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8 Ways Landlords Can Lower Utility Costs

January 20, 2021

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How Can Landlords Lower Utility Costs?

One of the greatest expenses that landlords face is the cost of utilities. Even with tenants paying for heat, water, and electricity, common area utilities are likely still a considerable drain on your monthly income, especially if you have vacancies. The good news is that landlords have a myriad of options when it comes to reducing their utility costs. All it takes is a little bit of ingenuity. 

We’ve broken down each of our 8 recommendations for reducing utility expenses into 3 sections. The first provides a general explanation of the method, how it will reduce utility costs, and how it might work for your business. The next section provides a step-by-step process of how you can go about implementing the method, and the last section lays out what you can save. This final section is divided into what it’ll cost you to carry out the method and what you stand to save. These sections will allow you to determine which of these ways of reducing the cost of utilities make the most sense for you and your business. 

Use Green Appliances 

How using green appliances reduces utility costs: 

As we’ve discussed in previous sections, investing in green appliances and creating a more energy-efficient property has many benefits — one of which is lower utility bills. Landlords have plenty of options when it comes to green appliances, especially as we continue to see the market grow. It doesn’t take much searching to find such appliances; just look for the Energy Star mark when shopping. Landlords can potentially replace dishwashers, washers and dryers, refrigerators, and more. We recommend easing into the world of eco-friendly appliances. There is no need to rip out your current appliances that are still in good working order. Instead, consider upgrading appliances that already need replacing with greener alternatives. 

Although there will be an up-front cost for going green, it will be worth it for you and your tenants in the end. Not only will you see lower utility costs, you’ll also be able to use your green appliances as a marketing tool to attract prospective tenants. What’s more, you’ll be able to increase the property’s rent as a result of upgrading to better appliances. 

How to begin using green appliances: 

  1. Assess your property. Figure out what needs replaced and which appliances make the most sense for you to upgrade. 
  2. Shop around. Not all green appliances are created equally. Find appliances that are reasonably priced and promise low energy use. 
  3. Install appliances. 
  4. Increase rent accordingly. To boost your return of investment, charge tenants a little more each month. Even though they will pay more in rent, they will still pay less overall. 

What you will save: 

Up-front cost: $300-500 per appliance. 

Potential savings: Up to 30% of yearly energy bills. 

Insulate Windows 

How insulating windows reduces utility costs: 

The older your property is, the more likely your windows are allowing heat to escape during the winter. This requires tenants to turn up the heat, leading to greater costs for both of you. The good news is that you have a few options when it comes to insulating windows, all of which are inexpensive. 

Windows can be insulating using plastic liners that minimize draft and reduce loss of heat through gaps. These plastic liners are only a few dollars each and take minutes to install. You can also buy specialty drapes that minimize draft, trapping in the heat. These come at a slightly higher cost, but still won’t break the bank. Additionally, you can choose to combine these two methods for maximum draft prevention. 

How to begin insulating windows: 

  1. Determine your method. You must first decide if you want to purchase liners, drapery, or both. We recommend only using the drapery in conjunction with the liners for optimal insulation. 
  2. Purchase the product. Be sure to shop around and find the best deal. You’ll likely find that buying large packs of liners is cheaper than buy individuals/small bundles. 
  3. Install the insulation. Either you or your maintenance team will have to install your choice of insulation. This shouldn’t take more than a few minutes per window. 
  4. Replace when needed. While tenants can leave liners and drapery up year round, it will need to be replaced at some point due to normal wear and tear. Be sure to check when you do your regular rounds. 

What you will save: 

Up-front cost: $4-5 per window insulation kit; $15-30 per draft prevention drapery per window. 

Potential savings: Up to $100 each winter. 

Change Air Filters 

How changing air filters reduces utility costs: 

Energy Star recommends changing your air filter at least every three months. This may seem excessive, but it’s a quick switch that has a demonstrable impact on both air quality and the efficiency of your heating and cooling sources. Dirty filters reduce the amount of air that can get through, thereby reducing efficiency, jacking up heating bills, and creating lasting damage to your heating system. These effects are intensified during the winter months when your system sustains greater use, as well as if your tenants have pets — their dandruff will only cause further wear. 

How to begin changing air filters: 

  1. Buy the filters. Purchasing bulk packages will likely be the cheapest option. 
  2. Replace the filters. You can either have your maintenance team install new filters or drop them off to your tenants for them to install themselves. Having your maintenance team do it will take up more of your time but will ensures that the job is done correctly. 
  3. Stay on schedule. Be sure to set reminders so that you replace filters regularly and consistently. 

What you will save: 

Up-front cost: $5-10 per filter. 

Potential savings: 2%-7.5% of monthly energy bill. 

Change Light Bulbs 

How changing light bulbs reduces utility costs: 

Although buying the cheap, store-brand light bulbs may be tempting, spending a little bit more will save you money in the long run. Energy-efficient light bulbs — halogen incandescents, LEDs, and CFLs — can greatly reduce your energy costs. These bulbs also last longer than traditional light bulbs, meaning you’ll spend less on replacements overtime. 

