Have you ever noticed that rental properties almost never have solar?
Australia has the lowest cost rooftop solar in the world, plenty of sunshine, and because we are heading towards having the most expensive pre-tax grid electricity in the world, solar is a must have for almost anyone who owns a roof.
But over the past 11 years Australian home ownership has fallen from 70% to around 66% and since it costs over a million bucks to buy a butterbox in Sydney, this figure isn’t likely to improve any time soon. This means one-third of the Australian population is locked out of owning rooftop solar.
There is almost no solar on the roofs of rental properties because landlords have little incentive to install it, as only the tenants will benefit from the reduced electricity bills. And tenants don’t install solar, as they can’t take it with them and most are in no hurry to gift their landlords with a free solar system.
However it is possible, using good old human cooperation, for landlords and tenants to thread the needle of self-interest so both benefit from rooftop solar being installed, but this rarely happens. Regrettably, landlord and tenant relationships are often adversarial rather than cooperative.
To get around this coordination problem, a third-party can be brought in that helps everyone play together nicely and arranges for electricity generated by a rental property’s solar system to be sold to the tenant at a price less than they would pay for grid electricity and then hands that money over to the landlord. After, of course, they take their cut.
This is a service a company called Matter provides. They do this by installing a box that measures how much solar electricity a rental property consumes and exports. This means that a company called Matter functions as an energy trader. Because in everyday life matter and energy are regarded as being two separate things, to me, this suggests that when it came to selecting a name, they chose poorly.
Maybe a company that trades in energy would have been better off calling themselves something like “Bernard”. As my uncle Bernie always used to tell me, that’s a great name. Or if they wanted, they could have picked something funky such as Genki A Gogo or Electric Boogaloo.1
Despite their odd name, I think Matter provides a service a number of landlords will be interested in. Especially now that both grid electricity prices and feed-in tariffs have risen so high. Tenants may also want to suggest their landlords use Matter’s services, as they will get lower electricity bills. However, depending on how tightly the landlord turns the screws, they may not be much lower.
Matter, of course, has to be compensated for their services. But what Matter is doing is not complicated, so competition should work to keep the cost of their services low. And that competition could kick in any time now.
How Matter’s System Works
Matter’s business model involves them being a middle man in an electricity trading sandwich. They sell electricity produced by the rooftop solar to the tenant at a rate less than they pay for grid electricity. If it wasn’t less there would be no point in the tenant participating. Also, by law, tenants cannot be charged more than what grid electricity costs. Matter then gives that money to the landlord after charging a fee of $14 a month.
Matter’s Box Costs $1,500 Before Installation
For some reason, this Matter box appears to be installed in the middle of a table.
Matter sells landlords a little box that measures how much solar electricity a property generates and how much it sends out into the grid for a feed-in tariff. It then sends this information to Matter’s server independently of the tenant’s internet connection, using 4G.
Unfortunately, this little box doesn’t come cheap.
The box itself costs $1,500 and needs to be installed by an electrician. The good news is the installation shouldn’t be complex and so not too expensive. The bad news is, despite its high price, its warranty is only for 2 years. Personally, I don’t think I could bring myself to pay that much for something that only has a 2 year warranty. There are devices that do a similar job with longer warranties that are far cheaper. For example, Solar Analytics sells a device where the basic version costs $300 to $500 installed and has a 5 year warranty2.
I expect competition will soon result in lower costs and better warranties for these types of devices. (Maybe Solar Analytics will go into competition with Matter?)
Matter’s Warranty And Consumer Law
Australians are protected by consumer guarantees that apply no matter what written warranties or sales people say. If a product fails outside of its written warranty period, a consumer can still be entitled to a repair, replacement, or refund. Because Matter’s box is so expensive and because devices that perform a similar function are much cheaper and have a 5 year warranty, I suspect a consumer tribunal would require Matter to provide a remedy free of charge if the box broke down within a 5 year period or possibly longer. But note I am not a lawyer. This is just my opinion and not professional advice.
