5 Ways You Can Lower Your Utility Costs as a Landlord

By Alicia Geigel on May 5, 2022

Depending on your location or your lease agreement, you may be responsible to pay for your tenants’ utility bills as a property manager. In most cases, it is no big deal, as the bills have to be paid anyway. In other scenarios, tenants can take advantage of the fact that they are not responsible for bills like water and electricity, and thus use it freely, racking up large bills in the process. Of course, you can’t force tenants to reduce their use of utilities, but if you are dealing with mounting bills, you may be desperate to look for ways to cut down the costs while also keeping your tenants happy at the same time.

As a property manager, you most likely will not be able to escape the costs of utilities in your property building units, but you can reduce the costs of certain utilities just by taking a few simple steps to maintain your units in the best way possible. If you are dealing with increases in utility costs but are unsure of how to fix this issue, here are five ways to put money back in your pocket and lower the costs.

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1. Properly Insulate Your Units: As the seasons change, the weather gets to extreme temperatures, ranging from freezing cold to what feels like scalding hot. In a properly insulated unit, your tenant will not feel these external temperature differences and live comfortably throughout the year. If the unit is poorly insulated, however, there is a high chance that your tenant will hardly feel a difference between indoors and outdoors in extreme weather scenarios. In situations like this, your tenant may be more likely to crank up your heating or air conditioning system, which could be a temporary solution to their discomfort, but cost you in the long run. Before you run into this problem, check your windows for any cracks or inadequate sealing. A plastic liner on windows can help keep both warm and cold air out of the unit.

2. Maintain HVAC Systems: Another issue you could experience that will run the cost of utilities up is a poorly functioning HVAC system. What most don’t realize, however, is that a common problem with HVAC systems stems from simply not replacing the filters in them. All HVAC systems have filters that are used to properly collect dust and debris from the air and filter it to you for a better living experience. When HVAC filters get clogged, your heating and air conditioning system will not run properly and use more energy to produce hot or cold air, thus increasing the costs of your utility bill. It is generally recommended to change the HVAC filter in your unit/property every 90 days. While it seems burdensome, it will save you money in the long run.

3. Lower Water Heater Temperature: Everyone loves a relaxing, hot shower. Depending on how high your water heater thermostat is set, however, can burn a hole in your wallet. According to Innago, most water heaters are set by default at 140 degrees Fahrenheit. While I love a hot shower, I doubt that any of us are taking that hot of showers. Instead of leaving your water heater at its default setting, consider taking it down a few degrees to cut down your costs. Simply locate your water heater and adjust the dial or setting on it to lower the temperature, which is typically recommended to be around 110 to 120 degrees Fahrenheit.

4. Try Energy-Efficient Appliances: Including energy-efficient appliances in your property units can save money and help you be cost-effective. If you can upgrade appliances in your property units, look for the “Energy Star” labels on washing machines, dishwashers, and refrigerators, which according to Save On Energy, can save you 10% to 50% of your original costs.

5. Swap Out Light Bulbs: If you can’t make the commitment to getting energy-efficient appliances right away, a smaller-scale, less expensive alternative to saving money is swapping out your old light bulbs for energy-efficient ones. Energy.gov notes that “the average household saves about $225 in energy costs per year by using LED lighting,” and your savings could be even higher. With lighting accounting for nearly 15% of energy use in homes, this small choice could make a big impact on your utility costs.

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Saving money as a property manager can seem difficult to achieve. Between constantly maintaining your units to keeping your tenants happy, it can be costly to take care of your responsibilities. Lowering utility costs, however, does not have to be difficult, and with a few simple changes, you can add money back to your wallet.

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