The updates you make to your investment property often depend on the type of home you have. A fresh coat of paint goes a long way for a townhome, while premium finishes can transform a luxury home. Solar panels are an added feature virtually every investment property can benefit from due to their energy-saving capabilities.
In this guide, we’ll discuss the benefits of putting solar panels on investment properties, how to know if it’s the right choice for you, and what to expect along the way.
Benefits of Putting Solar Panels on Your Investment Property
Traditional homeowners often install solar panels for a more reliable, eco-friendly energy source. While investors can have similar benefits, they also enjoy other unique advantages when adding solar to investment properties.
Eligible for Commercial or Residential ITCs
Well-managed investment properties don’t just generate profits through the monthly rent. You can earn even more through a combination of tax incentives and/or reportable losses with solar panels. Investment tax credits, or ITCs, allow investors to claim 30% of the cost of the solar panel installation as a dollar-for-dollar tax credit.
Attract More Renters
Many prospective tenants are often interested in a property that has solar panels because they benefit from a reliable energy source and are more sustainable. This can translate to higher rents and more long-term tenancy.
Increase the Property’s Value
Adding solar panels to your investment property has a high return on investment. When selling your property down the road, you can increase the overall price by making it more energy-efficient.
These benefits can make your property investments more profitable and help protect your assets.
Considerations Before Investing in Solar Panels
Before installing solar panels, make sure the project is the right fit for the property and that the solar panels make financial sense. Ask yourself:
- How long are you going to keep the property? This can help you decide whether you want to buy panels outright or have a longer-term financing arrangement like leasing.
- What panels will work best? Solar panels come in a wide range of efficiency levels depending on their materials, with some performing better in hotter temperatures, for example. Shop around for panels that fit your budget and performance requirements.
- How many solar panels do you need? You can calculate the number of panels you need for your property’s size based on general consumption trends and your available roof space.
How Does It Work for Someone With an Investment Property?
When you add solar panels to your investment properties, you’ll want to consider the upkeep they will entail to ensure they last a long time. This often includes cleaning the panels of debris, making sure bird deterrents are in place, and ensuring the electrical hardware is performing adequately.
Adding solar panels to your investment property will also impact your taxes. Claim your tax credit properly to get the maximum savings and return. You can also look for local or state programs and tax incentives that encourage the use of solar panels.
Enhance Your Investment Property With Solar Panels
Solar panels are a sound investment for many real estate investors, both for commercial holdings and residential properties. Download our Ultimate Guide to Going Solar to learn more. For specific questions about your property, reach out today to speak to our solar energy professionals.
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