What are we talking about when we talk about sustainability?
In general terms, we mean environmental sustainability and natural resources. There’s a trend towards creating greener living spaces that are less taxing on the water, the electric grid, and the oil and gas that’s needed to keep a residential rental home running.
In industry-specific terms, we’re talking about sustainability as how we’ve managed to shift business models to meet the market’s and its tenants’ demands. As a property owner, you may not have energy efficiency and water protection high on your list of priorities. Your tenants in Tennessee do, however, and that means you need to at least think about how to make your property more appealing to those customers.
We’re talking about sustainable rental trends and how they are shaping the future of property management in Nashville, Tennessee, and in rental markets across the country.
Why Sustainability Matters in Nashville Rental Housing
As you may have noticed, tenants today are more informed and environmentally conscious than ever. They have access to information on demand. They have strong opinions about the world and their place in it.
Studies show that renters are increasingly prioritizing properties with sustainable features. Mortgage and Property Investment Magazine published data in late 2024 that said 80% of tenants were interested in rental homes that had better energy efficiency. Part of this is generational. Younger tenants are renting their first homes, and they’re not interested in waste. Part of it is economical. Everyone wants lower electric bills. Additionally, sustainable rental housing enhances tenant retention by providing homes aligned with their values.
Beyond the environmental benefits, integrating sustainability into rental housing offers financial advantages, including lower operating costs and incentives like tax credits for green improvements. There are benefits to owners that go beyond helping to protect the planet.
For real estate investors, aligning with sustainability trends is an opportunity to future-proof your portfolio while contributing to a greener future. This is not a trend that is likely to go backward. As technology evolves to support more sustainable lifestyles, tenants are going to lean into the trend and drive up demand.
Emerging Sustainability Trends in Property Management
Where is a smart real estate investor or landlord most likely to invest their time and resources?
Based on what we’ve observed as Nashville property managers, we have some recommended starting points. Here’s what tenants are looking for and where you can find the most cost-effective improvements that lean towards sustainability.
- Energy Efficiency Upgrades
Energy-efficient upgrades remain one of the top sustainability trends in rental housing. Simple changes like installing LED lighting can save owners and tenants a little money monthly and yearly. There’s also the matter of longevity. When you remove those fluorescent bulbs and upgrade to LEDs, you’ll find you don’t have to change those light bulbs very often. Or at all.
Think about appliances as well. When it’s time to replace a dishwasher or a refrigerator, think strategically and sustainably. Energy Star-rated appliances and smart thermostats can significantly cut energy costs while reducing carbon emissions. These improvements increase property appeal for property investors, especially for tenants looking to save on utilities.
There’s good news here for property investors. The state of Tennessee has a Home Energy Rebate Program that provides rebates from $2,000 to $8,000 for energy-efficient retrofits in buildings and properties. Let’s see if you qualify.
- Renewable Energy Solutions
It may seem like a bit of a stretch, but smart investors will begin thinking about solar panels and other renewable energy options. These are becoming a popular addition to rental properties. While the upfront costs can seem steep, the long-term savings in energy bills and potential tax incentives make it a worthy investment. Properties equipped with renewable energy solutions can attract eco-conscious tenants who are willing to pay a premium for sustainable rental housing. You’ll also be able to take advantage of government incentives and position yourself as a leading change agent in the local real estate market.
- Water Conservation and Management
Water conservation is another essential trend for landlords looking to make properties sustainable. Installing water-efficient fixtures, such as low-flow showerheads and dual-flush toilets, reduces water waste without causing any inconvenience to your tenants. Rainwater collection systems and drought-resistant landscaping are additional steps landlords can take.
Effective water management not only ensures compliance with environmental regulations but also creates a more efficient, eco-friendly property that tenants will appreciate.
- Smart Home Technology
Tenants are drawn to smart home technology for convenience, but its role in sustainability makes it a must-have for landlords too. Smart devices like motion-activated lighting, leak detectors, and automated window shades optimize energy use and minimize waste. If you own a residential building with multiple units, the Internet of Things (IoT) can be instrumental in helping you study data insights and analytics that will show you where you might be losing money, wasting resources, or setting yourself up for higher costs. This type of tech can help owners save money and it also protects investments.
Smart home tech can also provide an added layer of convenience that enhances tenant experience, making your property stand out in competitive markets.
- Sustainable Building Materials
When making property improvements or undertaking renovations, consider using sustainable materials such as reclaimed wood, bamboo flooring, or recycled metal. These materials not only lower your environmental footprint but also add modern, durable design elements that tenants are quick to notice and appreciate. You’ll be more competitive on the market, and you’ll likely rent for more money.
For landlords developing new rental properties, incorporating green building certifications like LEED (Leadership in Energy and Environmental Design) can position your property as a high-value, sustainable rental housing option. Incorporate these principles into your investment goals going forward if you want to appeal to more tenants and maximize your earnings.
- Community-Oriented Sustainability Initiatives
There’s a growing need for community among an increasingly lonely population. Sustainability extends beyond physical property improvements. Many property managers and building owners are creating community initiatives like recycling programs, bike-sharing stations, or education on green living practices. Building a sense of community around sustainability can increase tenant satisfaction and retention.
We have watched with interest as rental properties in Nashville implement community gardens, on-site composting programs, and other initiatives that give tenants a shared sense of purpose, all while providing value. Tenants appreciate this kind of innovative approach and the sense of contributing to a shared environmental goal. The fact that they can’t find it everywhere tells us that those properties providing such an experience will really stand out in a crowded and competitive rental market.
The Business Case for Sustainable Rental Housing
Still on the fence about investing in sustainable features? We get it. Plenty of people still see this as a trend that’s soon to pass or completely unnecessary. But we can also provide you with some compelling reasons why you should take action soon:
- Attract Premium Tenants. Eco-friendly properties appeal to tenants willing to pay extra for sustainable living. Owners provide sustainable properties for the same reason they offer pet-friendly rentals; it’s what a majority of the tenant pool wants.
- Boost Property Value. It’s not just about higher rental values. Green upgrades and certifications can significantly increase resale value.
- Stay Ahead of Regulations. Many areas in Tennessee and around the country are adopting stricter energy efficiency and sustainability requirements. Making upgrades now ensures compliance with minimal disruption later. You won’t find yourself rushing to comply when the laws are passed.
- Lower Operating Costs. Features like energy-efficient systems and water-conserving fixtures reduce utility bills over the long term. This is attractive to tenants, but it works for owners, too. Think about the accounts you have to take over during turnovers and renovations. Why not reduce the monthly bills a bit?
Sustainability in Nashville property management and rental housing is not a fleeting trend, we believe. Our experience and our understanding of tenant and market behavior are telling us that this is the future of renting. Real estate investors and landlords have a unique opportunity to align with tenant demand, cut costs, and increase property value by adopting these sustainable practices.
Don’t get left behind.
And don’t think you have to do everything all at once. Start small by focusing on energy and water efficiency, then explore bigger changes like renewable energy or sustainable materials during renovations. The path to sustainable rental housing is a win-win for your portfolio and the planet.
Take a look around at what your competitors are doing. Either they’re completely unaware of the importance tenants place on greener living spaces, or they’re already making the necessary changes we’ve discussed here. Do you want to be a leader or a follower?
We know what we’re choosing.
Wondering how you can get ahead of the sustainability trends with your Nashville rental property? Talk to us. We’ll take a look at where you are and make some personalized recommendations that will lead to a more efficient, sustainable rental property. Contact us at Apex Ventures, Inc.
