Owning a rental means you want to get the most money out of it, rather than sinking money into it. Getting the most out of it often revolves around your tenants and what they are looking for in a rental property. Tenants are looking to be as economical as possible. One of the ways to save money on a day-to-day basis is with hot water.
I’m sure you know that a traditional water heater runs all day and night keeping the hot water hot, which means it is using power whether you like it or not. That means more electricity used which is both a financial and environmental drain. If the water heater in your rental property needs to be replaced, you may want to consider a different option which can be a good selling point to potential tenants (especially if they have to pay their own utilities).
Tankless Water Heater
This is the most common ‘alternative’ to the traditional water heater. It only heats the water that you use. This makes far more sense than having a tank of water bubbling away that you may not use. It’s like having a pot of water hot on the stove all day, just in case you may need it. A tankless water heater works by cold water entering at the bottom, where a gas heater rapidly heats the water to a near boil. When you turn off the water, the heater turns off. To increase efficiency even further, having the heater with close to the bathroom or kitchen will mean the hot water won’t need to travel so far.
Electric Heat Pump
This type of water heater is becoming more popular, based on the technology of a heat pump. The heat for the air is transferred to the water and is three times more efficient than a traditional water heater. In many places there are rebates available when installing a heat pump water heater, so look into it.
Solar Water Heater
This initially seems like the best option, no more paying for hot water! But there is set up and maintenance that needs to be considered. You also need a boosting system for days when there isn’t enough sun to heat the water. So depending on where you live, this option would heat between 60-100% of your water.
Everyone is looking at using alternative energy sources, so having solar panels that are well maintained, on the roof of your rental could in fact help you attract a savvy long-term tenant.
The downside to the above options is the cost. They cost more to buy and install than a regular water heater, but it should pay for itself within 1-5 years. That is if you were paying the power bill yourself. Since your tenants are paying the power bill, then you need to consider: a) if it’s worth it (attracting new tenants, having a point of difference in the area etc) and b) how to recoup the costs involved? Is it about adding value to the property or can you include it as part of the rent?
If you are unsure as to the viability of installing an alternative to regular water heater, then get in touch with your property manager. They will be aware of the areas that it could be a good option.