The Accuracy Of Matter’s Little Box
Matter’s little box uses CT clamps (current transformer clamps). Their accuracy can be checked by seeing if the amount of electricity Matter says you should be receiving a feed-in tariff for is the same as the amount on your electricity bill.
If you are being overcharged you should insist the results be adjusted. If you are being undercharged, then you should definitely inform your landlord of that fact at some point, when you’re not too busy.
The Tenant Pays For Grid Electricity Use Normally
The tenant will need to pay for their own grid electricity use. This means they will have to maintain a contract with an electricity retailer and pay for all the grid electricity they use, as well as supply charges and any other fixed costs, which, depending on location and electricity plan, can be over $1.50 a day. Matter will have no involvement with the grid electricity supply.
Matter Suggests Tenants Receive An 18.2% Discount
The landlord determines how much of a discount tenants receive on solar electricity they use, compared to the price of grid electricity. The landlord could provide no discount at all, but they are not allowed to charge more than the price of grid electricity.
Matter suggests a 20% discount exclusive of GST. If you are a normal human being who is just looking at what you actually have to pay for electricity, that comes to about an 18.2% discount. So if you are paying 30 cents a kilowatt-hour for grid electricity, with Matter’s suggested discount, you will save almost 5.5 cents per kilowatt-hour of solar electricity used.
Many retail electricity plans already come with discounts that can be as high as 33%. Matter will check what sort of discount, if any, tenants are receiving, to ensure they pay less than the cost of grid electricity.
Using Solar May Not Save Tenants Much
A tenant receiving an 18.2% discount for the solar electricity they use isn’t likely to save a great deal of money over a year. This is because most households use less than half the electricity generated by rooftop solar.
Tenants who are at home during the day and use an above average amount of electricity may self consume up to 50% of the electricity generated by a 5 kilowatt solar system. It is possible, but unlikely, they will use more. A typical household that often has people at home during the day might only use 30% and people who are usually out during the day may use 10% or less.
So if a rental home has a 5 kilowatt rooftop solar system that generates an average of 20 kilowatt-hours a day, and the tenants self-consume 30% of that electricity, then with Matter’s suggested 18.2% discount and a 30 cent a kilowatt-hour price for grid electricity, they will save around $10 a month or $120 a year.
A generous landlord can increase the size of the discount provided and I am sure there are many of them around. Or at least more than you might expect.
Feed-In Tariffs Can Go To The Landlord Or Be Shared
Any solar electricity not used by the tenant gets sent into the grid and receives a feed-in tariff that is credited to the tenant’s electricity bill. Matter can bill the tenant for the feed-in tariff they receive and send it to the landlord. Matter recommends only charging tenants 6 cents for each kilowatt-hour of feed-in tariff and letting them keep any extra they may receive. Now that feed-in tariffs have increased for the majority of Australians, this can save a tenant far more money than an 18.2% discount on solar electricity.
SA Tenants Could Be Quids In
In South Australia it is now possible to get an 16.3 cent feed-in tariff, which means which means if the landlord takes 6 cents of that and 70% of the output of a rooftop solar system that produces an average of 20 kilowatt-hours a day is sent into the grid for a feed-in tariff, then a tenant could save $44 a month or around $520 a year from feed-in tariffs alone. And that’s not bad at all — for the tenant. The landlord may disagree.
Landlords may not be happy with any situation where tenants can save more money by not using solar electricity and sending it into the grid for a feed-in tariff. This is because the landlord will typically make more than three times as much money if a tenant uses a kilowatt-hour of solar electricity than if they get a 6 cent cut of a feed-in tariff. Landlords want their tenants to be guzzling electricity during the day, not conserving it and receiving a feed-in tariff.
As a result, landlords may demand an increased portion of feed-in tariffs. But this sets up another problem.
