Adding Equity Through Solar Panels?

I doubt it will increase the value by anymore than $10k (at best).

As I see it, adding value through renovations/improvements works best with items that make an immediate impression like new paint, new kitchen, bathroom renovation etc. These are things that add a wow factor and play on the emotional side of the buyer. Another reason is that fpr $10k, you will hopefully be able to complete renovations that would cost some people $30k to complete by doing some of the work yourself, by organising trades efficiently and by making smart purchasing decisions.

With solar panels, it is easy for a buyer to just arrange to get them installed themsleves, so if they had a choice between your house and one that was pretty much the same but $10k cheaper, they are just as likely to buy the slightly cheaper house and make one phone call to get some solar panels installed (or even make an offer for $5k more for your house as they figure they could buy your house and save money as the solar panels are already there). However if that house for $10k cheaper had a far inferior kitchen and a run down bathroom, then it would be very likely that they would pay $10k extra to buy your house because it looks much nicer and they could see themselves living there and impressing their friends with how nice the house is.

We understand that your house is new- it is just that renovations and value adding strategies are usually confined to older houses as it is very hard to add value to a new house as they typically already have all the features that the target market wants.

Anyone else have sopme thoughts?

Luke.

Just check the fine print, we have solar panels on our PPOR (50.5c Per KW) and it is my understanding that if/when I sell the house the new owner has to re apply for a new contract at the existing tarrif (if it is still going- our would now be 42.7c) therfore not providing a real selling point for potential buyers.

It may be green, lower your running costs etc but it means jack yo anyone who is not paying your electricity bill as they aren’t living in the house & can’t see any value in it.

Would a tenant pay more for a house with “free” electricity and the option to be a bit wasteful with electricity ?
Surely the answer is yes.
So if you get more rental income from your property, that should affect the value.
Cheers
thecrest

As far as I know, it id the occupant who enters into a supply contractwith the energy company at the prevailing feed-in tarriff. If you change supplier or tenant or contracted parties you go on yo the current tarriff. The high feed in tarriff is no longer available to new customers…..It does not pass with the house.

As far as adding value, sp are a diminishing asset,the return generated is linked to usage, feed in tarriff & efficiencies of the system. Greater efficiencies are becoming the norm due to technological advances, reduced capital costs etc. From a val. perspective, running costs are not part of the considerations when determining value (like good design) so returns aren’t considered material in the residential valuation methodology.

1) No two properties are identical
2) Houses are not valued on the basis of capitalisation of returns, direct comparison and summation are used.
3) The return from the sp goes to the user not the investor
4) $3900 pa is a substantial return which would not be indicative of the feed in tarriff unless the installation was substantial ie more than your 10 pane/1500 wl system and pays no consideration to the initial infrastructure cost.
5) Market forces are in play.

If this were a commercial property, the income generated would still benefit through tenant and the effect on value would be considered if it increased the nabers ratings resulting in a higher effective net rent.