Why Smart Investors are Going Green
I am a tree-hugging capitalist.
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If you’re a real estate investor, you should be as well. Going green is the single greatest advantage for any real estate investor in any real estate market.
Four main reasons:
Bigger Pockets- Put simply, green properties sell (or rent) faster and for more money. Green properties cost less to operate (usually 30-60% less) and are more valuable. In fact, they appraise average of 10-15% higher than a comparable home according to a study done by SmartMoney in 2008.
Higher Demand- The demand for green properties (SFR, rentals, commercial, multi-family, etc) continues to skyrocket. As consumers become more educated about green living they are more frequently demanding green elements. ‘Green’ used to be only for the tree-huggers. Now it’s for anyone who wants lower utility bills and a healthier, more comfortable place to live or work. The fact that ‘green’ is en vogue right now is a bonus.
Limited Supply- Green homes continue to account for a very small piece of the residential marketplace. Even with builders and rehabbers hopping on the green bandwagon, supply is far less than current demand. It will be several years before this ratio starts to even out.
Free Cash!- Right now there are literally billions of dollars available to real estate investors to either build or rehab green. Money is available through a variety of rebates, incentives, tax credits, etc for all levels of green property upgrades. From $2 lightbulb rebates to $250,000 subsidies for green building, the incentives are there. A great place to find them is the Database of State Incentives for Renewables and Efficiency.
In this current economic climate it pays to be a tree-hugging-capitalist-real-estate-investor. You make more money, get your expenses subsidized, create healthier, high performance properties, have little competition, tons of demand and protect the planet in the process. Going green is a no-brainer because right now it’s an opportunity and an advantage. Soon it will be regulated and required everywhere. The question isn’t whether to pursue green; it’s when.
And the answer to that for savvy real estate investors is right now.