Take The Heat Off Your Utility Bill Budget With Warmer Water
Most owners would love to shave a little off their ongoing utility bills. If you pay for utilities in any of your properties, here’s a simple way to start saving soon and keep saving forever. It also works in your home.
If you reduce the temperature in your property by only one degree during the cold months when the furnace is running and increase it only one degree during the hot months when the air conditioner is running, you will save between 3 and 5% of the monthly cost of heating and cooling. That’s really quite amazing when you stop to think about it. Chances are that you and your tenants or residents won’t notice the difference in the temperature, but you will notice the difference in your bank account. So why not go change your thermostat right now and start saving today.
Once you are saving this utility expense, make sure you do something smart with the money. Here’s another idea for reinvestment in the property that will even further reduce your utility bills. Use the savings from the one-degree differential explained above to buy a water tank to place between your water heater or boiler and your water supply in order to compound your savings long term. By installing this tank, you will provide for the cold water to enter your water heating system only after resting and warming up a bit in the holding tank. While the water is waiting for its turn in the boiler/water heater, it will warm up a significant amount all on its own. The water in the tank will get warmer by bleeding off much of the cold as it sits in an environment that is already heated by both your heating system and the additional heat produced by the water heater while it works to increase the temperature of the water already in it. This can be compared to sitting a glass of cold water on your kitchen counter and coming back later to a warm drink. Chances are that your furnace is in the same area as your boiler or water heater and likewise the heat it produces will help “prewarm” the water in the tank. Obviously, you won’t want an insulated holding tank.
By using this warmer water from the holding tank instead of straight from the much colder typical supply, your water heater will have to work much less to bring the water up to temperature for use in your sinks, showers, washer, etc. It is easy to see that if your water heater only had to increase the temperature of your water by 50 or 60 degrees instead of 80 or 90 degrees you would save big on utilities. Your water heater or boiler will also last longer, saving you even more over the long run.
As always, Middle Class Millionaires is happy to help in building your financial success with real estate.
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At a time when, in many cases, the past performance of a property will be superior to what can be expected in the near to mid range future, if you buy based on historical numbers, you will pay too much!
For those who think this is a bad time to buy real estate, before you lose any more opportunities, consider this. If you buy a home for $215,000 with 20% down, you’ll have a mortgage of $172,000. If you get a loan at 5.5%, amortized over 30 years, your monthly payment will be $976.60. If your concern is the monthly payment, remember that when things improve, and they will, interest rates will go higher. So, in a year, even if the price of the home dropped another 10% (unlikely) to $193,500 and things got a little better so mortgage rates inched up to only 6.5% and you used the same down payment of about $43,000, your mortgage would now be $150,500. Your monthly payment would now $951.26, a monthly savings of only $25.34. Over one year this would amount to a $304.08 savings. However, while the $304 savings sounds great, you need to factor in the fact that the interest paid over the first 12 months would be tax deductable, and if you’re in a 35% combined federal and state marginal tax bracket, you would have saved approximately $3,300 in taxes and paid down the mortgage by another $2,300, resulting in a real financial benefit to you of over $5,000.