Solar for increasing cashflow and attracting tenant?

wombat777

wombat777

I am wondering if adding Solar Hot Water or a Solar Power System is a good way to increase cashflow or to help attract / retain tenants?

Theory is that I could charge an extra $25 - 50 per week rent for a tenant to achieve a significant saving on their power bill.

Solar-powered hot water is perhaps the best way to achieve a saving for the tenant.

Do you think there are real benefits? Do you think a tenant would recognise the saving when selecting a property? ( I know I would )

Are there any government-sponsored initiatives or rebates in QLD for system installation? Do they apply to investment properties?
 
I'd be willing to bet that most tenants wouldn't give a stuff about the panels, and would be put off by the increased rent.
 
wombat777 said:
Fair point. Will keep it in mind for my PPOR instead.
Click to expand...

Some good deals around for larger systems at the moment so search now.

Check out this link for home battery storage from Tesla $3500
Says enough energy storage to cover your nightly energy consumption
This is only 110v , not sure when they will have the 240v in op.

http://www.teslamotors.com/powerwall

Its not here yet but a matter of time , energy suppliers will be pooing in their
boots when this comes in.
 
nww said:
Some good deals around for larger systems at the moment so search now.

Check out this link for home battery storage from Tesla $3500
Says enough energy storage to cover your nightly energy consumption
This is only 110v , not sure when they will have the 240v in op.

http://www.teslamotors.com/powerwall

Its not here yet but a matter of time , energy suppliers will be pooing in their
boots when this comes in.
Click to expand...

My usage is currently around 10kwh, however I should be able to get that down. This system would work quite well when combined with panels. I already have solar gas-boosted hot water.

I'm annoyed that I didn't pre-plan some conduits between my meter box and a suitable location for batteries when I had my house built.
 
wombat777 said:
My usage is currently around 10kwh, however I should be able to get that down. This system would work quite well when combined with panels. I already have solar gas-boosted hot water.

I'm annoyed that I didn't pre-plan some conduits between my meter box and a suitable location for batteries when I had my house built.
Click to expand...

I could not justify solar hot water , My last off peak amount was $31 for the quarter for electric water system (2persons), so I went solar grid about 5 years ago , we are only just in credit for our electricity as the price continues to go up
5 years ago we had a credit of over $500 today last bill was $17 in credit .
When the 60 cents tariff runs out will look at an upgrade from current 1 kw system.
 
I have a tenant moving out of a share house setup I have because I'm putting the rent up $5 per week to cover the costs of upgrading their internet connection (as others have complained about the current internet) and giving them netflix so they stop downloading things illegally, the cost is about $5.50 per week each for me, so I'm actually getting 50 cents per person less per week. Yet although there has been no rent rises for 2 years, the person is moving out regardless.

A lot of tenants are stupid.

You asked:

"Do you think a tenant would recognise the saving when selecting a property? ( I know I would )"

Here is your biggest mistake. You are thinking the way "YOU" think not the way a stupid person would think. Think more stupid. For example "Why would I pay $30 per week more for rent, just to save $480 on my power bill in 3 months time". A smart person would realise they would be $10 a week better off, but a stupid person wouldn't.

So I would say not to bother with the solar and keep your rents down.
 
obviously depending on how much hot water you use its still cheaper to run an electric HWS on offpeak.
that is unless you have a household of 5+ and use all the hot water every day
 
Tim86 said:
Here is your biggest mistake. You are thinking the way "YOU" think not the way a stupid person would think. Think more stupid. For example "Why would I pay $30 per week more for rent, just to save $480 on my power bill in 3 months time". A smart person would realise they would be $10 a week better off, but a stupid person wouldn't.

So I would say not to bother with the solar and keep your rents down.
Click to expand...

Wow that's a bit harsh! Many families live week to week and just simply can't afford the extra $$. Yes it does make sense to spend a bit extra to save in the long run, but not everyone will or can do it. One of the reasons people rent is because they are not in the financial position to spend any more on accommodation (to save for a house or pay a mortgage etc).

In terms of value add / return on investment - I agree that it's not the best way to spend your money. Even if you were going for a reval, I'd question what value the solar would add. In my experience it is dollar for dollar or at the very best $1:$1.50 which is not ideal.

Wombat, investigate who your target demographic are in a bit more detail and that will tell you what to spend your money on (ask property managers etc in the area). This might be a fence to secure the yard (for young families), a security system (for single Mums), a ramp (for older tenants) or air-conditioning (depending on location). There are lots of things tenants value and will make them choose one property (yours) over another.

Good luck!
 
I got a call from a solar guy today about putting a system in, he said. 3kw system would be around 4k. Having tennants, I actually thought it wasn't a good idea. But having said that, holding tennants is a think I'd rather do than having a break leases all the time.

You maybe onto something regarding cash flow, but it's a very fine line one thinks.
 
neeko said:
I got a call from a solar guy today about putting a system in, he said. 3kw system would be around 4k. Having tennants, I actually thought it wasn't a good idea. But having said that, holding tennants is a think I'd rather do than having a break leases all the time.

You maybe onto something regarding cash flow, but it's a very fine line one thinks.
Click to expand...

I think it comes down to how the property is marketed as well. A well-written listing would hopefully "sell" the benefits of reduced power bills. Agents / property managers would also need to be pushing this benefit.

$15 to $25 might be a justifiable increase depending on the size of the home.
 
wombat777 said:
$15 to $25 might be a justifiable increase depending on the size of the home.
Click to expand...

Seriously - If I was the tenant I wouldn't care about the benefits of panels, and would just be looking at the per week rental amount. I imagine most potential tenants would think the same as me on this.

You seem really bent on either putting in panels or raising the rent. Not sure which, but you just seem to be trying to convince yourself one justifies the other.
 
Tim86 said:
I have a tenant moving out of a share house setup I have because I'm putting the rent up $5 per week to cover the costs of upgrading their internet connection (as others have complained about the current internet) and giving them netflix so they stop downloading things illegally, the cost is about $5.50 per week each for me, so I'm actually getting 50 cents per person less per week. Yet although there has been no rent rises for 2 years, the person is moving out regardless.

A lot of tenants are stupid.

You asked:

"Do you think a tenant would recognise the saving when selecting a property? ( I know I would )"

Here is your biggest mistake. You are thinking the way "YOU" think not the way a stupid person would think. Think more stupid. For example "Why would I pay $30 per week more for rent, just to save $480 on my power bill in 3 months time". A smart person would realise they would be $10 a week better off, but a stupid person wouldn't.

So I would say not to bother with the solar and keep your rents down.
Click to expand...
I concur

Tell the majority of aussie mentaltiy people, pay an extra 10 per week for a 1000 cash return in a year. And they will look at you as though you just asked to sleep with his wife and sell their first born

Just like people who think a credit card is a cash gift !!! (and yes. There are people like this!)
 
wombat777 said:
I think it comes down to how the property is marketed as well. A well-written listing would hopefully "sell" the benefits of reduced power bills. Agents / property managers would also need to be pushing this benefit.

$15 to $25 might be a justifiable increase depending on the size of the home.
Click to expand...

Why dont you just put them in and come back once you have acheived either same rent or 5 per week more
 
I have them and it didn't seem to make a difference when it came to attracting tenants. That being said I was advertising during a really slow time of the year.
 
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