High Vs Low Feed-In Tariffs: A Possible Bone Of Contention
Many people assume households with solar are better off with electricity plans that have high feed-in tariffs. But, as I painstakingly demonstrated here, the best electricity plans for a solar household can be those with low feed-in tariffs. This is because electricity retailers often use high feed-in tariffs to lure in customers and then hit them with higher charges that can make a solar household worse off. If a landlord is taking a large chunk of the feed-in tariff, then electricity plans with low feed-in tariffs are even more likely to be the best plan for a tenant.
This can result in a situation where a landlord wants a tenant to take a plan with high feed-in tariff so they can take a large chunk of it, but the tenant will save more with a plan that has a low feed-in tariff. This means the landlord and tenant may need to negotiate to come a mutually beneficial arrangement. For example, the landlord may offer more than an 18.2% discount in return for the tenant using an electricity plan with a high feed-in tariff that the landlord will take a large portion of.
But tenants and landlords negotiating together to arrive at a mutually beneficial position creates a paradox in the Matter energy continuum. This is because if tenants and landlords can negotiate successfully, they may not need Matter to act as an intermediary.
The Matter / Energy Paradox
Matter Charges $14 A Month
In addition to paying $1,500 for their box, with installation on top of that, Matter will charge landlords $14 a month for their services which comes to $168 a year. This fee only has to be paid if the property has a tenant.
Matter Can Arrange For Solar To Be Installed
What Matter says they’ll do.
Matter will provide their services to properties with existing solar systems, but they will also arrange for the installation of solar panels on a property. They are not a solar installer, but work with partners who are. Because they buy in bulk, they say they can arrange low prices.
Matter told me their partners only use tier one panels and mentioned two specific inverter brands that have been used. They were Fronius, which is a very good inverter, and Zever, which is definitely an inverter. I’m not saying Zever is a bad inverter, but it is a lower cost option and, in my personal opinion, not likely to be as reliable as a Fronius.
You can of course arrange to have solar installed yourself and then involve Matter. This will allow you to use an installer and hardware of your preference.
Beware Of GST On Matter’s Business Cases
I’ve had a look at a business case Matter prepared for a property owner in Queensland and they gave a price of $4,397 for a 5.3 kilowatt system. That definitely looks like a good price, provided it is professionally installed and comprised of quality components, but it is before GST. And that is a lousy way to present the price of a solar system, because most people are going to naturally assume GST will come to 10% of that total, but because the price has been lowered by STCs that most people refer to as the “solar rebate” and GST has to be paid on the full price, the actual amount of GST will currently come to about 19% of that figure. That means the actual cost will come to around $5,210.
Hopefully this was just some kind of oversight and Matter will make sure no one who reads their business cases in the future will ever be unclear on how much GST will need to be paid.
Beware Of Self Consumption Figures On Matter’s Quotes
Earlier I mentioned how its very unlikely any tenant would self consume more than 50% of the electricity produced by a 5 kilowatt rooftop solar system. But in the business case I examined, Matter went way beyond that. They assumed the tenant would self consume 70% of the electricity from a 5.3 kilowatt solar system in Queensland.
Matter’s prediction of a 70% self consumption rate for a tenant in black and white.
I am really having a hard time seeing how this could be realistic. I mean, sure it’s possible the business case was done for tenants who are agoraphobic gardeners who grow all their special herbs and spices indoors under bright electric lights. Maybe they’re growing lilies. And gilding them.
Depreciation Improves The Return
Unlike owner occupied solar, installing solar on a rental property is a business expense which can be written off. This significantly improves a system’s return, but by just how much will depend on circumstances.
Total Savings Over A Year For Tenants And Landlords
There are plenty of variables that affect how much tenants are likely to save and landlords likely to make using Matter. But I will make an estimate using Matter’s suggested 18.2% discount and a charge of 6 cents for every kilowatt-hour of feed-in tariff received. I am not going to use Matter’s completely unrealistic self consumption rate of 70% that might only be achieved by herbal entrepreneurs, and will instead use a much more realistic, but still high rate of 30%. My assumptions are:
- The solar system is 5 or more kilowatts and produces an average of 7,300 kilowatt-hours a year.