How to begin changing light bulbs: 

  1. Pick your new bulbs. Shop around, compare prices, and consider the benefits of the different energy-efficient bulbs before purchasing. 
  2. Purchase the bulbs. Buying in bulk will likely be a better deal than buy individuals/small bundles. 
  3. Install the new bulbs. You can either replace the bulbs yourself or have tenants do it. 
  4. Encourage consistency. While tenants may think it’s easier to replace bulbs themselves rather than putting in a maintenance request, encourage tenants to do so anyways. It will save both of you money in the long run. 

What you will save: 

Up-front cost: $3-10 per light bulb. 

Potential savings: 25%-80% of the energy cost for using traditional bulbs. 

Avoid Heating Devices That Use Electricity Or Heating Oil 

How avoiding heating devices that use electricity or heating oil reduces utility costs: 

Electric heating is the most common form in the United States, but it is also one of the least efficient. As notes, “Most electricity is produced from coal, gas, or oil generators that convert only about 30% of the fuel’s energy into electricity.” Making a switch to a more efficient heat source can make a massive impact on your energy costs. One alternative is combustion appliances — on-site natural gas, propane, and oil furnaces — but these come with drawbacks. Your best bet is to go with modern alternatives like geothermal and solar energy. 

Although investing in more efficient heating options comes with an up-front cost, you’ll save thousands overtime. Not only will your energy bills decrease dramatically, you will also be able to sell your excess energy back to the grid, opening a new stream of revenue. 

How to avoid such heating devices: 

  1. Do your research. Before investing in renewable energy, you should have a solid understanding of all your options, what they’ll cost, and how much they’ll allow you to save. 
  2. Install the energy source. To ensure that the job is done correctly, hire professionals to perform the installation. 
  3. Take advantage of green tax. There are substantial tax breaks available to those who invest in green energy sources. Be aware of all that apply to you. 
  4. Charge tenants. You can either increase tenants’ rent or charge them directly for the use of your energy. 

What you will save: 

Up-front cost: $10-15k after tax credits. 

Potential savings: $600-1,500 per year. 

Use Shady Landscaping 

How using shady landscaping reduces utility costs: 

One of the greatest ways to reduce energy costs is to utilize shady landscaping. claimed that neighborhoods with adequate shading experience temperatures of up to 6 degrees cooler than unshaded areas. Implementing trees, bushes, and other landscaping features that provide shade will demonstrably lower your costs of cooling. The fact that updating landscaping increases curb appeal is just an added bonus. 

How to begin using shady landscaping: 

  1. Research your area. What will grow well in some places, will fail in others. It is important to know what will do best in your area before purchasing. 
  2. Make a plan. Figure out where landscaping should go to maximize shading. 
  3. Shop around. Find the best deals on trees, shrubs, bushes, and vines. 
  4. Contract out the work. Hiring a professional will yield the best results. Go with a landscaping company within your price range that you trust to do a good job. 

What you will save: 

Up-front cost: $50-200 per tree. 

Potential savings: Up to 25% of your summer cooling bills. 

Change/Lower Water Heater Settings 

How changing/lowering water heater settings reduces utility costs: 

Typical water heaters come with a default setting of 140 degrees fahrenheit. Do you take 140 degree showers? Your answer is more than likely “no.” You can turn your water heater down to as low as 100 degrees fahrenheit, and it will go mostly undetected. This will drastically cut down your energy bills, and it costs you nothing to do. 

How to begin changing/lowering water heater settings: 

  1. Settle on a temperature. While you can go down to 100 degrees fahrenheit and few of your tenants will notice, we recommend 110-120 degrees fahrenheit. 
  2. Adjust the settings. Find your water heater and set the temperature dial accordingly. This should be easy to do and take only a few minutes of your time. 
  3. Gauge tenants’ reactions. You don’t have to upset your tenants to capitalize on this little hack. If they complain about the water temperature, readjust. 

What you will save: 

Up-front cost: $0 

Potential savings: 3%-5% of energy bill per 10 degrees fahrenheit dropped. 

Use A Water Heater Blanket 

How using a water heater blanket reduces utility costs: 

A great way to reduce your monthly energy bill is to insulate your water heater with a heater blanket. They are relatively inexpensive and help hold in the heat, thereby requiring less energy. Water heater blankets extend your heater’s life, reduce energy costs, and are considered to be eco friendly. 

How to begin using a water heater blanket: 

  1. Purchase a blanket. Although some insulation blankets can get pretty pricey, the cheaper ones work well enough to be worth it. Shop around and find the highest quality for the lowest price. 
  2. Install the blanket. Heater blankets are usually installed by simply wrapping the blanket around the heater and securing it with duct tape. This shouldn’t take but a few minutes. 

What you will save: 

Up-front cost: $20-30 per blanket. 

Potential savings: $30-60 per year 


Lowering the amount of money you pay to utilities providers isn’t just about going green, it’s about making more revenue too. A small investment here and there can save you significant chunks of change in the long run. You can also save your tenants some money if they’re paying for any utilities themselves. Don’t be afraid to market this as an upgraded feature. Let your renter’s know that you’re conscientious of their spending and you’ll be rewarded with better tenants willing to pay more in rent. All-in-all, reducing utility costs is a smart investment for any landlord. 

For more interesting articles on managing your properties, be sure to subscribe to our blog, like us on Facebook and follow us on LinkedIn.

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