs last an average of 45,000 hours, in contrast to 8,000 hours for CLFs and 1,000 hours for incandescent.

In annual cost to light a home, the average cost of ten LED bulbs comes to $37.40/year. For CFL bulbs, that more than doubles to $79.40, and jumps to $149.60 for incandescent bulbs.

Oh, and you know how CFLs take a minute or two to warm up and reach their full brightness? LEDs don’t have that problem.

Courtesy of Sewell Direct

8. Consider Solar Panels

Some of the items on this list are no-brainers. Installing solar panels is not one of them.

Solar panels remain expensive to install, even as the cost per kilowatt hour drops lower each year.

With that said, they make a heck of a statement, and some renters will pay a significant premium for them.

At the high end of the spectrum, you have Elon Musk’s newfangled solar roofs, that look like upscale roofing tiles in slate or terra cotta, but in fact contain tiny solar receptors. Expect to pay several times the cost of a traditional new roof, but if you need a new roof anyway, and your property is (quite) high-end, this may be worth researching further.

Traditional solar panels cost less, but let’s face it, they’re ugly. Even so, they are very visible, which means they make a statement that some renters are looking to make.

Here’s one other way to approach solar, however. If you invest the money up front for solar panels, you can effectively become the power utility, and charge your tenants for electric usage each month. Whether those charges are based on actual usage, a flat fee, or simply higher rent with utilities included is up to you.

If you’re like most landlords, and all this solar talk is making you skeptical, you could always include a small, folding solar charger for personal devices like smartphones and tablets. For less than $100, you can grab a prospect’s attention by saying “Solar-powered smartphone charger included!”

9. Slow Hot Water Usage

If you want to lower the energy used by your hot water heater, you have a few options…

One is to simply lower the thermostat on the hot water heater. Try setting it to 120° – 130° F (49° – 54° C).

Another option is to swap out shower heads with low-flow heads. It’s effective, but many people (myself included) find low-flow showers unsatisfying.

RELATED: Boost Your Cash Flow With A Water Efficient Rental Property

An oldie-but-goodie is simply insulating your properties’ hot water pipes. The insulation can last decades, and often doesn’t cost much to install. By reducing wasted heat, you don’t affect renters’ showering experience, and you also waste less money having to cool the property in the summer, due to escaped heat from the pipes.

None of these property updates is a panacea all by itself, but as you start layering these updates in your property, you (or your renters) will start seeing the savings grow over time.

Get creative with how you market your energy-efficient rental units. Push the green, eco-friendly message. Most of all, get extremely concrete (with actual numbers!) in your marketing, to drive the message home to prospective renters that they will save money by living in your property.

If renters know they’re saving money on utilities, your higher rents will be an easier pill to swallow!

Have you tried any of these energy-efficient updates in your rental properties? What are some other ideas you’ve tried or considered? Share your experiences below!

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About the author

Brian Davis is the co-founder of, a service offering free online rent collection, a free rental property calculator, free video course on boosting rental returns, and a free rental application. Reach out at any time, Brian is extremely easy to reach and responsive!

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  1. Jenny Chien says:

    Great read and great ideas! New apartments nowadays tend to be green. And yes, renters say that they are willing to pay more in communities built sustainably according to NMHC’s latest Residence Preferences Survey.

    1. Thanks for reading Jenny!

    2. Glad you enjoyed the piece Jenny!

  2. Excellent tips brian. This is also one type of attracting renters and also saving lot of energy. By making like this, you can be ahead of your competitors. Really all these tips will help the landlords in saving electric bill for rental property. Thanks for updating this article.

  3. Daniel Roma says:

    It seems its a win-win for both the landlord and the tenant, Thanks Brian! What I have found is that most of these are even required especially when dealing with older structures. Question – Does the U.S. Government offer any incentives for making your home or investment properties more energy efficient at the moment?

    1. I’m not sure about the U.S. government, but it probably depends on which improvement you’re making, and whether the IRS has any allowances that would give you a tax break.

      For what it’s worth, I just installed a Nest Thermostat in my house last week and our utility company (not the government) gave us a $50 rebate… so even if the government won’t help out, sometimes the utility companies will.

    2. We’re straying from my area of expertise, but there are some tax incentives available (at different levels of government, including federal) for certain eco-friendly property upgrades. And as Seth pointed out, sometimes the incentives can come from utilities or other places, too! I’d do some research online to see what incentives are available in your state and city.
      Thanks for reading!

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