A: With summer around the corner, renters across Australia are prioritising air conditioning.

Domain reports that air conditioning is now one of the five most searched rental features in almost every major city. For example, it’s number one in Sydney and Adelaide with renters, number two in Brisbane and Perth, and remains in the top five in Melbourne[i].

Demand in Adelaide has been especially marked, with searches for air-conditioning soaring by 751% in the past year.

Yet, despite this surge in interest, only 35% of rental listings include air conditioning, highlighting a gap between what tenants want and what landlords are providing. Yet this disconnect presents an opportunity for investors willing to act.

Air-conditioning isn't the only smart investment for landlords to consider. As costs rise with energy-guzzling appliances such as air conditioners working overtime, landlords can ease the financial pressure on tenants and add long-term value by embracing sustainable upgrades.

According to research from Cotality (formerly CoreLogic), properties with solar panels, for example, are valued at around 2.7% more than those without — an uplift of roughly $23,100 nationally. Regionally, the impact varies significantly, with the highest percentage uplift seen in Regional Northern Territory at 6.9%, or about $31,350. In dollar terms, the uplift for a capital city property with solar ranged from $14,093 in Adelaide to $30,459 in Hobart, reflecting buyer demand for energy-saving features.

Moreover, each additional NatHERS (Nationwide House Energy Rating Scheme) star rating[ii] can increase a property's value by 1.3%, or about $10,560[iii]. A NatHERS rating indicates the amount of energy required to maintain a comfortable environment. The rating ranges from 0 to 10, with a higher star rating indicating that the home requires less energy for heating and cooling, resulting in lower running costs.

Yet solar is no longer a niche addition to properties, either. About 29% of homes now have rooftop systems, with uptake topping 40% in Perth, Adelaide, and Brisbane. Bungarribee in Sydney's west even leads the nation, with 96% of homes sporting solar panels.

Beyond solar, minor updates can also boost tenant appeal. Energy-efficient light bulbs shouldn’t be underrated, while higher-rated hot water systems, quality window furnishings to keep out heat, and well-sealed doors to stop drafts are simple, cost-effective ways to improve comfort and liveability for your tenants.

These improvements can increase tenant attraction and retention and may expand the possible buyer pool when selling an investment property, potentially resulting in a faster sale. Some landlords question whether such upgrades add value, but research from Cotality indicates they do.

For advice on improving the appeal of your investment property with energy-efficient features and hacks, speak with your local Raine & Horne Property Manager for expert guidance.

[i] https://www.domain.com.au/news/renters-needs-are-basic-just-give-them-a-home-with-air-conditioning-1430585/

[ii] https://www.nathers.gov.au/

[iii] https://www.cotality.com/au/insights/articles/solar-panels-add-thousands-to-home-values#:~:text=Overview,benefits%20of%20energy%2Defficient%20homes.