The solar power industry is booming across Australia. However, renters, who make up a third of the population, are largely kept out of this trend, as few rental properties have solar panels.
But studies suggest that people are willing to pay a premium for access to the savings of solar energy. The reduced energy expense is enticing. But many property owners are hesitant, as the expense of installing solar panels can be daunting. But here’s why you can’t avoid it anymore.
1. Solar Homes Are Becoming the New Normal
Landlords need to stop thinking only about rent, as this is not the only thing tenants care about. Instead, landlords need to be concentrated on what will make their property most attractive to potential tenants. And pretty soon, homes without solar panels will no longer be desirable, meaning if you don’t make the switch now, you could be struggling to find tenants in the not-so-distant future.
When this happens, then your property goes from being a nice investment and source of income to a real strain on your portfolio. As a result, it’s smart to make the switch now so that you can enjoy the premiums in the present and stay competitive in the future.
2. The Break-even Point Could be the Same as for Owner-Occupiers
The average cost of installing solar panels is $6200, and this is one of the main things holding people back from making the switch. However, if we consider that adding the panels could allow you to increase rent by $10 a week, this investment, accounting for rental increases over time in line with the market, would pay for itself in ten years.
Homeowners can expect to wait the same amount of time to recoup their investment, but as a landlord, you have an added bonus. After the ten years is up, any extra income you get goes straight into your pocket. And the solar panels will help increase the overall value of your home. A real win-win scenario.
3. You Can Deduct Solar Panels from Your Taxes
The switch to solar starts to make even more sense when you consider that you can claim their depreciation as a tax deduction. The expected life of the average solar system is 10 years, meaning you can deduct 10 percent a year, amounting to around $4000 of tax savings over 10 years, something that dramatically offsets installation costs as well as any added tax liabilities that come from increased income.
Overall, the evidence in support of switching to solar is overwhelming. Consider making the change today so that you can start reaping the benefits right away.