- The tenant consumes 30% of the solar electricity generated.
- The tenant pays 30 cents a kilowatt-hour for grid electricity.
- The landlord charges the tenant 24.55 cents per kilowatt-hour for solar electricity.
- The tenant receives a feed-in tariff of 11.3 cents.
- The landlord charges the tenant 6 cents for every kilowatt-hour that receives a feed-in tariff.
Under these circumstances a tenant can expect to save a total of $390 over a year. The landlord would receive $844 a year in total, but after Matter takes their $168 in fees it will come to $676.
As you can probably see, when the landlord only gets 6 cents for each kilowatt-hour that receives a feed-in tariff, there is a considerable risk of their return being considerably lower if the tenant’s self consumption falls below what is expected, or if new tenants have lower self consumption.
If everything in the above example is kept the same, except new tenants move in who are out most of the day and only self consume 10% of the solar electricity generated, then the tenants would still save around $390 since their savings from using using solar electricity and receiving a feed-in tariff are almost equal, but the amount received by the landlord would fall to $405 after Matter takes their $168 in fees.
Because of the risk of low returns, landlords are either going to want tenants who are home during the day and who don’t skimp on electricity use, or they are going to want tenants with electricity plans that have high feed-in tariffs and take a large portion of them, so it won’t matter if they don’t use much solar electricity.
Matter Appears Well Worth It — Compared To Not Having Solar
In the example above, the tenant makes a considerable saving of around $390 over a year. While this is much less than the $1,230 a homeowner might save in a similar situation, since the tenant doesn’t really have to do anything to get this saving, the situation for her is pretty much pure win.
The landlord who scraped in $676 a year or potentially less after having paid for the solar system, the $1,500 Matter box, and its installation, may not be feeling so happy. While $676 dollars a year may not seem a bad return on an investment that may have cost around $8,000 or less all up, I suspect that many landlords would be happier if they could claw a couple of hundred dollars from the tenant’s savings for themselves. And since the landlords has a lot of power in this situation, I suspect that’s what many will do.
While Matter’s box is very expensive and there are monthly fees to be paid, because the average return on rental properties is so low, installing solar with Matter can still give landlords a better return than renting the property does. As tenants should save at least a little on their electricity bills, it is possible for both tenants and landlords to be better off using Matter’s services.
But this doesn’t mean using Matter is the best option.
Other Options For Solar On Rental Properties
Landlords looking to install solar on their rental properties don’t have to limit themselves to using Matter or a similar service.
One alternative would be to simply install solar, give the tenant the full benefit of all the electricity generated, and make good on the investment through charging higher rent. I know I would definitely be willing to pay a premium for a rental property with solar.
Another option would be for landlord to have the electricity account in their name and provide electricity to the tenant at a discounted rate. Alternatively, electricity could be provided free as part of the rent or as a fixed charge, potentially with incentives to discourage excessive use. While this is not as easy to set up as it sounds, it is a common arrangement overseas3.
Having An In-between Can Be Worth The Expense
As a final exercise, if you rent, or if you’ve ever rented in the past, I want you to imagine sitting down with your landlord and having a pleasant and amicable discussion where you both arrive at a mutually beneficial arrangement regarding rooftop solar.
What’s that? You say you can’t imagine having anything amicable to do with your landlord? You think, possibly with very good justification, that your landlord is a stingy bastard who will only stop trying to screw you over once pigs fly through Hell’s frozen landscape?
Well, this antagonistic relationship that all too often exists between tenants and landlords is why I think services such as those provided by Matter, or similar companies, may become reasonably popular.
Sometimes the only way things get done is if there is a middleman between two opposing parties, acting as a kind of lubricant to reduce friction. They require payment for their services, so it’s not a perfect solution, but the perfect should not be the enemy of the good.
