Last Updated on October 24, 2023 by Neil Sharma
Investing in Energy Star-grade upgrades can yield investors higher returns.
According to Corey McBurney, president of EnerQuality, which partnered with Natural Resource Canada to develop the Energy Star certification, smart technologies lower investors’ expenses.
“It’s twofold,” said McBurney. “If you’re renting out to a tenant, the core value proposition is energy savings, so your monthly operating cost, if you own an apartment building or a single unit, comes down because the occupant enjoys the same level of comfort and temperature, yet the cost is reduced because you’re installing advanced measures, whether they’re lightbulbs or things around the actual construction of the building, like a big mechanic HVAC system.”
The asset’s value will also appreciate down the road with Energy Star certification. A major reason, says McBurney, is because consumers are attentive about environmental concerns.
“The resale value—and your monthly operating net—and an added brand bump of being a third-party certified government-backed building will make it a more attractive product down the road,” he said, adding there’s a huge market in the purpose-built rental sector for energy-saving buildings.
“If you’re building purpose-built rentals, you’re holding property. The owners are keenly interest in, not just their one unit’s energy savings, but the building as a whole, and it’s important to that class of investor and developer, but it applies equally to the condominium sector. Whether an investor or somebody buying their home, the same logic applies.”
Ankur Puri, a strategic real estate investor, speaker and mentor who runs Ank Real Estate Investments Inc., can attest to the value Energy Star-approved renovations provide both properties and bottom lines. He renovated a home in Ingersoll, ON, and renovated it to Energy Star code.
“I changed the windows, the insulation in the basement and a few other things required to the get rebate from the government, which amounted to $3,771, he said. “When I do the renovations, I’m putting all the money in by myself, but there’s a process to make sure you get the money back.”
An inspector will examine the property and rate it before renovations, provide a list of necessary upgrades, and return once they’ve been completed.
Neil Sharma is the Editor-In-Chief of Canadian Real Estate Wealth and Real Estate Professional. As a journalist, he has covered Canada’s housing market for the Toronto Star, Toronto Sun, National Post, and other publications, specializing in everything from market trends to mortgage and investment advice. He can be reached at neil@crewmedia.ca.
