A quantity surveyor company is encouraging landlords to “go green” on their investment properties and reap the financial rewards.
MCG Quantity Surveyors managing director Mike Mortlock (pictured above) said the old trope was that you could either be a raging capitalist investor or an eco-warrior, but not both.
“I beg to differ because there are ways to improve your investment’s green credentials while boosting the rent and minimising your tax burden through cost write-offs and depreciation benefits,” Mortlock said.
“The issue is more poignant than ever after Australian voters voiced their support for climate change action at the federal election this year. We have reached a point where the public values eco-friendly moves designed to help address climate action.”
A recent money.com.au survey found energy prices were predicted to soar 30% in 2023, so the majority of Australians should brace to spend on home upgrades in a bid to reduce their bills.
Mortlock said this extends to housing too, with energy-rated design part and parcel of most building approvals as energy-saving measures in investment properties resulted in more tenant appeal, and therefore higher rents, lower running costs, depreciation benefits and a cleaner planet.
In October, Bendigo and Adelaide Bank announced it was charging ahead on its green mission by putting more electric buses on the road. This was thanks to a new Bendigo and Adelaide Bank equipment finance loan where two new electric buses were now driving on Melbourne roads.
Mortlock has listed five ways property investors can help both the planet and their bank balance:
Heating and cooling
Mortlock said warming and cooling were usually major carbon emitters with air-conditioning systems and high-energy heaters all hurting the planet.
“There are moves you can make that will keep the environment happy,” he said.
“Insulation to roof and wall cavities is an excellent start. For around $2,000, you can have your ceiling blanketed and this can be claimed as a capital works deduction. The installation of a ceiling fan helps too and if it costs less than $301, the outlay is fully depreciable on your next tax return.”
Power generation
Mortlock said going off-grid was a move many found appealing and there were ways to create independent energy sources on a small suburban block.
“Solar systems and battery storage are easy retrofits,” he said. “While not cheap, a decent system installed will cost between $5,000 and $15,000, but they can be worth it. Apart from being appealing to tenants, installing solar allows you to depreciate its cost by 10% a year.”
Water collection
Mortlock said water tanks had been a staple in Australian homes for decades.
“Using tank water for toilets and washing machines makes sense, also they keep the possibility of tenants having to pay excess water charges to a minimum,” he said. “This can mean a rent boost for the right property as water tanks can be installed and plumbed into a home for well under $10,000.”
Future proofing for cars
Mortlock said there was no doubt we’re heading towards a future of electric vehicles.
“As this develops, why not consider fitting out your garage with a car charger,” he said. “This would appeal particularly to tenants in the inner city who are keen to keep their Teslas topped up. Domestic car chargers cost around $750 to $1,500 and I’d expect eventually we’ll see them going into properties as regularly as water tanks.”
Gardens a-growin’
Mortlock said landscaping with mulching and natives made good sense.
“Natives are low maintenance plants that don’t consume much water and they also do their bit in converting back carbon emissions,” he said.
“A thoughtfully designed landscape might set you back $10,000 to $20,000, but you can claim some of it back through your tax return. Things such as plants and turf won’t attract any deductions, but hard landscaping such as retaining walls, paving, concreting and fencing will.”
