With rising utility bills impacting tenant affordability alongside government targets to cut emissions from buildings, upgrading rental properties to enhance efficiency is becoming essential. However, determining the most effective improvements while balancing costs can be challenging.
This article examines the expenditures and incentives associated with key upgrade types for rental properties in Ireland, assessing the potential financial return for landlords. We also outline expert tips for successfully planning and executing energy-related retrofits.
Insulation: Necessary Foundation for Efficiency
Improving insulation represents one of the most cost-effective ways to boost rental property energy performance. Insulating attics and walls specifically provides excellent bang for the buck. If tenants are paying utilities, insulation helps control their costs while making units more comfortable.
Average costs run around:
- Attic insulation – €1,500+
- Cavity wall insulation – €1,200+
With bills rising, the rental market dominance of older, poorly insulated buildings presents major efficiency opportunities. Enhancements here provide the base to realise benefits from other electrification upgrades.
Transitioning to Efficient Electric Heating Systems
Replacing outdated oil and gas systems with modern electric heat pumps reduces emissions while lowering fuel bills long-term thanks to higher efficiency. High upfront costs are challenging, however.
For a typical house, air source heat pump system costs span:
- Equipment/installation – €8,000-€15,000
- Electrical upgrades – €2,000-€5,000
SEAI grants provide €3,500 per system, but paybacks still exceed five years in most cases. Accessing faster tax relief on capital expenditure would accelerate landlord adoption.
Solar PV Panels: Passive Income Potential
Installing solar photovoltaics (PV) allows landlords to generate electricity onsite for tenant usage. Panels produce income via the export tariff while reducing grid dependence.
Indicative solar PV costs for rental houses run between:
- Equipment/installation – €5,000-€8,000
- Electrical upgrades – €1,000-€3,000
SEAI provide grants up to €2,400. Export payments and lower tenant electric bills can deliver payback in under 10 years as prices rise. Battery storage lengthens payoffs.
Upgrade Support for Landlords Still Lags
While efficiency upgrades require significant capital expenditure by landlords, incentives remain skewed towards private homeowners.
Support expansion includes grants or tax relief schemes focused on the rental market. This would accelerate renewable heating and solar adoption while allowing properties to meet incoming efficiency regulations.
Effective Planning Overcomes Barriers
Advance planning that minimises disruption while aligning upgrades with existing maintenance schedules helps facilitate acceptance.
Liaising with trusted suppliers and electricians also ensures retrofits enhance property values while managing tenant expectations regarding works. Rental market specialists like KPM Group assist throughout the process.
With rising energy prices persisting, upgrading insulation, electrifying heating systems, and installing solar panels can provide solid landlord returns. But customised energy roadmaps maximising incentives along with careful project management are vital to realising the benefits.
Property Management in Ireland
For over 25 years, KPM Group has provided specialist property management services to landlords across Ireland. Our extensive property expertise enables clients to maximise returns and tax efficiency.
KPM’s hands-on rental property management covers everything from market appraisals, tenant finding and rent collection to maintenance coordination and licence renewals. We stay on top of changing regulations and incentives, providing expert guidance to optimise benefits and improve net yields.
Whether you’re considering expanding your portfolio or purchasing your first investment property, KPM Group has the local market knowledge to help you capitalise on Ireland’s landlord tax reliefs.
Contact our property management team today to explore how we can help build and manage your rental property business for optimal returns. With deep expertise across Dublin and regional markets, we have the experience to guide your next steps.
