House Flipping: The Value of Energy Efficiency

Real estate investor planning energy efficient house renovation.

If you are a fix and flip investor who is looking to maximize profit when flipping houses, you have to consider so many different details. Your renovation plan should be carefully budgeted and detailed to ensure you get the best return on investment (ROI) from the property. One issue you need to consider in today’s real estate market is energy efficiency.

21st Century home buyers are looking for energy-efficient homes. They are also looking for more technology and other features, but those are different stories for different PropertyLark Blog articles. Today, we want to talk about ways to increase home value by improving the home’s energy efficiency.

Understand the Current Energy Consumption

One of the first things you can do is to perform an “energy audit” for the property. Figure out the average utility bills (don’t be afraid to ask the seller what they pay for electric, gas and water each month). You can also check with the utility companies and figure out the energy consumption costs associated with the house. This energy audit will help you determine where to focus your time, money and, yes, energy, when making upgrades during the renovation stage.

Do Your Research

As you explore energy efficiency upgrades, be sure and research all the tax credits and benefits that may come with certain upgrades. Understand the costs to make the upgrades and then how much they will save the homeowner in the long run. This information will be very valuable when it comes time to sell the property and attract more buyers.

Prioritize Your Upgrades

You have a budget and you may not be able to make all the energy efficiency upgrades that you would like. That’s okay. This is why you have a plan and can prioritize how you invest your capital.

Here are some of the best energy upgrades, from least expensive to most:

  • Insulation—Insulation is one of the least expensive energy efficiency upgrades you can make. It may not be a sexy part of remodeling, but it is necessary and modern insulation can save a homeowner so much money over time.
  • Appliances—Next, you want to look at the appliances. Install new appliances that use less energy. Many Energy Star rated appliances will offer tax rebates and deals that benefit you during purchase and installation. Meanwhile, the long-term savings they offer will be a strong selling benefit for potential buyers.
  • HVAC System—You will also want to look into installing a more efficient heating, ventilation and air conditioning (HVAC) system. This may include a smart thermostat that allows the homeowner to maximize energy savings.
  • Windows—Replacing all the windows in a house isn’t cheap, so you definitely want to research your options. The savings may also take longer to truly pay off and your investment may not be fully paid off in terms of a measurable boost in resale value. It is worth considering if the current windows are really bad, but it’s a good idea to crunch the numbers first.
  • Solar Panels—Solar energy is great and the new homeowner will love it. However, it is an expensive investment for a house flipper. Understand your options and figure out if a solar upgrade will be worth your investment. There may be renovations you can make to make the house “solar ready” without actually installing the expensive panels and control systems.

These are just a few tips to help you be a more successful fix and flip investor. It is important to plan your budget and figure out the best ways to spend your time and money. This will help you maximize your profits in the end.

If you are a house flipper, consider joining the exclusive PropertyLark home buying network to gain access to our excellent home search tools, property analytics and other resources that will help you get the best ROI from your investments. To see if you qualify, please fill out the contact form and brief questionnaire on the buyer’s pages of our website.