Managing Utility Costs in Rooming Accommodation

Hive has experienced strong demand for all inclusive rental properties from students & young professionals. For many renters, the prospect of moving into a property and paying just one all inclusive rental rate holds unparalleled appeal.

Managing your outgoings is critical to managing your investment returns in rooming accommodation. With all Australians experiencing rising electricity, gas and water prices it is more important than ever to ensure utility consumption is effectively managed at your properties.

The best way to control outgoings is physical controls as influencing tenants to reduce usage can be difficult and the effects vary. As such this article will focus on physical installations and controls.

 

Lighting 

LED Lighting

LED lights are the latest technology in energy efficient lighting. LED stands for ‘Light Emitting Diode’, a semiconductor device that converts electricity into light. LED lights are super energy efficient, using approximately 85% less energy than halogen or incandescent lighting – meaning significant savings on your power bills. LED lights also have a much longer lifespan than other types of lighting - see the table below.

 

Lighting technology

Estimated lifespan*

LED

25,000-50,000 hours

CFL

8,000-15,000 hours

Halogen

1,000-5,000 hours

Incandescent

1,000 hours

*Depending on the globe

 

Lighting Timers/Controls

Installing timers on external lights and even bathroom lights or seldom used hallway lights can be very effective at reducing electricity consumption as external and common area lights are commonly left on in rooming accommodation properties.

Pneumatic timers such as those below should be used in carparks, external lights and even bathrooms/hallways. They are also available in hose-proof versions for external use. The timers are generally adjustable but normally set at about 20 minutes. They cost about $70 + installation and can simply replace an existing light switch meaning there is no need to run additional wiring etc.

 

 

Source: Sparky Direct, 2018

 

Motion Sensors

Commonly seen on your garden flood lights, motion sensors can be purchased separately and wired in. Though uncommon, you can use these in common areas to prevent lights being left on where they will shut off after a specified length of time if the tenants leave the area.

 

Source: Sparky Direct, 2018

 

Smart Home Solutions

This solution should be considered in new builds as it takes the solutions already mentioned above and integrates them while adding additional controls for the owner. They can also be done retrospectively by replacing light switches using a product by Clipsal called Iconic which essentially replaces your light switches with smart switches that contain bluetooth connectivity, thereby allowing you to control them or change the timers/settings via bluetooth as needed.

Using smart wiring you can set different lights to automatically turn on/off or brighten/dim at different times of day. Want your room lights brighter to allow students to study but common area lights dimmer to save power and automatically turn off after a certain time? This can all be done using smart systems.

 

Air-Conditioner Controls

 

Air-Conditioning is becoming more important as owners compete for tenants, however in rooming, where tenants are not paying the bills it can be easily abused creating headaches when the quarterly bills roll in.

A company called Aircon Off manufactures two great products that are compatible with the vast majority of A/C brands and are highly recommended for owners with split systems.

 

Aircon Off - Smart Remote Pro

This remote replaces your existing remote control and allows you to set minimum and maximum temperature ranges for your A/C, ensuring tenants can only operate it in its most efficient range and not crank it down to 18 degrees all day.  WIth each degree reduction in temperature decreasing running costs by up to 10% this is an amazing product. Even better, it features a Placebo Effect Screen that tells the tenant they’ve turned the A/C all the way down to 18 degrees while only sending the signal to the unit to cool within your specified range. The tenant is happy, and so will you be, come bill time.

Aircon Off - Smart Occupancy Sensor

The Smart Occupancy Sensor is a wall mounted sensor available in 240V or battery powered versions.  The 240V version is recommended as it eliminated the need for maintenance/batteries. The unit features a motion sensor and can shut down the A/C if the tenant leaves the room. If you want it do this during the day, but not turn off at night while a tenant sleeps, you can program this function too. In addition you can program the sensor to shut down the unit at preset times. It can even detect open doors and windows and shut down theunit if tenants leave windows open while the A/C is on, which believe it or not can happen.

 

Water

Controlling water flow has dual benefits. Primarily reducing water use will reduce your water bill but it will also save you money on your gas or electricity depending on what powers your hot water system.

Tap & Shower Flow Restrictors

Taps, shower heads and toilets are available in different grades of water efficiency which relates to their flow rates of L/Minute. The below spreadsheet details the flow rates as specified under the Australian Governments Water Standards and Efficiency Labeling Scheme (WELS).

 

Australian Government Water Standards & Efficiency Labeling Scheme

Source: Australian Governments Water Standards and Efficiency Labeling Scheme (WELS), 2018


Based on our experience Hive recommends utilising shower heads in the 4-5 Star Range, kitchen taps in the 4 star range and bathroom/other taps in the 5 Star Range. The reason we recommend higher pressure in the kitchen taps is to provide extra pressure/flow for washing dishes, having the extra flow on this one tap will prevent tenant complaints.

Toilets should also be installed using the most efficient version possible, though this is normally only done during new construction or renovations due to the prohibitive costs of replacing toilets.

In order to reduce flow rates you do not need to replace expensive shower heads or taps, inline flow restrictors for shower heads are available as are aerators that restrict flow for taps. They start at about $10 each.

Flow Restrictors (Source: Bunnings, 2018)

 

Aerators (Source: Bunnings, 2018)

 

You should also consider the electrical timers mentioned in the above electrical section. Having a 10 minute timer on your lights in the bathroom might stop a tenant staying in the shower after the power cuts out.  Particularly if the light switch is out of reach. If wiring new builds consider putting the switch outside the bathroom so the tenant can’t just reach out of the shower for another 10 minutes of light.

There are pros and cons associated with leasing your investment inclusive of utilities. It’s about choosing a fit that is right for you and your investment. It is especially important to make informed decisions with the assistance of professionals. If you’re thinking of including utilities in your leasing agreements, talk to Hive Property Group to gain expert advice on 1300 882 326.

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