So I think it is possible that Matter’s business plan could be a success. That is, once they lower the price of their box and give it a better bloody warranty.
Footnotes
- Fortunately their name is not as bad as it could have been, as I checked and there is no one working at Matter whose name is Feekle. ↩
- Solar Analytics charges a $6 a month subscription fee. Note they just provide energy monitoring services and aren’t involved with renting — as far as I am aware. ↩
- I once rented a property where we were charged a flat rate for the electricity we used, but if the amount consumed was excessive we’d be hit with an additional charge. Mind you, that was in a lame country where all the spiders were smaller than my hand and the snakes had to bite you several times before you even felt sick. ↩
About Ronald Brakels
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That’s an interesting concept. I can see the benefit although I have a funny feeling the middleman is the one coming out in front.
As you mentioned solar can be depreciated on a rental property. There’s many rental properties where I am that have solar, simply put these owners can charge a higher weekly rent for the same place, that tenants are often happy to pay. An extra $15 a week rent can easily be recouped with many systems saving more than that per week in electric bills.
Due to their relatively lower costs, even a wind-turbine could be simply plugged into the system, purchased by the renter, at his/her friendly electrical shop or on-line. Installation would be either on a pole or strapped to a chimney! This may off-set some of the usage charge off the solar panels…they are so cheap more than one could be afforded over two or three years.Being low voltage, local councils would not be too concerned with one or two fans spinning madly about and with ‘amateurs’ installing them!
Overhauling these turbines is cheap too and last for app. ten years, initially; the use of top quality brushes and bearings will off-set the power costs even more.
Just a thought
We’re interested in the wind concept, if it’s as simple as you say.
We have a windmill, in great mechanical condition, we’d like to modify to supply power. We intend to replace it with a solar pump… and decommission it.
We’ve heard this can be achieved… but none of the modification processes sound as simple as those you describe.
CORENA has recently funded 2 solar installations under a landlord-tenant scheme that primarily just revolves around the lanlord and current tenant coming to an agreement whereby the tenant agrees to a rent increase of no more than half the anticipated savings on power bills. It’s not an exact science, but both parties do receive benefit.
Once that agreement is in place, CORENA gives the landlord an interest-free loan to cover the cost of the installation, and the landlord signs an agreement to repay the loan over 6 years.
CORENA’s only ‘profit’ in this is that we ALL benefit from the reduced carbon emissions. https://corenafund.org.au/big-win-projects/current-breakthrough-projects/
Six of our rental properties have solar electricity panels. Most have solar hot water systems.
“There is almost no solar on the roofs of rental properties because landlords have little incentive to install it…”
We disagree. Many of our tenants have no power bills, as they’re getting generous payback from the grid. They stay… and stay… and stay.
We value long-term tenants… . We don’t raise the rent of tenants who respect our properties. Some have even bought rentals from us, at the conclusion of leases, saving us agents’ commission.
The (mis)perception that lessors are all just into short-term gain is a fallacy. Lessors who invest in a range of renewable initiatives on behalf of tenants are rewarded, not only in gratitude, but also financially, long-term… .
Thanks for the good work you are doing.
As a home owner this is our experience. In Far North Queensland [FNQ] you can now install up to 10 kW single phase and up to 30 kW three phase. The value of Feed in 2017-18 has increased by 35% up from 0.07c to 0.10c kWh. The cost of Storage versus Feed in can now be calculated. It’s not a magical number really if your Feed in [Export] is 4 times your Import then what is Exported creates a billing credit that can offset or cancel out the cost of what is Imported. The sum therefore is how much solar do you need to achieve that ratio and what is the ROI on that investment compared with achieving the same outcome with Storage. We upgraded our Enphase Micro Inverter System from a 5.75 to a 7.99 kW in June 2017 and should have sufficient production data in the next months to do the ROI analysis. Yesterday [24 hour period] without PV our daily cost would have been $4.81 annualised $1,756.02 with PV 0.20c $73.92 annualised. Consumed 12.82 Produced 28.05 Imported 3.03 Exported 18.02 kWh [Semi Overcast]. Solar for landlords provides for an extraordinary opportunity to offset the cost of any increase in mortgage rates without it flowing into rent especially where the owner of the property becomes the tenants energy supplier.
