Electric cars are all the rage. Whether it was spurred by a Super Bowl ad or that neighbor who’s an early adopter of new technologies, you’ve likely had a few conversations about Electric vehicles in the last two years. Every car manufacturer is doubling down on making more and more of these quiet cars, and they’ve already taken over the car markets of some European countries, like Norway, where over 91% of new car registrations are electric.
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The benefits of an EV are pretty clear, whether it’s the significantly lower greenhouse emissions, 40% fewer moving parts, or the fact that you’ll never have to visit a dirty gas station or get an oil change ever again. EVs are expected to hit 18% of new car sales in the U.S. this year, which means it’s increasingly likely that one of your tenants will be driving around a shiny new Tesla or Chevy Bolt. They’ll likely want to charge that new electric car at your rental property.
It’s still early days for EVs, but many of these cars remain expensive to buy for now, despite federal and state incentives. The average cost is currently around $60k, which means that EV owners, on average, have higher income and would likely make for a very reliable tenant for your property.
We’ll outline the important EV points that you should include in your lease agreement, to make sure that your tenant can happily charge while keeping your property (and your utility bills) safe from harm.
Charging EVs at Home
First off, Charging an electric car can be expensive. Like your cell phone, an EV has a battery that needs to be charged, it’s just a way bigger battery than the one in your pocket. How big? Well, the average phone has a 4500mAh battery, while the average EV today has a 40kW battery. That means the average EV’s battery is 32,000 times larger than the average phone battery.
It’s definitely possible to charge an EV at a public DC charger (more on that below). You’ve likely seen charging stations in the wild, shoved into the corner of a Target parking lot or proudly wearing a red Tesla logo. These Chargers are (mostly) paid, but they can also fully charge a car in a matter of 40 minutes or less. Charging at home takes way longer, but you also get the convenience of always leaving home with a full battery.
Electric Vehicles and the Utility Bill
Charging at home can add roughly $60 to the monthly electric bill, depending on many factors such as miles driven, the price of electricity, and the speed of the charger. This charging cost is likely less than the monthly cost of gas, but as the landlord you need to determine who’s paying it.
If you cover the electric bill on your rental, then you’ll want to include guidelines in your lease around when is an acceptable time to charge, if you allow it at all. Many utility companies have time-of-use pricing, where the cost of electricity goes up when it’s most in demand. If you have time-of-use pricing, then it makes sense to only charge big batteries like EVs overnight, when electricity is its cheapest. Many chargers, and almost all EVs, allow for scheduled charging.
If you don’t cover the electric bill, there’s less reason for you to dictate when charging is acceptable. It’s also worth looking into what your local utility company recommends, as many of them have guidelines around EV charging, particularly during hot weather when blackouts are likeliest.
Types of EV Chargers
In order to charge an EV at your property, you’ll need to have the proper equipment. It would be a nice bonus for EV drivers if you supplied a charger yourself, but tenants won’t expect that and most would be plenty happy with an available 240v plug in or near the garage. Installing that plug is fairly easy if you’re a capable electrician, or you could hire a professional. Many utility companies offer incentives for installing EV charging infrastructure, so it’s worth checking into what’s available in your area.
Not all EV chargers are created equal, and the difference in charging times can be dramatic. Below are the three main types of chargers that you’ll encounter:
Level 1 Chargers
Most EVs come with a level 1 wall plug which uses a standard 120v outlet to juice up their battery, but it charges extremely slowly. These chargers typically add about 5 miles per hour, which means that an EV capable of 300 miles would take around 60 hours to fully charge.
Level 2 Chargers
These are the chargers that your tenants are most likely to purchase and use, since they combine practicality with ease of use. These chargers are purchased separately and tend to run around $400-600. They use a 240v plug (like your dryer), and they’re capable of adding 25 miles per hour. At that speed, a 300-mile EV would fully charge in about 12 hours – perfect for overnight charging.
DC Chargers
Without getting too technical, Level 1 and Level 2 chargers use AC, or alternating current, while DC chargers use direct current. This difference in current allows DC chargers to deliver electricity much faster than their AC counterparts. Many DC chargers deliver at 150kW or even up to 350kW, while most EVs can currently only accept a max of 125kW or less. Charging at these maximum speeds allows an EV to fully charge in 40 minutes or less.
DC chargers are expensive to install and maintain, and your tenants will likely not request that you supply one. That said, check out this map for where your local public chargers are. Knowing where to point your tenant for a fast charge is a great way to sidestep the issue of slow charging at home.
Colorado recently passed HB1233, which requires all new multifamily housing to allow electric charging.
Did You Know?
Specifically, the law states, “a tenant may install, at the tenant's expense for the tenant's own use, a level 1 or level 2 electric vehicle charging system on or in: (I) The leased premises; and (II) AN ASSIGNED OR DEEDED PARKING SPACE THAT IS PART OF OR ASSIGNED TO THE LEASED PREMISES ; OR (III) A PARKING SPACE THAT IS ACCESSIBLE TO BOTH THE TENANT AND OTHER TENANTS.” Learn more about the latest rental industry legislative updates in our webinar.
Electric Vehicle Safety and Your Rentals
You’ve probably seen sensationalist news articles about EV fires. Yes, there have been a few unfortunate cases of batteries overloading and starting a fire, and it’s true that the chemistry of an EV battery can make for a particularly nasty fire. However, gas cars are far more dangerous. According to Drive Electric Colorado, “…there are approximately five EV fires for every billion miles traveled, compared to 55 fires per billion miles traveled in gasoline cars.”
That being said, there are some safety tips that you’d be wise to include in your lease for EV-driving tenants.
Require UL-Certified Chargers
Remember that smartphones used to catch fire when paired with a lousy charger. Go on Amazon and search for an EV charger and you’ll get bombarded by thousands of options from dozens of brands. There are all kinds of stats that can affect charging speed (amps being perhaps the most important), but from a safety perspective, you want to make sure your tenant is using a UL-certified charger. In short, a UL certification means that product meets certain safety requirements as tested by Underwriter Laboratories, a third-party certification company.
Outline Charger Maintenance in Your Lease
Just like you’d think twice about plugging a frayed charging cable into your phone, your tenant should pay attention to the maintenance of their EV charger. In your lease, you should outline expectations around EV charger maintenance, such as:
- Replacing any charging cables that are frayed or visibly damaged, so that interior wires are never visible and all plugs are fully functional
- Where a tenant is not allowed to mount a charger, such as near the ground or obstructing access to other parking places or outdoor areas
- Wrapping up charging cables when they aren’t in use. Many EV chargers have 24’ cables, and they can quickly become a tripping hazard if left untidy
Install a Heat Detector
Once again, EVs are actually less likely to start a fire than their gas counterparts. That being said, no one was ever mad about adding another safety sensor to their property. Heat detectors are similar to smoke alarms, but they only sound their 85-decibel alarm if they sense an excessive rise in heat. This is perfect for alerting neighbors and tenants of the unlikely event of an EV fire (or any other fire, for that matter).
List Charging as an Amenity
As more EVs take over the roads and dealerships, chargers will soon be everywhere by necessity. For now, though, having your rental property amenable to EV charging – even if that just means that you have an available 240v plug near parking spots – is noteworthy. You’d be wise to add that amenity to your listing description to let EV owners know that they could always have a full charge if they called your property home.
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