Learning how to reduce utility costs on a consistent basis can make a big difference in our bottom lines as property owners. This is true concerning properties we occupy, where utilities are included in the rent when energy costs are billed on a submetered basis and even in cases where the tenant is completely responsible for those costs. After all, a residence that’s cheaper to heat and cool has real long-term value to a prospective tenant and is thus a more attractive renting option.
Track Usage and Costs
The biggest mistake that many landlords make is not tracking usage and costs on a regular basis. When we refer to costs, we’re talking about the energy costs themselves but also any ancillary expenses. There’s even landlord-oriented software on the market to help you do this, and you can also hire a property management company in Denver to do it on your behalf. The data you collect in this manner becomes more valuable over time as you build a history. That history lets you know what to expect on a month-to-month basis and makes it very easy to spot anomalies that require closer inspection.
Submetering is an option that many Denver utilities offer and, depending on where your property is and its configuration, may even be required by law. Submetering is where the utility company gives you a breakdown based on subunits. If you own a duplex and have two tenants, for instance, you could request a separate electricity bill for each unit. A duplex is an obvious scenario, but this tact can be used in other scenarios even when you’re footing the bill to determine where any excess usage exists.
Determine Discrepancies Between Spending and Billing
If you as the landlord pay the utility bill and are compensated either through the rent you charge or a bill that you pass onto your tenants, then it’s important to know precisely what you’re paying and receiving. This is where tracking usage and expenses in a way you can analyze becomes such a powerful tool. If you include utilities in the rent, then the first step in learning how to reduce utility costs is knowing how much to charge. If you have a two-year record in which the previous tenant consumed about $200 a month, then you know that the rent you charge the next tenant must at least account for that amount.
Opt for a Predictable Monthly Bill
Many utility companies offer a service in which they’ll normalize your bill over the year. This lets you, for instance, pay a bit more in the winter and autumn but pay less in spring and avoid spikes in summer. This, of course, does not let help you spend less overall, but it does let you plan and spend with more consistency, and the approach can complement your efforts to track utility usage and expenses.
Be Proactive Concerning Maintenance and Upgrades
Another key to learning how to reduce utility costs is understanding the value that routine service and energy upgrades have. A big mistake that many property owners make is putting off upgrades. It’s often shortsighted because what you save in the short-term doesn’t compare to what can be saved over the long-term. If you have a hot water heater that’s 15 years old, a proactive replacement now will likely reduce your total cost of ownership over the next decade. Have a network of service people you trust. Schedule them for routine maintenance, and act on their professional guidance.
Automate Wherever Possible
Being able to program and automate energy usage can have a great effect even for a single residence, and that effect becomes exponentially more valuable with the more properties you own. An upgrade as simple as a smart thermostat can make an apartment more appealing to prospective tenants and can help them reduce energy consumption while the family is at work and school. You can also automate in areas where the community shares responsibilities: showers near the pool that automatically turn off and washing machines that operate at a lower heat and consume less water, for example.
Maintain and Upgrade Energy Efficiency
Perhaps the most important aspect of learning how to reduce utility costs is awareness when it comes to energy efficiency. An apartment that has old windows or a home that hasn’t been reinsulated in more than a decade will certainly be more expensive to heat and cool. Upgrades like new insulation and storm windows can make a home much more cost-effective, and it can be a great selling point when you can tell a prospective client that your property is 3 percent less expensive to power than the area average.
Take a Green Approach
Taking an environmentally friendly approach to property ownership doesn’t have to mean paying more. In fact, there are many ways in which we can go green, learn how to reduce utility costs and actually lower our overall expenses. It does require us to break from old and perhaps bad habits at times, and it does often require to have that vision to see savings over the long-term rather than costs in the short-term. However, something as simple as switching over to LED lighting wherever possible can mean changing bulbs less often, and that can really add up over time.
Send Reminder Notices to Tenants
Involve your tenants. You certainly don’t want to bug your tenants or try to micromanage their energy usage, but there’s nothing wrong with sending notices. Even a notice at the beginning of each season can have a big effect. Good tenants do respond. Consider informing them what is being spent, what could be preserved and tips on how to conserve better. The green angle can be quite effective.