Recently, I wrote an article about ESG investing, which stands for environmental, social, and governance. Essentially, the term ESG investing means finding businesses that operate as socially responsible as possible.
Now, as a landlord, there is obviously a lot that is beyond your control. For example, it's tough to force a tenant to conserve electricity and water or dispose of all waste in the proper manner. And a big part of socially-responsible investing involves finding companies who treat their employees fairly, which likely doesn't apply to you as a rental property owner.
However, there are some moves you can make that can increase the energy efficiency and environmental friendliness of your investment properties and make you a more socially-responsible landlord. Here are four examples I try to incorporate into my own investment properties.
1. Tankless water heaters
This is a change I have made to most of my own investment properties. Not only is a tankless water heater 24%-34% more energy efficient than a tank-based water heater, but your tenants will appreciate access to as much hot water as they need, whenever they need it. Tankless water heaters cost significantly more than comparable tank-based units, but they also last twice as long and add value to your properties.
2. Sustainable landscaping
If you hire a company to mow yards, trim branches, or otherwise landscape around your rental properties, choose one that practices sustainable landscaping. For example, my go-to landscaper isn't the cheapest option, but he exclusively uses eco-friendly chemicals and materials.
3. Help your tenants get acclimated
You're a landlord, not a friend to your tenants. But that doesn't mean you can't be helpful and welcoming. One thing I've received excellent feedback on is producing a welcome packet for new tenants. In addition to basic information about procedures and the property itself, keep in mind that your tenants may be moving to an unfamiliar area. Some local advice (best restaurants, nearest grocery store, etc.) and a small welcome gift -- my go-to is a gift card to a local coffee shop -- can be a big help to tenants.
4. Go beyond legal landlord-tenant requirements
It's certainly a good idea to know the landlord-tenant laws in your local jurisdiction. But the socially-responsible best practice is to go above and beyond. Maybe allow tenants who have been great renters to apply their security deposit to the rent. If you legally have X number of days to perform a certain repair, try to do it quicker. Maybe do some research into local housing assistance programs that could potentially help lower-income tenants. And finally, consider slower eviction timetables for tenants going through tough times.
The Millionacres bottom line
Obviously there's some grey area between being a socially-responsible landlord and running a good rental property business. But as we've seen here, there are some smart decisions you can make that can make your investment properties a bit more socially responsible without cutting into your profits too much.
Finally, I want to be perfectly clear that this isn't an exhaustive list. If you're a rental property owner or you have suggestions of other ways to make investment properties more socially responsible, we'd love to hear them. Please send your best socially-responsible landlord suggestions to firstname.lastname@example.org.