How Landlords Can Reduce Utility Bills

Reduce Utility Bills
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Landlords invest in rental properties to make money. Your profit is determined by the rental income you receive minus your expenses. Reducing the expenses you have associated with the rental property is one way to increase your bottom line. Here are some great tips for reducing the utility bills at your rental property.

Benefits of Reducing Utility Bills for Landlord Paid Utilities

Reduce Expenses, Increase Profit

Any bill associated with your rental property that you are able to reduce will help to increase your potential profit. Electricity, gas and water bills are three separate areas that you can work on reducing.

Increase Value of Rental Property

Taking steps to reduce your utility bills, often coincides with making improvements to your rental property. These improvements could be small changes like swapping out older light fixtures for newer LED versions or it could involve larger changes, such as swapping out older appliances for newer energy efficient ones.

When you are looking to sell your rental property, these upgrades will make your property more attractive to potential buyers. Not only will there be newer fixtures throughout the property, but there will also be lower utility bills, and these lower expenses and thus higher cash flows will make the property very attractive to other investors.

Charge Higher Rent

Certain upgrades can allow you to charge a higher monthly rent for your property. For example, replacing older appliances with newer energy efficient stainless steel versions will not only help with the utility bills, but it will make the rental unit look nicer, and thus increase the value.

Fewer Maintenance Issues

When you replace older items at your property with newer versions, you will often reduce the number of maintenance calls you have to make to the property. For instance, LED lights can last for 10 to 20 years. Newer windows can help cut out drafts and reduce heat complaints.

Benefits of Reducing Utility Bills for Tenant Paid Utilities 

Apartment More Affordable

The monthly rent is not the only expense tenants have to consider when finding a place to live. They are often responsible for paying the utilities as well. Lower utility bills can help make your apartment more affordable and make prospective tenants choose your property over other comparable units.

Nicer Rental Property

Reducing utility bills often involves performing upgrades to the rental property. These upgrades, such as newer appliances, newer windows or newer lighting will improve the appearance of the rental property and make it more appealing to prospective tenants.       

Tips for Reducing Gas and Electricity Bills

There are several steps you can take to help reduce the gas and electric bills at your rental property. These include:

  • Cleaning HVAC Filters: When the filters on your HVAC units are dirty, the unit has to work harder and not as efficiently. To ensure optimal performance, you should change these filters every month.
  • Sealing Cracks: Heat enters and escapes the home through cracks and crevices around windows and doors. Caulking around these gaps will help to prevent this unwanted airflow. With the drafts reduced, tenants will not have to turn the heat up as high in the winter or turn the air conditioner down as low in the summer.
  • Turning Down Temperature on Water Heater: Lowering the temperature on your water heater, can help save you money. Consider lowering the temperature from 140 degrees to 130 degrees or even 120. The more you lower the temperature, the bigger your savings. Going from 140 degrees to 120 can save you anywhere from 5 to 20 percent a year on your water heating costs; depending on the water usage and the specific utility company.
  • Buying a Programmable Thermostat: At the very least, you should have a programmable thermostat for the common areas of your rental property. You can set the temperature to vary throughout the day and night to account for exterior temperature fluctuations and hours when tenants are usually away from the rental property. You can install programmable thermostats in your tenants’ apartments, but it would be their responsibility to actually program them. You can show the tenants how to use the thermostat and explain to the tenant how it can help save them money on their utility bills, which will be an incentive for them to actually use it.
  • Installing LED Light Fixtures: LED lights to use far less energy than older fixtures. You should consider replacing all old incandescent, fluorescent or other lighting at your rental property. Not only can LED lights cut your electric bill by as much as 25 percent, LED lights last on average between 10 and 15 years, so they require virtually no maintenance.
  • Install Motion Lights: There are certain areas of the rental property where you want to have lights that are always on. These include the front entrance, the interior common area, and all hallways and stairwells. There are other areas, however, which do not need lights that are constantly on. These areas can include a back entrance, a side entrance or a driveway. For these areas, you can install motion lights. These lights will switch on when there is movement within a certain radius of the light, but otherwise, will be off, saving energy.
  • Insulate: Properly insulating your rental property can also help to reduce energy costs. While you may not want to go and rip open every wall in the property, you can add insulation to areas that are already open, like attics or crawl spaces. Proper insulation can help keep the property cooler in the summer and warmer in the winter, therefore reducing energy bills, because your tenants will not have to set their thermostats to such extreme temperatures.
  • Swapping Out Old Appliances for Energy Star Appliances: According to, replacing a 20-year-old refrigerator with a new Energy Star model can save you approximately $150 over 5 years. You will achieve similar savings when replacing additional appliances, such as stoves and dishwashers. While they will cost you more money up front, they will save you money in the long term.
  • Installing New Windows: Replacing older windows with new double pane windows can help reduce drafts in your rental property, therefore, helping you save on heating and cooling costs. They also have the additional benefit of helping to reduce noise.
  • Replacing Boiler: Replacing an older boiler with a newer energy efficient model can help reduce costs. Look for models that have an energy efficient rating of 90 percent or better. You should also properly insulate the boiler room to help maximize efficiency.

Tips for Reducing Water Bills

There are several ways you can help reduce water usage at your rental property. These include:

  • Fixing Leaks: Fixing leaks in shower heads, faucets and toilets can help reduce water usage. Drips and leaks can increase your water bill by as much as 10 percent, so they are worth addressing.
  • Low Flow Shower Heads: Low flow shower heads will significantly reduce water consumption. Most low flow shower heads have a water rate of 2.5 gallons per minute. The more shower heads you replace in your rentals, the more significant the savings.
  • Faucet Aerator or WaterSense Faucets: You can install low flow aerators on existing bath or kitchen faucets which will help to reduce water flow. You can also purchase new low flow faucets. WaterSense faucets have a water flow rate of 1.5 gallons per minute, which is a 30 percent reduction from the typical water flow rate of a faucet.
  • Low Flow Toilets/Dual Flush Toilets: In the mid-’90s, the law mandated toilets to have a maximum flush power of 1.6 gallons per flush. You should replace any older toilets in your rental property with low flow toilets because these older toilets could be using as much as three to seven gallons of water per flush. You could also consider installing dual flush toilets. These toilets have an even lower flow option for liquid waste, usually between .8 and 1.2 gallons per flush, and approximately 1.6 gallons per flush for solid waste.
  • High-Efficiency Washer: If you have a washing machine at your rental, consider upgrading to a high-efficiency model. These washers use less water and less energy than traditional washers.