Mortgages & Creative Financing

The 4 Corners of Value in Green Real Estate

Expertise:
56 Articles Written

I’ve written here extensively about the increased profits you can enjoy by taking your real estate investments green. The six major areas of increased profit are:

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  1. Increased sale prices
  2. Increased rents (for buy and hold)
  3. Lower operational expenses
  4. Lower vacancies/churn
  5. Lower advertising/marketing expenses
  6. Rebates/Incentives offset portion of rehab expense

The are three additional areas of value that result from being a green real estate investor.  Although it may be tough to quantify their value they can dramatically affect your business in a positive way.  They are:

  1. Brand
  2. Competitive Advantage
  3. Opportunity

BRAND
Brand is simply the identity of a product, service or business.  As investors, you have a ‘brand’ whether you realize it or not.  For RE investors who are constantly trying to get their offers accepted, negotiating with lenders, dealing with planning depts, marketing to buyers/renters, etc. the concept of brand is often an under-utilized tool.

COMPETITIVE ADVANTAGE

Quick, think of the top three athletic shoe companies in the world.  You may have come up with Nike, Reebok, Addidas.  Now, think of the top three green real estate companies in your city. Did you come up with any?  I’m guessing that you didn’t and therein lies your potential competitive advantage.

Green real estate investors offer properties that are highly desired yet have little competition. This competitive advantage leads to increased sales, higher sales prices and coincidentally works to improve your brand (above). Every client I have worked with in the last 3 years has experienced this phenomena.  They’ve gone from a crowded pool with tons of competition to being ‘the’ green investors in their market with no competition.

OPPORTUNITY
Green RE investors also enjoy more opportunity.  They get agents, other investors, lenders, etc. that all want to work with them because they are the ‘green’ team.  I have seen this time and again- opportunities come up that would have never come up otherwise.

I am a perfect example of this.  Last year someone found me on Facebook, saw that I was a green real estate investor consultant and asked me to give a speech in front of her entrepreneur group.  That speech opportunity has led to more than $68,000 in business over the last 10 months.  This is all business that I would not have gotten had it not been for that first initial speech.

So while profit is what keeps the lights on, these other three areas of value can go a long way to further your business and better your life.  They may be difficult to quantify but they still can offer you tremendous value.

    Christopher Somers
    Replied about 9 years ago
    So true ! Those investors that are ahead of the curve on the green theme will have more opportunies in the future as well as potentially better profit margins.
    Jim Simcoe
    Replied about 9 years ago
    Thanks, Christopher, I appreciate your comment..Jim
    Paul
    Replied about 9 years ago
    Ok, I am new to this topic – what is “green” real estate investing? Is it “green” as in the context of being environmentally friendly or is there another meaning for the word “green” in this context? (profitable?) -Paul
    Jim Simcoe
    Replied about 9 years ago
    Paul, We mean as both more profitable AND environmentally-friendly. Thanks..Jim