REI INK

AUTHOR DETAILS

Asset Management

Why You Should Go Green with your SFR Properties

Renters Will Pay a Premium By Anthony Scotese The benefit of “going green” with your single-family rental (SFR) properties does not stop with the environmental impact alone (although that is certainly cause for celebration). Investors have also enjoyed financial benefits as well, such as improving property value, minimizing tenant complaints and improving tenant retention. Plus, studies show that renters favor living in energy-efficient buildings and will pay a premium to live in these spaces. The Benefit of Going Green Many of us have spent time thinking about our environmental impact and ways to minimize our carbon footprint. From eliminating single-use plastics from our lives to carpooling with co-workers, there are many ways — big and small — to live a little “greener” and be kinder to mother earth. Living greener and healthier lives starts in the home. Renters are increasingly taking green living into consideration when searching for places to live. What once may have been considered a passing fad is now quickly becoming table stakes for many would be renters. According to a recent survey of more than 2,000 U.S. renters from MRI Software, 40% of respondents stated they would not rent a property that did not include green practices. So, What is at Stake? Residential and commercial buildings accounted for 13% of greenhouse gas emissions in 2021, according to data from the Environmental Protection Agency. Fossil fuels that are used to provide heating and cooling to residential homes and apartment buildings are all contributing to these emissions. And adjusting residential properties is not just a recommendation in some states and cities, it is mandated. For example, owners of apartment buildings in New York City must get their buildings in compliance with Local Law 97 by 2024, a part of the city’s Climate Mobilization Act of 2019, or face millions of dollars in fines per year. On the west coast, the California Green Building Standards Code provides guidance on the mandatory and voluntary sustainable construction practices for residential and commercial buildings in California. And while some of these considerations are more geared toward multifamily dwellings, if state and local mandates such as these continue to be a trend, it would behoove landlords to start making these green adjustments to their investment and SFR properties sooner, rather than later. Aside from reducing harmful emissions, making green enhancements to SFR investment properties can pay off — literally and figuratively — in the long run. Making adjustments that can minimize drafts – like new weatherstripping, insulation and energy efficient heating and cooling systems — can cut back on energy bills, tenant complaints and maintenance costs. Other small to mid-level enhancements like installing energy-efficient lighting and smart thermostats could help save hundreds of dollars per year, while larger projects like installing energy efficient heat pumps could potentially yield savings in the thousands annually per household. What’s more, making green updates to a home can help increase its property value. And, if you are ever considering selling off some of the properties you have made green enhancements to, you could pocket more. Freddie Mac research shows that homes that had high-efficiency ratings sold more on average than homes that did not — 2.7% more, in fact. Four Improvements to Consider Going green seems like a big undertaking — whether you have five or 500 SFR properties. So, how can you start on the smaller scale, while still making a big impact on your carbon footprint and your wallet? Here are four areas to consider: Replacing windows Say goodbye to those thin, drafty windows and say hello to new, ENERGY STAR qualified windows. With features such as invisible glass coatings, multiple panes and stronger weather stripping, you are able to better control heat gain and loss. Another bonus: According to ENERGY STAR, installing these qualified windows can lead to reduced energy bills by “about 7-24% compared to non-qualified windows.” Installing insulation Installing or improving insulation is another option to consider in helping to reduce energy bills. According to the U.S. Department of Energy, adding insulation to spaces like attics, crawl spaces, floors and more, can help save, on average, up to 20% on a home’s heating and cooling costs. Updating appliances Consider swapping in new, ENERGY STAR label appliances that use less energy to run. For example, an ENERGY STAR label washing machine uses less energy and water than agitator washing machines – 25% less energy and 70-75% less water, respectively. Faucets and showerheads Leaky old faucets and showerheads in your rental properties could mean you are leaking money. According to energy.gov, one drip per second from a single leaking faucet wastes 1,661 gallons a year, which translates to around $35. And while $35 is nothing too concerning, for an investor with several hundred properties in their portfolio, that figure can grow exponentially. Consider installing faucet aerators and low-flow showerheads in your properties to ensure maximum water efficiency. WaterSense labeled faucets and aerators — that can even be installed onto existing faucets — are more efficient than standard models. How efficient? Models that bear the WaterSense label can save around 700 gallons of water a year, according to epa.gov. Outsourcing to Save Time You do not have to go it alone. Working with a trusted partner, who specializes in the management of rehab projects and can oversee the project from start to finish by sourcing local contractors, can take the burden off your plate and provide you with the peace of mind that the job will be done right. Consider if outsourcing these enhancements at-scale makes sense for you.

Property Preservation

Selecting a Property Preservation Partner

Technology is No Longer a “Nice to Have” — It’s a “Need to Have” By Anthony Scotese A property preservation partner can be the difference-maker for investors who are juggling a growing number of properties in their portfolio. From repairs and rehabilitation to grass cutting and snow removal, many have come to rely on these services to keep defaulted, vacant or occupied properties in great condition. However, not all providers are created equal. There are several factors to consider when selecting a property preservation partner. Here are five things to keep-in-mind when beginning to shop around: 1. Experience and expertise Choosing a partner who can perform inspection, landscape and rehab services for your properties is a big undertaking and requires a certain level of trust. Do not put your properties in the hands of just anyone. To ensure your investments are secure, ask the following questions when interviewing potential partners: »          How long have you been doing property preservation work? »          How many clients do you work with? »          Would I have a dedicated relationship manager working with me if I select you as my provider? »          What sets you apart from your competitors in this space? Do not be afraid to ask the hard questions to ensure you are selecting the right partner for you. 2. Nationwide footprint This should go without saying, but if you have properties spanning various states/regions, you want to ensure your property preservation partner operates in your footprint. Regardless if you have properties in multiple states, if you are an investor planning to scale in the future, it is important to select a partner that can help you and not hinder you in those endeavors. Make sure to ask potential partners about their coverage area before signing on the dotted line. 3. Reporting capabilities Reporting capabilities should be top-of-mind when considering a property preservation partner. Understanding the standard and custom reporting options available to you, which can help you make sound decisions regarding services you may need to order for particular properties, is of the upmost importance. You may not think reporting is a necessity but making informed decisions by leveraging data is the best way to ensure your assets are safe and secure. 4. Technology and innovation What technology is available to you that can make your life easier? Nowadays, technology is infused into all aspects of the origination lifecycle. If a provider does not have a focus on technology, you could risk missing out on opportunities to scale or refine your portfolio. For example, investors have benefited from automated decision-making technology to quickly adapt to real-time industry changes to achieve their performance goals and minimize risk. From managing client objectives to placement and order delivery to vendor management, technology is changing the face of investing. Technology is no longer a “nice to have” – it’s a “need to have” if you wish to remain competitive in this challenging landscape. 5. Disaster planning The hurricane seasons over the past two years have been above normal in terms of severity and number of named storms. And it is not just locations that are in FEMA-designated Special Flood Hazard Areas (SFHAs) that are at risk as a weather-related disaster can happen anywhere, at any time. You need to ensure your property preservation partner can quickly aggregate damage information and target impacted areas quickly after weather events. From there, you will need their support with ordering needed inspections of properties, filing hazard claims and facilitating needed repairs due to roof damage, flooding, electrical and plumbing issues, and more. Quick remediation of any issues related to weather damage to properties is critical to protecting assets and ensuring no further damage is sustained due to neglect.

Load More