Insulation – What you need to know

A topical point at the moment is the word insulation. If you haven’t been keeping an eye out on the news, you may have missed the latest government change to the Residential Tenancies Act – namely the requirement to insulate your rental properties by mid-2019 and install long-life smoke alarms by 2016.

For more information, you can visit the website of the Ministry of Business, Innovation & Employment.

Why insulation?

It’s estimated that as many as 600,000 New Zealand homes have insufficient ceiling or underfloor insulation[1] – in terms of rental properties, this equates to approximately 280,000 properties on the market.[2]

Though it may just seem like an additional compliance cost the benefits of insulation aren’t just associated with the tenant. Insulation advantages include:

• Warmer homes in the winter, cooler homes in the summer (tenant)
• Easier and cheaper to heat insulated homes (tenant)
• Increased comfort levels (tenant)
• Healthier homes to live in (tenant)
• Increased marketability for when you property goes to the rental market (landlord)
• Option to seek a premium for rent (landlord). This is especially relevant now; the ability to charge a premium based off the advantages of insulation will decrease over time as landlord’s meet the new standards.
• Feeds into the health and wellbeing of happy tenants which in the long run may mean long term tenants (landlord)

Are we just talking ceiling and underfloor insulation?

In regards to the legislative changes and the implementation date of 1 July 2019, reference has only been made to ceiling and underfloor insulation.

There are two other insulation types that are worth considering while undertaking the insulation upgrade. These are walls and windows.

As a property owner, the ability to install wall insulation is limited – you’re not about to rip the cladding or wall lining off for no reason. But if you are in the process of renovating, it is advocated looking at placing insulation within the walls to increase heating efficiency, tenant health and prevent dampness in your investment.

Windows are also problematic when it comes to losing heat. In terms of insulating your windows, EECA Energywise offer the following alternatives:

• “Double glazing is the best option and works all the time, but it is expensive to retrofit to a house.
• Retrofit alternatives to double glazing (including DIY window insulation film) are cheaper than double glazing. While they are usually easy to install and are still quite effective, they may not be as effective as some forms of double glazing.
• Curtains or blinds can add insulation to your existing windows. Well installed good quality curtains can be very effective.”[3]

What’s the cost?

The cost of insulating the property varies and depends on a number of factors:

• Current state of the insulation
• Size and age of the property
• Ability to access insulation spaces – the government has noted that approximately 100,000 of the identified 280,000 rental properties around the country will be exempt from some insulation due to the house being too close to the ground or have insufficient space in the ceiling to effectively insulate .[4]

It is important to note that there are some organisations that are actively involved in the promotion of insulation and its benefits and there is opportunity to receive funding to help with the insulation process. Warm Up New Zealand: Healthy Homes offers subsidies (from 25%-100%) if you meet the necessary criteria (or your tenants do). For more information you can contact EECA energywise or lucky for us Cantaberians, Community Energy Action (CEA) who are a Canterbury-based Charitable Trust.

Take the opportunity to receive a no-obligation insulation check – at least you’ll get peace of mind, and a clear understanding of what you need to do to get your property up to insulation code.

Summary

While these changes do have an extended lead in time, there is value in getting insulation corrected as soon as possible in terms of making your investment property a more valuable one in the eyes of a tenant or potential tenant. And with the ability to tap into certain resources, the cost of integrating insulation into your investment may not be as excessive as you think.

What are your thoughts of government led changes? Let us know in a comment below.

Resources

[1] EECA estimate based on figures from BRANZ report E466, and the number of homes insulated under EECA-administered retrofit programmes.

[2] http://www.stuff.co.nz/business/70096597/Landlords-required-to-insulate-and-install-smoke-alarms-to-rental-properties

[3] http://www.energywise.govt.nz/your-home/insulation/window-insulation

[4] http://www.stuff.co.nz/business/70096597/Landlords-required-to-insulate-and-install-smoke-alarms-to-rental-properties

Images

Adapted from Project, by moppet65535, CC By SA 2.0