Author Topic: Energy Efficient Home Modifications  (Read 1252 times)

maz_phil

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Energy Efficient Home Modifications
« on: November 16, 2018, 10:33:57 AM »
Hello Mustachians,

*additionally posted in the Tax Advice forum* I recently purchased a home in Virginia, and are planning on renting it out. There are a sizable amount of construction changes that need to be made (electric, plumbing, siding, windows, and roof..pretty much everything.) Additionally, I will be adding a heat pump and a new water heater. I have read online that there are tax deductions and possible grants for constructing/modifying your home to be more energy efficient. However, I cannot seem to get any concrete information regarding what sorts of changes should or can be made. Do any of you have familiarity with these sorts of programs? Are these options that should be pursued? I look forward to receiving your advice and opinions.

Kindest,
Maz_Phil

bacchi

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Re: Energy Efficient Home Modifications
« Reply #1 on: November 16, 2018, 11:16:49 AM »
There are federal tax credits available. https://www.energystar.gov/about/federal_tax_credits

Check into your local electric, water, and gas companies for local rebates.


affordablehousing

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Re: Energy Efficient Home Modifications
« Reply #2 on: November 16, 2018, 11:24:12 AM »
Yes there's a federal solar credit, but beyond that, local utilities or state programs may provide some help. Beware, a lot of them want you to hire "approved" contractors With the markup and permits, the cost is often way more than DIY, even without the rebates. Um, paying a contractor $1500 to do blow in insulation and get $125 back when you can DIY with a rented blower for $250? No thanks. I also rather not wait 8 weeks to get a check or have it show up as deductions on energy bills that a tenant gets to take advantage of.

Wintergreen78

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Re: Energy Efficient Home Modifications
« Reply #3 on: November 19, 2018, 02:48:20 PM »
In California, local utilities offer home energy audits, to help identify the best upgrades for energy efficiency for a particular house. I donít know if Virginia utilities have a similar program, but that is where I would start.

Fishindude

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Re: Energy Efficient Home Modifications
« Reply #4 on: November 25, 2018, 10:43:33 AM »
Things like insulation and replacement doors, storm doors, windows or storm windows usually will get you some write offs.  However, on a rental house where you are not paying the utility bills, I would have to consider the cost vs return before spending on these things.  It's the right thing to do, but you may never get it back in rent.

Zaga

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Re: Energy Efficient Home Modifications
« Reply #5 on: November 25, 2018, 11:58:57 AM »
I don't know anything about renting a house out, but I do know the energy efficiency things we have done to this house have added to our comfort enormously!  Insulation in all the walls and attic was the best thing we did to this house.  Replacing the 50+ year old windows comes in a close second.  Both of those can be done on a reasonable budget no matter if there are rebates or not.

We also got a geothermal furnace put in, very expensive but worth it to us.  We did get a large tax rebate on that, but I don't think that's still available.

I would guess, though I don't know, that you will over time get a better caliber of renters with a more comfortable livable house.

LPG

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Re: Energy Efficient Home Modifications
« Reply #6 on: November 25, 2018, 12:23:40 PM »
Doing some really simply things to reduce infiltration, like weatherstripping on doors to improve the air seal, can be extremely cost-effective. I'd also recommend looking at the light bulbs; there won't be dramatic savings, but very little competes with improved light bulbs for cost effectiveness.

Others have commented that you likely won't see the cost benefit of these improvements if you're renting it out, but that a more comfortable house could help you get better renters. You could also use the energy efficiency angle in the same way - Either the renters would have lower utility bills, or you could take on the monthly energy costs yourself. Either would be a selling point, letting your potentially get better tenants  or higher rents.

Kroaler

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Re: Energy Efficient Home Modifications
« Reply #7 on: December 18, 2018, 05:38:24 AM »
I think utilities included would be the only way to charge higher rent to offset your cost(then someone setups crypto mining or weed growing and totally screws your good intentions).    I think most people shop on price point without regard to utility cost :/.

I did see a landlord one time on a forum who had tenants who couldn't make tent cause utility cost were so high.  He made some high roi investments to bring to bill down to a neighbor Hood average.    To him it was worth it to get a steady rent check.

Also, while I love the idea of new windows, it has one of the lowest ROIs.     Find that low hanging energy fruit first :).