Landlords can also install solar via finance through their local council, and pay it back via a special charge on their council rates. Advantages:
– Cheap finance, as people don’t often default on rates.
– Automatic transfer to the new owner, if the landlord sells the property.
An example is the “Solar Savers” scheme. May need regulation reform in some states.
https://eaga.com.au/projects/solar-savers/
Is there any way to sell the extra solar electricity on the open market. I read somewhere about a ACT company but not sure if can be done in Qld. Presently I export more than what I use from the grid. I can further expand my solar system if I could make some money from it. Any suggestion?
Not sure where you are in Queensland but regional small customers have a FIT of over 10c/kWh. This is above the average market price in recent months. Most spikes in market pricing are during parts of the day where solar isn’t operating to a large degree, at the moment morning and evening peaks.
Solar isn’t looked upon favourably on a small scale due to variability. Larger solar and wind farms have extensive modelling software that can forecast output to a certain level. You could very likely find a way to bid output however you’d need to wear any associated costs as being a member of the market. Then there’s no guarantee your bid would be accepted. You’re likely better off with a good FIT and optimising your daytime use of electricity. I set my energy hungry appliances to come on while I’m at work, use the vacuum on weekends and set the reverse cycle to come on mid afternoon so the house is warm when I get home. This minimises draw at night, I average 2kWh per day on tariff 11.
Thanks for the great insight, an option I have been considering is the enphase envoy monitored by my agent and billed to the tenants just like rent. I think still the most cost effective solution.
Not a patch on the Eco Supply Australia offer in conjunction with a national retailer.
Landlord installs Solar
Tenant switches to Diamond Energy
Solar consumption separately metered
Tenant receives ONE BILL with solar and grid power shown separately
Tenant receives 25% discount (From Grid Rates) for Solar Consumption
Retailer pays landlord all money received for solar consumed
Retailer pays landlord all Solar feed in tariff
Live online monitoring for Tenant (Savings)
Live online monitoring for Landlord (Earnings)
Super simple, fully transparent, one bill (all billing and collections by retailer) 16% to 30% return to landlord depending on tenant solar consumption but still 16% if tenant uses no solar)
The first truly win win and available for Residential and Commercial landlords/tenants as well.
Available in South East Queensland NSW SA
If you want to know more then email me and I will put you in touch with the right people at Eco Supply…
“While $676 dollars a year may not seem a bad return on an investment that may have cost around $8,000 or less all up”
You should add $300-$400 of interest on $8000. It means that install will never pay for itself. And risks are hight.
Investing same amount of money into house improvements and get return via hight rent may be more appealing and less risky option.
Have you ever come across any figures about how much having solar affects market cost of a house?
As mentioned, I think landlords are in general going to want a better return than that. But putting the money into a house improvement such as a solar system and letting the tenant freely benefit from it and not using Matter’s services and not having to pay for their expensive box or for monthly charges is definitely an option.
I haven’t seen figures for how solar affects the market value of a home. Clearly it would improve it, particularly in Australia where people understand what rooftop solar is and are not likely to be wary of it. But given that the cost of installing solar has continued to fall in price, some people may find their system doesn’t improve the value of their home as much as they may have hoped.
Paul: “Investing same amount of money into house improvements and get return via hight rent may be more appealing and less risky option.”
When interest rates fell (from 9.54% to 4.8%) we “…put(ting) the money into a house improvement such as a solar system and letting the tenant freely benefit from it…” *
We erected solar panels and solar HWS on all rentals which didn’t have these resources. We had solar film fitted to all sun-affected windows, as well. We also added air-conditioning to all rentals which didn’t have A/C.
