All-electric renovation is used not only for owner-occupied homes, but also to enhance the added value of rental investment properties. At the same time, there are points to consider, including upfront costs and power outage risk. This article explains the benefits and cautions of all-electric renovation, along with the key points for deciding whether to introduce it into an investment property.
What is all-electric?
All-electric refers to a system in which all energy used in a home is supplied by electricity. Instead of the conventional combination of electricity, gas, and oil, the home is fully unified under electric power. Typical equipment includes IH cooktops, EcoCute water heaters (electric hot-water systems), and floor heating.
What are the benefits of all-electric renovation?
Utility cost management becomes simpler
By consolidating expenses into a single electricity bill, basic charges can be reduced and household budgeting becomes easier. For tenants as well, monthly expenses become easier to track, which can serve as a selling point for rental properties.
Reduced fire risk
IH cooktops, which do not use an open flame, significantly reduce fire risk. This is especially effective as a point of differentiation for rental properties targeting families with children and elderly households.
What should you be careful about with all-electric?
It is vulnerable during power outages
In the event of a large-scale outage, all household appliances become unusable. In homes that also use gas, gas appliances can still be used during a blackout, but that is not possible with all-electric systems. It is important to advise tenants to keep backup equipment such as kerosene heaters and portable gas stoves.
Upfront costs are high
Initial investment can be substantial because it includes the cost of removing gas equipment, purchasing all-electric equipment, and installation work. However, there are also cases where long-term cost recovery is possible through lower monthly running costs, so advance simulation is necessary.
Is introducing all-electric into rental investment properties worthwhile?
All-electric properties can appeal to tenants through a greater sense of safety and convenience, while also requiring careful calculation of the payback period for the initial investment. If equipment investment is positioned as a differentiation strategy in rental management, a comprehensive cost-benefit assessment is essential, including whether the investment can be reflected in rent levels and how much it may improve occupancy.
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Frequently Asked Questions (FAQ)
Q. What is the typical cost range for renovating to all-electric?
Installing EcoCute, IH cooktops, and electric floor heating typically costs about JPY 600,000 to JPY 1.5 million including construction work. The cost of removing existing gas equipment is additional.
Q. Does all-electric affect rent setting for rental properties?
Depending on the quality of the equipment package, it may be possible to set rent about JPY 3,000 to JPY 5,000 higher. However, this depends on the location and the competitive environment.
Q. Does all-electric really reduce electricity and utility costs?
In some cases, using an off-peak electricity plan can make costs lower than in homes that also use gas. However, results vary depending on the utility provider, rate plan, and usage pattern, so it is important to review a simulation before installation.
Q. What should owners be careful about when introducing all-electric in rental properties?
EcoCute requires outdoor space, so securing an installation location is a prerequisite. In some cases, additional electrical capacity work may also be required. Potential changes in management and repair costs should be included in the plan as well.
