A gardener plants a seed that eventually grows into a tree, beautifying thesurrounding area.
In much the same way, an eco-conscious real estate investor can purchase a green property. That green property will grow into a source of income that yields high returns while saving a substantial amount of money in maintenance — all of this sustainable with a low impact on the environment.
Green properties are the way of the future, with more and more people seeking to reduce their carbon footprint. Trend-savvy real estate investors see the value in this niche as the world begins its transition from the harmful, emission-heavy practices of the past toward cleaner alternatives.
In this article, we’ll detail what every real estate investor should know about these alternatives. We’ll take an in-depth look at the long-term benefits of an investment in green properties — how a seed planted now can bear fruit later.
The Basics of Green Building
The concept of green building is simple enough to understand. It involves the process of constructing a building, from the initial blueprint to its regular maintenance, using eco-friendly methods that conserve resources. Development of these properties involves a focus on efficiency and material management.
A green property qualifies for its title when it meets different criteria for globally recognized Energy Star® and LEED certification. The building must reach certain energy performance standards set by the Environmental Protection Agency, showing it performs better than similar buildings in the nation.
Ultimately, Energy Star® and LEED certification can serve as an attractive selling point. Eco-friendly consumers might seek out real estate investors with these certifications, trusting them to act as an authority in sustainability. But the advantages of owning a green property don’t end there.
The money real estate investors retain in green properties amounts to a considerable sum. On a basic level, eco-friendly infrastructure saves an average of 20% on annual maintenance costs. For medium- to large-scale buildings, that percentage can represent an enormous number.
A lower cost of maintenance gradually accumulates extra money, and these small cuts add up over time. A real estate investor can circulate this money through their other properties to supplement expenses elsewhere, drawing on the savings they earn from green buildings to support larger endeavors.
Real estate investors who manage their energy consumption particularly well have the option to return unused energy back to power suppliers for financial gain. All it takes is the installation of solar panel technology on the roofs of their green properties — that and a week of sunny weather.
Of course, energy savings in a green property don’t just benefit the investor. Offering more energy-efficient properties is both a financial and ethical plus for many younger tenants. A better-insulated green property can save residents from losing 5% to 30% of their total energy usage, for example, freeing up cash that normally goes to their costly utility bills. The cost benefits will travel down and help investors gain an edge with tenants in a competitive rental market.
Environmental Benefits of Green Properties
An investment in a green property has implications that extend far into the future. Our planet is currently struggling with the reality of climate change. With a higher frequency and intensity of natural disasters, unseasonable temperatures and fluctuating weather, those who aren’t pushing for environmental awareness are on the wrong side of history.
The construction of green infrastructure relieves a heavy burden on the planet. Through the use of renewable resources and conservation techniques, real estate investors can greatly reduce the carbon footprint of their property. Whether their design includes an alternative heating source or tighter insulation, eco-friendly building practices decrease CO2 emissions.
According to a report from the U.S. Green Building Council, structures in the commercial and residential sector account for 39% of all CO2 emissions in the country. This percentage is higher than that of the industry and transportation sectors. Investment in green infrastructure will help alleviate gases properties with poor energy ratings produce.
Increased Resale Value
Real estate investors can expect to see a high return on investment when they choose to purchase green properties. The distinction of an eco-friendly, “green” property acts as a pull for many people, and it’s far easier to find interested customers when a building has received Energy Star® and LEED certification.
According to another report from the U.S. Green Building Council, houses built with green technology had an average 9% price premium. Statistics show consumers want to reduce their environmental impact — a profitable insight.
This is especially true of younger homebuyers. As millennials continue to enter the housing market, climbing the corporate ladder and earning an income that allows for regular mortgage payments, real estate investors should cater to this demographic. These young men and women are far more conscious of the environment than their predecessors, and an eco-friendly house has appeal.
Making the Change
Real estate investors stand to gain from the growing popularity of green properties. And there’s no time to lose. As the adage goes, “The best time to plant a tree is 20 years ago. The second-best time is today.”
For those hesitant investors, it’s time to start planting.
This article has been contributed by Holly Welles from The Estate Update.