If you’re seriously into retiring and living comfortably off an income stream based on rentals, you’ll develop long-term strategies which attract and _keep_ the right people long-term. If you see these environmental initiatives as a way to milk extra rent, you probably won’t keep tenants for 5 – 6 years, as we do… .
* We’re not _new_ to rental property. We started back in ’76. Right now, all but one of our nine homes is paid off. The last one will be paid off within another month… . The key to rental success isn’t just _location_. It’s about attracting and _keeping_ the best tenants. (We’ve had queues for our properties, if/when they fall vacant… . ) 🙂
I worked with this company for a short time, and the concept is sensational. However this company’s methods of selling the concept to landlords is misleading, and the returns are definitely not as lucrative as detailed in their business cases. I too took exception that costs were GST exclusive (which, when quoting to residential, non commercial clients in SA is illegal; some energy retailers have been burnt on this point), and ALL their quotes cited full recovery of the solar to the landlords (ie tenant pays max tariff and receives no benefit). But this fell on deaf ears to the business owners, and the person preparing the business cases, who was the son of one of them.
Also, their credit process to recover revenue should tenants not pay are questionable, leaving landlords further out of pocket.
This company has been operating for a number of years yet, so one would assume that if the value proposition of their current product exisited, it would have flown by now.
If another company is offering a similar service, please let me know as I have 4 rental properties I would LOVE to offer this product to tenants. Provided the payback period was reasonable, I would welcome my tenants relief from ridiculously high energy charges.
Hi Anon,
EcoSupply Australia offer their Landlord Solar currently in SEQ, NSW and SA.
If your rental properties are in those areas then you should email me and I will send you a brochure.
What makes their system unique is they have collaborated with a national Retailer who does all the billing and collections for the Landlord.
Tenant simply pays 25% less for green solar power used during the day and Landlord gets the 75% plus any feed in tariff for surplus exported.
Returns can be from 16% to 30% depending on tenant consumption. Typically it works out to be in the low to mid 20’s
Excellent article and panel discussion thanks to the author and other contributors. There is plenty of general information to work with here – thanks folks.
I am in Melbourne, Victoria – do people have any similar comments specific to Victoria?
I think these things are becoming like building maintenance and agree with the longer term view of those who aim to have continuous occupancy – i.e. desirable property to rent and to interest longer term tenants and “gamble” that adding some “extras” will keep your property in the higher end of your property’s rental bracket and continuously occupied – but the hardheaded accountant may not agree. Each to their own.
The agents will tell you most tenants search on price first, and if your “property is perceived as above market rental value people do not even come to an “open”
It never occurred to us that we were ‘gambling’, as you put it, when we used our considerable savings (interest rates falling from 9.54% to 4.7%) to equip most of our rentals with solar electricity panels, solar HWS and solar tinting. We also added air-conditioning to rentals which didn’t have it.
We’re able to claim depreciation on _all_ those desirable initiatives. Moreover, the SES generate electricity for US, when/if rentals are vacant… and YES, we declare that income on our tax. All those initiatives also add capital value to each home.
Having invested in property since the mid-70s, I’m always interested in others’ perceptions related to supply and demand for rentals. It may be true that “…most tenants search on price first…” but we prefer intelligent tenants. They look after our properties, stay longer… and often want to _buy_ ‘their’ homes at the end of leases and tenancies… .
Latest news from WA re our state’s sad lack of support for tenants and the disadvantaged:
https://www.watoday.com.au/national/western-australia/electricity-costs-bring-wa-power-disconnections-to-a-six-year-high-20190413-p51dts.html
No fan of the LNP, but their support for solar energy was visionary.
Pity our feral government is mired in FUD… .
Matter no longer exist. Their proposals were not accurate and their billing very ordinary. The ROI was never realised and the lights went out about 12 months ago. Great concept, terrible delivery