Letters from 2025, Part II: Jyothi

April 15, 2021

Don’t call her a landlord.

Having studied medieval history in university, Joythi doesn’t like the feudal character of the word. To her, it evokes a loathsome and obsolete cultural hierarchy, a baron of old reigning over peasants. She prefers the more awkward term, “rental property owner”.

Jyothi grew up in the small town of Bath, New Brunswick. Her parents were less than elated when she announced that she planned to study the history and literature of the Dark Ages at the University of Guelph. At their insistence, she added a more practical and marketable minor in business to her academic plan. Her best friend Sarah, it turned out, had been accepted into the Ontario Veterinary College, and the two made plans to room together. After the women had spent their first year in South residence, their parents presented a plan to buy a house together and rent it out to Jyothi, Sarah, and whoever else they could find to occupy the two remaining rooms. Shortly after finishing their exams the duo and two housemates moved into the new digs, a 1970s-era single-family home in the Grange Hill area.

Despite feeling that the business minor had been thrust upon her, Jyothi did very well in microeconomics, finance, and accounting. Her parents took heart as she became increasingly inquisitive about the financial side of the property rental business. During her summers working with College Pro Painters, she took some online real estate courses. She was soon regaling Sarah with the four ways rental properties earn money: passive appreciation, active appreciation, rental net income, and equity accumulation. As convocation day approached, Jyothi landed a job with the Guelph and District Association of Realtors, while Sarah started work with a country veterinary clinic a modest drive to the east of Guelph.

The women worked out a three-year plan to pay off their student loans and then buy out their parents’ respective shares of the house. Sarah proved to be handy with wrench and screwdriver, and was able to deal with most maintenance jobs that came with home ownership. Jyothi was easily able to handle the business side, and together the women developed rules of thumb for selecting housemates (for example, a grad student was a good choice as tended to be very focused on academics). Jyothi also began articling as a real estate agent.

By the time the women each celebrated their 30th birthday, they owned four properties scattered across Guelph, as well as one in Waterloo. Jyothi was going over utility bills one day, and was dismayed at the impact on their business’ bottom-line - coincidentally, each lease had been structured with utilities included in rent - and contacted Alectra to see if there was a way to reduce this expense. They referred her to the eMerge Guelph Home Tune-Up program. Sarah soon finished implementing the various low-cost improvements that the eMerge advisor had recommended as a “101-level” effort. The duo then followed the advisor’s suggestion to look into the PACE program offered by Our Energy Guelph as a “201-level” continuation.

When Jyothi and Sarah first reviewed the energy audit reports for their properties, they were rather intimidated by the amount of investment that was being recommended. However, Jyothi went over the numbers carefully and concluded that the additional PACE financing cost would be about the same as the savings on electricity and natural gas. There would also be no impact on their credit rating. While they had no plans to sell any of the properties, it was comforting to know that a buyer could simply assume the PACE financing, just like they would assume the property taxes. Jyothi also noted that the dramatic reduction in utility consumption made the expense side of the business ledger much more predictable; there was less need to keep a reserve on hand in case of a spike in electricity or natural gas rates. Her inner accountant saw the wisdom of trading a volatile utility expense for a fixed interest and principal repayment.

20210416 Best tentant everAdding rooftop solar photovoltaic arrays to each property (or rather, the three properties that had suitable roofs) was particularly interesting for Jyothi. It was like the difference between renting and owning: utility bill payments just vanished into the void, but now the money that would have been spent on electricity is repaying the cost of the solar panels, building up yet more equity. To her this is like having an additional tenant - one that doesn't occupy any floor space. As an added bonus, the air gap under each array means less heat in the attic and hence less need to run the air conditioning. What’s more, covering up the most sun-drenched parts of the roof with solar panels means that the shingles pretty much stop aging, postponing the capital investment of re-roofing.

That Jyothi would be making electricity - and hence money - from sunlight seems predestined. She is fond of pointing out that her name means “light” in Sanskrit. 

Jyothi has learned that an energy efficiency project is most likely to happen right after a property is purchased. She is a passionate advocate for PACE, and never misses a chance to tell proud new homeowners about the program. She reckons that her zeal has helped a couple of dozen clients to get on board, making their new homes more comfortable, quiet, healthy, and cost-effective. She takes pride in providing her tenants with the same benefits, something that sets her apart from the feudal barons of yore.

This is the second in a series of stories of fictitious Guelphites living four years in the future, describing what the Property-Assessed Clean Energy (PACE) program meant to them. Any resemblance to persons living or dead is purely coincidental.