Managing Rental Properties: Advice for Reducing Energy Costs


When factoring an energy budget for commercial or rental properties, it can be a very involved and difficult process. However, according to the National Apartment Association, in 2012 utility spending accounted for approximately 20-30% of all operating expenses for multi-family apartment buildings. With energy rates varying from one quarter to the next, it can greatly impact the overall profit each year. As a commercial property owner, finding ways to cut your utility costs is the best way to save money.

Many landlords assume that if they don’t have the necessary capital to invest in large energy projects like new windows, solar panels, and such, that ultimately there is nothing they can do to conserve energy and save money. However, there are many affordable projects that can be completed on your property to reduce energy costs significantly. Some of those projects include:

  1. Replace the Lights
  2. Insulate Heating Systems
  3. Adjust Water Heater Temperatures
  4. Install water saving equipment
  5. Insulate and seal
  6. Invest in Energy Star Appliances

Switch to Energy Efficient Lighting

If you’re still utilizing traditional incandescent lighting, it is time to consider a change. Of all the projects you could take on to conserve energy, changing light bulbs is one of the easiest to accomplish. Instead, building owners should consider the use of energy efficient light bulbs for rental properties. Investing in CFL and/or LED lighting can greatly reduce your energy costs. While initially more expensive than traditional forms of lighting, both CFL and LED lighting can save you money each month, as they require less electricity to operate and can last about 20 to 25 times longer than traditional lighting forms.

Insulate the Heating System

If your broiler pipes are improperly insulated, your property is losing a great deal of heat and money. Property owners might also consider insulating their hot air furnace ductwork which can also help to decrease energy costs. Insulating broiler or hot water heater pipes can increase water temperatures by two to four degrees without ever having to adjust the thermostat. According to, in a single family home, this could save about $8-12 per year.

Adjust Water Heater Temperatures

Providing your tenants with hot water is a must. However, did you know that some hot water heaters can get to temperatures of about 140 degrees? That essentially makes the water too hot to use and essentially, unnecessary. Taking the temperature down even 20 degrees can save you a great deal of money. Your tenants will still receive hot water but your bill will decrease significantly. However, be sure to check within your state about landlord/tenant laws as some jurisdictions have restrictions on the maximum hot water heater temperatures. While you want to save money, you also want to be in compliance.

Install Water Saving Attachments

Low flow shower heads and faucets are a great investment. They can decrease your water usage by as much as 30 percent, and also reduce the amount of energy needed to heat the water by another 30 percent. Because there is less water usage, there is a lesser demand for heated water thus saving you double the money for a simple investment.

Insulate and Seal

Insulation is how you keep cool air out and warm air in during those cold winter months. Since heat rises, it is beneficial to check into the insulation on the top floors of your building. It is recommended that your top floor have at least 12 to 18 inches of insulation for the best results. If you cannot afford to invest in wall insulation, you can resort to other methods that might include winter proofing windows and doors with plastic, weather stripping, and caulk for the time being.

Invest In Energy Star Appliances

When installing appliances in the rental units you may want to reconsider its manufacturer. Look for appliances that have an energy star rating as they are about 50% more efficient than other appliances. Using energy star products such as the washers/dryers and ventilation systems through your rental building can have a great impact on your bottom line.

Each of these strategies can have a huge impact on your operation costs as it pertains to energy usage. Many of these projects can be completed without the help of professional contractors which also saves on costs. In closing, it may also be beneficial to have an energy audit conducted on the annual basis to find out if there are other areas in which you can improve your property for the better.

Featured image credit: ShutterStock

Leave A Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.