How to Green Your Green

Making your property “green” can help you make more money when you rent and when you sell. This is something of a touchy subject. When I first joined Bigger Pockets, I indicated that I would like to bring sustainable principles to my rental properties. I don’t remember the exact numbers, but a tiny majority saw it as a good idea. When I pitched it to Brandon, he thought it was a great idea. So, in honor of Earth Day, I am going to start my on-going blog, hoping you will see it as a great idea, too.

My name is Michael Purcell and I am an award winning architect and a LEED certified professional. LEED stands for Leadership in Energy and Environmental Design. I practiced architecture for twenty years in my own firm, as well as several other firms. Having my own practice was something I loved. In 2002, the writing was on the wall (the early warning signs of 2007-2008 were at hand) and I went to work for American University as an Assistant University Architect. It changed my life.

In 2007, I became a LEED certified architect, the first LEED professional at American University. At the time, I was the AU project manager for the SIS Building, a new structure for the School of International Service and being a sustainable, green building wasn’t just something desirable, it was a requirement.

There are four levels of LEED certification – certified, silver, gold and platinum. The SIS Building was awarded LEED Gold (we were 7 points shy of platinum), the first LEED Gold certified building on campus. LEED certification is a rigorous process. At the time we did this project, we were required to address approximately 60 levels of planning, design, construction, material selection and construction administration. The building was finished in 2010.

The SIS Building uses half the energy of an equivalent sized building on campus [SIS is 192,000 gross square feet- 73,000 useable - i.e. occupied)]. It recycles waste water, partially blocks the sun in summer and uses the sun in winter to offset heating costs, collects solar power on the roof and uses energy efficient lighting. The building is an example of energy and environmental leadership and the Journal of Green Building asked me to write an article about this project that was published at the end of 2012. The same year, it was named one of the five greenest buildings in Washington, DC.

Buildings use a large portion of all energy used in this country and the reason is because buildings generally are leaky, energy in-efficient hogs that are over lighted, consume too much electrical power and poorly constructed. Back when materials were cheap, demand was high and energy was abundant; before OPEC, lumber and steel shortages, wee didn’t care about leaky windows and energy inefficiency. That’s what many buildings used to be like, but the United States Green Building Council (USGBC) changed all that when we discovered that we weren’t very smart about what we put on or in our buildings.

So, whether or not you agree with the idea of making your rental, your flip, your buy and hold better by greening the property, I think you will agree I know something about it.

Although the USGBC, Grrengard, and the sustainability movement have been exceptional achievements, the overall scenario is worse than ever. I’m quite sure you’ve heard of “Climate Change”. Climate change isn’t just affecting our weather, it is affecting our farms, our growing seasons, our health (Asthma, COPD, allergies), and I think it is also affecting our economy, crime and civility. There is no hard evidence for the last part of my statement and most people don’t even realize how much it is changing our way of life.

So, if you’re still with me, I’m sure you are saying, “So, what’s this got to do with my first real estate deal or my fifth real estate deal or . . .” A lot. If we can do this successfully on large buildings, why not smaller, existing buildings.

A very talented architect friend of mine says, “The best sustainable building is the one that’s already built.” Get my drift. By buying an existing building you’re already ahead of the game.

There’s a commercial on television where a young college graduate is talking to his successful father over lunch. The father wants to introduce his son to his stock broker. The son asks “How much does he charge?” The father says he doesn’t know. Son, “Well, can you get your money back if you’re not happy with his performance?” The father chuckles and says, “The world doesn’t work that way.”

The son says, “Well, the world is changing.”

And indeed it is. I think he’s a millennial! 

If you’re young, you know this because you’re changing it. If you’re older, you may be resisting change even though you can’t stop it. Change is inevitable. One of those changes is that this red hot real estate market will not last forever. It will come back again, as real estate is cyclical, but when it is down, you will need every advantage you can get to keep or rent your property. Good luck selling it!

Chances are in that cycle, you will rent your place to a young person, sell your flip to a Millennial investor or go into partnership with one. There is an estimated 100 million Millennials around the world and they think, act, dress, consume and socialize differently than people older than them. They shun many of the things their parents and grandparents hold dear, like new cars, traditional jobs and owning a lot of things. Real Estate used to be one of those things, but that is changing.

But, Millennials are interested in sustainability, being green, planet earth. Being green means looking at the best way to make the least impact on the planet and that makes things sustainable – something done in a certain way so as to have a positive outcome for future generations – look it up!

Now, do you think that if perhaps you made your rental, your flip, your buy and hold just somewhat green, maybe an energy efficient appliance or two, low VOC paint and recycled flooring, you might be able to get more rent because you can lower the utility bills (for your tenant), make a healthier living environment and get more money when you sell?

Think you might benefit from word of mouth when your renter is bragging to his/her friends about how much they’re saving on their utilities. Getting renters will not only be easier, but they might just clamor to get into one of your units. Knocking down doors rather than counting them.

So, now you’re saying it cost too much? It takes too long?

Well, both of those questions are mostly not true. Higher costs used to be the case, but every major manufacturer of paint, flooring, appliances, insulation, roofing and doors and windows has stepped up to the plate. Energy Star appliances in some cases are more expensive, but are offset by the long term (value added) savings in utility costs.

Does it take longer? No again. You can paint a wall with low VOC paint just as well as other paint. VOC, by the way, stands for Volatile Organic Compounds. Things in paint and other materials that keeps on giving in a way that is not good for your health.

Does it make a difference? Yes and if you check with your local utility company, appliance store, paint and carpet store and local government office you may just find more support than you can imagine. One thing that could cause heartburn is finding a local contractor who understands being green. Depending on where you live, you may have to specify what to buy and install. Plenty of info on the internet and you can some guidance here.

So, enough for today. This stuff is exciting and fun and if you happen to be a millennial, I would love to hear from you. I want to hear from you and the frequency of this blog will depend a lot what I do hear. I have silent partners who can answer your questions if I can’t. We can help every step of the way!

LET ME KNOW ABOUT YOUR PROPERTY, YOUR EXPERIENCE AS AN INVESTOR AND ANY QUESTIONS YOU MIGHT HAVE.

HAPPY EARTH DAY!