Is it worth making Eco-friendly flips?

12 Replies

With the world moving towards becoming more energy conscious and renovating homes for the future of our cities, does it make sense financially and logistically (time scales) to build more innovative homes with a focus on energy independence and less waste? 

I sometimes feel guilty throwing away bag after bag and dumpster after dumpster of rubbish. But that is inevitable when renovating. 

Would it be worth adding solar panels and wind turbines to my flips? 

Any other suggestions ?

It might have appeal to some buyers and might not cost much depending on who you go through.  I doubt it would add much value to the appraisal though and would be one more thing for the buyer to maintain.

@Nick Loref  

Check with companies like Sungevity.  They can add solar panels for a much smaller price than a full install would cost.  There are trade offs, but it could be a way to get solar on a flip for quite a bit less than you could otherwise.

Eco friendly can take the form of items like bamboo floors.  They look great, are sustainable and are priced close to hard wood.  Plus you see them blown out at $0.49/sq foot at places like Lumber Liquidators every so often.

Basic government regulations have made windows and door significantly better than they have ever been in terms of insulation.  

Check out the Habitat for Humanity building strategy.  My uncle and cousin have been working for them for a couple of years.  Habitat ONLY builds super tight, eco friendly housing in the US at this point.  The company is happy to share it's building techniques and suppliers.

If you have an eco friendly flip it serves your customers in one of two ways:

Straight up "Eco Friendly" sells the house/condo over the others in the area.

If the customer doesn't bite on the Eco Friendly label, explain to them that their heating/cooling bills are going to significantly smaller than the neighboring houses.  If you go seriously in the Eco world, houses can produce their own energy.  Thus driving almost all monthly costs related to utilities down to nothing.

Habitat Super Eco House

In a high-end market and environmentally conscious area I think it is a great idea, and will sell the house faster. 

as @Aaron Montague suggested, try talking to some solar installers. I have a solar lease (PPA) through SolarCity that is transferrable to whoever I sell my house to (they'd have to pass SolarCity's credit check, but if they that can't do that they're probably not buying the house anyway, right?) It cost me nothing to install, and I know my cost per kilowatt for the next 20 yrs. The only downside to doing this on a flip would be the timeline. SolarCity's install was fast and easy, but getting the public utility to do what they needed to do about adding the extra meter took a few more months.

my thoughts:

-renovating uses far less new material than new construction, so you shouldn't feel tooo bad about all the refuse you create.

-if you do still feel bad, there are demo companies that will separate anything recyclable, reusable, salvageable, etc from the trash, but they probably cost a little more and take a little longer.

-building codes everywhere are becoming more and more stringent in regards to energy use.  if you are doing work that requires pulling permits and following code then by default your projects will become more eco friendly.  in my opinion i'd rather be ahead of the curve than playing catch up. 

-i'm nitpicking here but installing bamboo flooring and calling your project eco friendly really doesn't cut it.  Some would argue using locally cut FSC certified Maple is more environmentally friendly than a non FSC bamboo shipped from China. 

-there are a few studies that have shown that green homes have sold for more than their non-green counterparts:

 I for one would like to see more studies done to validate these findings.  

when I renovated my own home I tried to reuse and refurbish as much as possible. Like refinishing my cabinets and re facing with bamboo. Also went all led for lighting and put in a Eco friendly fireplace, which should be a nice value add.

As well as using all no VOC coatings on floors and walls for a little piece of mind. 

But will definitely start pricing more solar installers like sungevity. I did price sunpower but there lease didn't make sense for me.

I would love Geo thermal but that may have to be my next home due to costs. 

If it don't make dollars, then it don't make sense! Unless you're just doing it for the passion.

I like your idea though. Some are doing it with energy efficiency, especially in commercial.

It may be a niche worth looking into, but it can be costly if there's not enough demand for it in your target area

i completely agree j Martin, but you can think of it as a way of protecting your future profits from contacting due to ever rising utility bills.

Brooklyn is like hipster mania and they will eat it up!

There are so many ways to use eco-friendly supplies in your renovations.  Low VOC paint and varnish doesn't cost much more.  Recycled/reclaimed materials sometimes cost more, sometimes cost much less. I like to do as much as possible eco-friendly building that saves costs, and then can apply savings toward better insulation.  I stay within budget for standard building, but can feel good about what I'm doing. And depending on location (as mentioned above) you can use that to attract buyers who will pay extra for that.

One goal is to do this for rental rehabs, too, and not necessarily only higher end rentals, either, but those are easiest.  Fix up apartments with green features.

Originally posted by @Nick Loref:

i completely agree j Martin, but you can think of it as a way of protecting your future profits from contacting due to ever rising utility bills.

Brooklyn is like hipster mania and they will eat it up!

 Im in Oakland, and hipster mania. They will eat it up, but will they pay more for it? (assuming some of these will cost you more..?) Yuppies maybe. Young families. That have more cash. But for hipsters, I'd rather focus on (indoor?) bike parking for their fixies, place to repair bikes, higher-speed (free?) internet, planter boxes, etc to get the return by providing "lifestyle" amenities. 

Fixed utility bills, I assume you're talking about leased solar? If you're paying for it, that's true. If they're paying, less incentive. Try to tell a hipster that the higher rent is justified because they're going to pay a 8% lower fixed rate for their electricity.. huh? For the environment.. people love it. But harder to get them to put their money where their love is, IMHO. 

I think this is a great idea for a business and have been considering it myself.  But believe it is a loser for a flipper unless in a high end market where the majority buyers care about such things enough to pay more.  I do believe that in certain markets you could start a business just around making homes green for existing owners, everything from a simple audit thru a total remodel.  Having some flips to show as an example would be a huge marketing tool.  I have seen some fascinating Eco friendly houses here in Australia and have considered such a business for the Colorado market, but some of the neatest rain water collection systems would be challenging in a cold climate.

Leading an eco friendly life is something I am doing and working on. I also want to and am incorporating an eco friendly approach to my property. However, I am a buy and hold invester so there is more time to regain on the costs of some of these features. Eco friendly living will be the norm very soon, so doing these things now just gets you ahead of the game. I think trying to make the house as maintenance free as possible such as xeriscaping, solar panels etc as well as environmentally conscious fix up choices for materials you can appeal to a good market. However, if the buyer/renter is not swayed by the upgrades you can sell it on the low maintenance and cost side. I would be interested in working with others to develop a business focusing on this! PM me if you are interested!

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