Benefits of solar power for property investors
It’s time to consider the benefits of solar power for property investors in Australia.
It’s no secret that green energy is a blazing market in Australia. As the green energy revolution spreads across the globe, solar power is now impacting on the rental markets of Australia. Investors need to pay attention.
Ask yourself, would your investment property have more appeal to tenants if it had solar panels installed? A recent article in Domain by Daniel Butkovich contained some interesting statistics and information which are quite convincing.
A shining opportunity
Apparently, a survey commissioned by Origin Energy noted that two-thirds of renters would be willing to pay $5 more a week for a property, whilst 55% would be happy to pay $10 more per week.” This could represent savings for the tenant on energy bills of up to $2,500 per year, so the choice of paying more on rent per year of around $500-$1,000 becomes a “no brainer” as the tenant is saving money on bills and the landlord is making more on rent.
Furthermore, the information presented in the Origin survey presents benefits for sellers. “Two thirds of those surveyed said they would pay at least $5,000 more for a house with solar panels over one that didn’t, and more than half would pay up to $10,000 more.”
Solar looks good
Another incentive for having solar panels installed is that they are tax deductible on rental properties. The ATO has determined that a solar system will have a life of around 20 years. Speak to your accountant, however we have been informed that investors can claim 10% decline in value each year, so for an average solar system (typically costing around $6,200), $4,000 in deductions can be made over a 10 year period.
The incentive to install solar is not only a financial one, but also a one of public perspective. As green energy is becoming more and more mainstream, prospective tenants will be drawn to the idea that their home will be powered on sustainable and non-polluting energy. Value for these tenants is not just monetary but also ethical.
Doing their bit to prevent global warming and promote sustainability appeals to both tenants and property investors alike. The cost of this technology is decreasing over time and the quality of storage devices is also improving. We hope that solar power is going to be more and more relevant in the property market in Australia in coming decades.
To discuss buying, selling or renting property in Melbourne or Victoria, don’t hesitate to contact me on 0418 101 146 or jspencer@buyersolutions.com.au
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