|Every 10 to 15 years, multifamily apartment owners mortgage their existing properties in order to finance the business improvements for the next 10 to 15 years. To determine the property’s value and expected cash flow, a specialist performs a pro forma valuation, estimating many variables including expected rent, tenant turnover and length of stay, operating costs, etc. The valuation helps determine the interest rate offered by the financier—a lower rate translates to higher net profits for owners.
The PNM Multifamily Energy Efficiency Program can help owners incorporate smart, efficient energy design before valuation, leading to increased occupancy, lower utility bills, and a higher property valuation. As owners typically leverage approximately 80% of their property’s value, valuation is critical to securing much needed funding at the best rates possible.
Following are some quick tips to get the best valuation for your building(s) by incorporating energy efficient upgrades.
Reduce energy use through energy-efficient upgrades
Utility energy bills can constitute up to 35% of operating expenses, cutting into net profits. Replacing outdated, inefficient equipment lowers utility bills. Equipment upgrades including indoor and outdoor lighting and swimming pool pumps can pay for themselves within a very quick time period.
Reduce energy use with low- and no-cost fixes
In addition to upgrading equipment, there are many no and low-cost improvements owners can implement to reduce energy use. Simple fixes include turning down the temperature setpoint on water heaters (120°), pools (78°), and spas (96° during warmer months, 102° when cool); using a cover when the pool is not in use; and fixing water leaks around the property.
Reduce maintenance and replacement cost
Repairs and maintenance can represent up to 15% of a property’s operating expenses. Upgrading to ENERGY STAR® products can help reduce costs, as these produces are tested to meet life expectancy requirements before certification—longer lasting equipment translates to longer time between replacements. For example, LED bulbs last up to 50x longer than incandescents, and 5x longer than compact fluorescents. With a useful life of up to 35,000 hours (or 12 years at 8 hours a day), that’s fifty incandescent bulbs and five fluorescent bulbs your maintenance staff will not have to replace, not to mention the cost savings by not purchasing replacement bulbs!
The PNM Multifamily Energy Efficiency Program can help!
By being proactive with energy retrofits before valuation, property owners can maximize the value of their property. The PNM Multifamily Energy Efficiency Program offers incentives and free installation* for many types of energy retrofits including in-unit and common area lighting, HVAC, appliances, and hot water distribution.
*Free installation depends on measure type. Please review our incentives page for full details.