Make deals pencil by making SFRs sustainable – $200 in additional NOI / month

[Brett Jurgens]

SFR investing has been hard for a while. Pencils have been down and large investors have been focused on cutting costs, increasing renewal rates and improving operations. But there's only so much juice you can squeeze out of a portfolio.

Interest rates are coming down and activity will increase in 2025, though the housing shortage is keeping prices elevated.

So what can investors do?

What if you could add $200 / month in NOI (a 30-100 bps boost in cap rate depending on the asset value) without raising base rent?

Let’s do some simple math…

If you buy a $300k house, charge $1,900 in rent, and have a 35% expense ratio, you’re at a 4.94% cap. Fine, but not above most LP hurdles.

Let's add solar and other sustainability upgrades. Add $12k to your cost, generate an additional $200 / month in NOI, and now you're at a 5.52% cap. A 58 bps boost.

[Don Konipol]

Quote from @Brett Jurgens:

@Don Konipol not out of the air, based on my own rental and a few hundred others we've done at Net Energy in 8 states.

Brett, if you’re representing a business we need to know that upfront so we can understand that your post is actually an advertisement for your business and not an unbiased opinion that we can rely on.