“Hey, buddy! A couple in Bridgeport just called me and they need out of their mortgage bad. I looked at the place yesterday. All it needs is some paint and freshening up!”
It sounds like a dream investment property, doesn’t it? As a HomeVestors® Development Agent, I love seeing my franchise mentees’ faces light up when they know they’ve stumbled upon the real estate investor’s trifecta: A motivated seller conversion, low-cost investment opportunity, and a simple rehab. It just couldn’t get any better for a new investor, or so they think. Until, that is, I tell them about how to make the property shine even more while increasing their returns with free or discounted investment property upgrades from their local utility provider.
WHAT INVESTMENT PROPERTY UTILITY UPGRADES ARE AVAILABLE?
Many utility companies, like Commonwealth Edison (ComEd) in Illinois and Pacific Gas and Electric (PG&E) in California, offer a variety of incentives to help households reduce their energy use. Many of these incentives can be easily leveraged by investors who are seeking to make a home more energy efficient and more attractive to prospective home buyers. But, going green is more than just a savvy investment property marketing technique. By taking advantage of these programs, you can save money and even get some significant cash back. Let’s take a look at the kinds of upgrades utility companies typically offer:
FREE ASSESSMENT AND INSTALLATION OF ENERGY-SAVING PRODUCTS
When buying, renovating, and selling houses, it’s easier—and cheaper—than ever to make your investment property more energy-efficient. If your utility provider offers incentives to do so, the first step is usually to arrange for an energy advisor to visit the house to perform an assessment that will result in personalized recommendations on how to conserve energy. An assessment normally includes a visual inspection of the heating and cooling systems, as well as the water heater and attic. Your advisor will then make recommendations for energy-saving solutions and, often, even install some products for free, including compact fluorescent light (CFL) or light-emitting diode (LED) bulbs, programmable thermostats, water-saving showerheads and faucet aerators, as well as hot water pipe insulators.
NEW APPLIANCE REBATES
Installing new appliances anyway? Let the electric company cover some of the costs! If the property is currently serviced by a utility company that offers rebates, all you usually have to do is buy an ENERGY STAR® product from a retailer of your choice and send them the receipt. Currently, for ComEd customers, a new air purifier, washing machine, dryer, or refrigerator you will get a $50 check in the mail. If you replace the freezer, air conditioner, fan, or water dispenser, they will send a rebate of $25. You can earn an additional $50 for letting them haul away your old refrigerator or freezer. Customers of Baltimore Gas and Electric (BGE), in Maryland, can get up to $100 for new washing machines and refrigerators. Even better, if you change out the heat pump water heater, both of these companies—and others like them—put $500 back in your pocket! Finding out what incentives are offered is easy too; a visit to your utility company’s website should give you all the info you need.
HEATING AND COOLING REIMBURSEMENTS
Many utility companies will reimburse at least a portion of your costs if you upgrade the heating and cooling systems. In Chicago and Northern Illinois, you can get up to $6,000 from ComEd for upgrading the heating and cooling units in your properties. Systems that are covered by their program include central air conditioners, heat pumps, furnace blower motors, heat pump water heaters, and geothermal heat pumps. In New England, homes serviced by Eversource Energy can qualify for as much as $3,250 in heating and cooling system rebates. In most cases, you’ll need to have a contractor help you who is familiar with the rebate process. And, if you are going geothermal, you may have to hire an approved contractor. But, because reimbursements can be substantial, it’s certainly worth checking with your local service provider to see what rebates are offered and how to qualify.
For homes that are primarily heated by natural gas, some utility companies offer significant rebates if you make weatherizing improvements. Chicago’s ComEd partnered with three local gas providers to offer instant rebates of up to $1600 for sealing air leaks and insulating key areas of the house. An instant rebate means that you have to have the work done by one of their select contractors who will deduct the program-covered amount from your invoice. Eversource Massachusetts also recently partnered with local gas providers to offer customers up to 75% off insulation services through the end of the year. And, several utility companies offer zero percent financing on the cost of weathering improvements as well. Of course, there can be caveats to these incentives. ComEd’s program, for example, doesn’t cover projects that involve gutting a home, converting a property, or building additions onto a house. But, as long as you read the fine print and talk to an advisor whenever you have questions, you should be good to go.
THERE’S EVEN MORE INVESTMENT HELP AVAILABLE, TOO!
Some of the products frequently covered by your local utility providers’ different programs, like heating and cooling units, will inevitably have to be replaced at some point. So, it makes sense to take advantage of these money-saving offers. Some of the other programs, however, will not add significant monetary value to a property. Even still, the energy savings could be leveraged in marketing the property—especially if you are marketing your property to environmentally-conscious Millennials. Either way, these programs can improve your bottom line. I frequently recommend many ways to improve efficiency to new HomeVestors® franchisees in my area. As a Development Agent, I am devoted to providing reliable leadership to strengthen their business. And, I do it for free. Having expert, on-call advice is just one of the many perks that come with being an independently owned and operated HomeVestors® franchisee.
To learn more about how you can become a HomeVestors® franchisee and improve your real estate investing bottom line, request a franchise information packet today!
Each franchise office is independently owned and operated.