Blog Post

What is Best, Buy or Lease Solar Panels?

Dustin Edwards • September 4, 2024

Choosing between buying or leasing solar panels can be a crucial decision for investors looking to make their properties stand out with renewable energy. This choice can impact the initial cost, as well as the long-term savings. While installing solar panels on your rental property requires a significant upfront investment there are substantial differences between leasing and buying solar panels. Understanding these factors is essential for making the correct decision for your financial goals. Keep in mind you may need additional work done to the roof in case it may require reinforcing in preparation for the additional weight. 


Today we’ll help to inform you on whether buying or leasing solar panels fits your investment strategy. 


Initial Costs

Naturally when looking at the initial costs, buying solar panels will require a much larger initial investment. This range can be varied however, it is typically between $10,000 to $30,000 for a 1000 sq ft single family home. While this is a high initial investment, owning the solar system outright allows you to have full control over the system and benefit from it long term

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Leasing solar panels on the other hand, requires little to no upfront investment, which may be more manageable for investors who are looking to avoid a large expense. Lease agreements generally have a $0 initial payment, though you’ll be committing to monthly payments for up to 25 years depending on your agreement. This can result in monthly payments of around $100 per month for a 5 kW system. While the yearly saving may not be as great when compared to buying the solar panels, they are still a great feature to emphasize when marketing your rental.


Short Term Benefits

Immediate ownership without an ongoing lease payment has the potential for substantial long-term savings for your tenant while not having to pay for the system every month. This investment can also enhance the property's value and appeal to environmentally friendly  prospective tenants looking for a renewable source of power.


Some of the benefits of leasing include the aforementioned lower initial costs. Though unlike buying them outright, lease agreements can oftentimes include maintenance and repairs as part of the agreement. Whereas when buying the solar panels you or your tenant will be responsible for the maintenance and repairs of the system.


Long Term Benefits

The high upfront cost may be a significant deterrent for some property investors, though financing options and tax incentives can help to reduce this burden. Buying solar panels outright can also help you pass the savings to your tenants which can lead to frequent lease renewals, and reduce vacancy and turnover rates.


On average the total cost over time for the lease term may exceed the cost of purchasing the solar panels. Additionally, due to the leasing company owning the panels, investors may not benefit from tax incentives and other potential long-term savings. Though if the goal is to attract more tenants or to make your rental property stand out, the lower barrier to entry can make leasing solar panels more attractive for many investors.


With more and more electricity being used as we head to the future, it's a good idea to be prepared. Having a solar system can help provide tenants with peace of mind knowing that even during black outs they’ll have power especially if you also install a
solar battery. If you need help deciding whether to buy or lease solar panels or if you need help managing Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online.

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By Dustin Edwards December 19, 2024
If you're properties are suffering from lack of heating this winter, these 3 common issues could be the cause.
By Dustin Edwards December 12, 2024
Although Southern California’s winters are typically mild when compared to other parts of the country, tenants still value a warm home during the cooler months. Taking steps to maintain a comfortable living environment shows your tenants that their needs are being prioritized. This is crucial for tenant satisfaction, especially during the holidays. Below are three methods to help keep tenants warm during the winter season. Maintain Heating System It's required for landlords to provide rentals with a working heating system, however, it's not uncommon for these to fall into disrepair either because of lack of maintenance or negligence. Scheduling regular inspections and maintenance before the coldest weather can help to ensure the heating is reliable and efficient. Cleaning air filters, and checking for cold spots, or irregular noises can help prevent small issues from escalating into expensive repairs. Preventative maintenance can help to reduce the chances of inconvenient calls for emergency repairs. Being proactive with your maintenance can also help you protect your investment while earning goodwill from your tenant. Another factor that can affect your heating system is drafts around windows and doors. These drafts can cause your heating system to overwork which makes the system less efficient, and reliable and ultimately reduces the lifespan of your heating system. You can address this by inspecting the seals around doors and windows for gaps or cold spots. Replace worn-out seals and caulking where it's needed. Offer Smart Thermostats Consider providing your tenants with a smart thermostat for energy-efficient heating. This can not only give tenants control over their comfort, but it's also a great tool to reduce energy usage. By providing this upgrade to your tenant, you show a commitment to your tenant’s satisfaction which can in turn result in a long-term tenant. These kinds of devices definitely benefit your tenants, though they can also contribute to the longevity of your rental property as well. Additionally, you can give your tenant a smart thermostat as a holiday gift . This can show your tenant that you’re not simply collecting rent while protecting your investment. Reverse Ceiling Fans The direction in which a ceiling fan rotates is oftentimes overlooked, and it can have a great effect on the temperature of a home. A ceiling fan is typically seen as a way to cool down a home during the hotter seasons without using the air conditioning . Reversing the spin of a ceiling fan can help to circulate warm air more efficiently during the cold season . This is because warm air rises, and a fan rotating clockwise will push the warm air back down helping maintain warm temperatures. Most fans have a switch on the motor and it is easily accessible for most people with a step ladder. This easy adjustment helps reduce the need for your tenant to use the heating system. Tenants will notice a more consistent and comfortable temperature indoors. This should also help reduce costs on their energy bill. Reversing the rotation of the ceiling fans also takes some of the strain off of the heating system. This helps to ensure it operates efficiently for years by reducing the wear and tear on it. Taking proactive steps this winter season to ensure your tenant’s comfort demonstrates a landlord’s commitment to their tenant’s comfort. A comfortable tenant is a satisfied tenant , which can lead to a long-term tenant and steady rental income. Consider it a small investment for long-term success. If you need help keeping your rental warm or managing Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online .
By Dustin Edwards December 5, 2024
Discover 3 Gift Ideas for your tenants this holiday season.
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