Specialist · CHICAGO · Member since 2015 · 680 posts · 650 votes
Hello everyone!
I am closing on a 20 unit building and my goal is to make it as "green" as possible. It currently has 7 vacant units, it is a 1928 brick building with a flat roof. So, I am looking for any and all of the newest tricks, gadgets, or systems that people have used and are working well to better "green" their properties. We will be conducting an energy audit with our local energy company, changing out bulbs to LEDs, and using "low flow" faucets, and we will be changing out windows over the next 2 years as vacancies allow. The basement has 4 units in it, has all concrete floors and holds what will be our office, a gym, a laundry room (we will provide washers and dryers that are not coin opp...so the best washer and dryer suggestions) and a party room for tenants to book if they want to use it.
All utilities will be RUBS back to the tenants to reduce operating costs.
We are also adding a rooftop deck with a plan to have green roof space w possible rentable space for organic farming for tenants. Sound crazy? It is a little...but...BE BRAVE NO ONE EVER REMEMBERS A COWARD.
The property was also purchased VERY well so we have room for some "over improvements".
Architect · Alexandria, VA · Member since 2016 · 317 posts · 371 votes
9y
This is a great idea as buildings account for 39% of US energy consumption every year and 38% of US CO2 emissions, more than any sector. You can read an article from the Center for Climate and Energy Solutions HERE. Meghan what you are doing is not just about ROI it is also about being responsible. I understand when the money is not there to do this but when you have the means to do this you should.
I'm an Architect in the DC region and all my clients bring up the question on how to make their homes/building energy efficient. Go to Green Building Advisor if you really want to read up on how to be energy efficient. They have great articles which I have spent hours and hours reading.
Here are some tips on becoming energy efficient:
1. Insulation, insulation, insulation. This is the cheapest form of making an efficient building. You can use spray in cellulose insulation (environmentally and cost friendly) which will be easy to install in an existing building. Definitely insulate your basement by furring your walls. However, in your basement you cannot use cellulose. You will have to use closed cell spray foam (more efficient but messy and bad for the environment) or rigid insulation boards (easier to install but you will need it thicker to match closed cell R-values).
2. Windows. Get better windows. However, be sure your installer uses spray foam insulation to cover the gaps between the window and the wood studs. In most old building you can put your hand around the window and the draft that is coming in is probably because there is no insulation in those cracks.
3. Use Water Sense labeled plumbing fixtures (read HERE)
4. Use Energy Star labeled electric fixtures
5. I don't know your heating/cooling situation but on remodels you could use a mini-split system. They are more efficient than traditional system and provide healthier air for breathing (dust is pushed around everywhere). This will also look much better than units installed in the window!
6. Solar panels are dead last on the list unless your state gives some good rebates or allows for leasing. Same goes for solar water heating.
In terms of your roof top deck here are a few things to be aware:
1. Go to your municipalities zoning department and make sure you can do this!
2. Will this be an issue with your insurance?
3. If you do rent the rooftop to outside parties be sure your tenants know that this is a possibility. They might get pissed with people entering and exiting the building that don't live there. This could be a security issue.
4. Check with the building department on how many people can be up there before you have to provide a second means of egress. Usually it is up to 49 people. 50 people requires two or more exits. Here is the International Building Code, go to page 4. This equals to to 343 SF of useable roof top space. This is calculated by 49 people multiplied by 7 which is how much square feet is required for each person.
If you have any questions just ask away on the forum or PM me.
Good luck and I appreciate the fact that you are pursuing this
Specialist · CHICAGO · Member since 2015 · 680 posts · 650 votes
9y
@Thomas S. With the Millenial generation, being the largest rental pool out there I am working to not only do what is good for our planet, but the community, the tenants, and my check book. In my area there are numerous people making housing...but no one is thinking bigger than they have to. Part of my market strategy is to draw young professionals to a building that would have previously drawn a C class tenant. I like A class tenants who are too young to afford A class properties. Its a win win win for everyone. The tenants get a place to live they can be proud to call home, the energy rebates give me a better product to offer my tenants, and all the utilities are paid by the tenant. Why wouldn't I?
Real Estate Broker · Cleveland, OH · Member since 2015 · 239 posts · 224 votes
9y
Cool idea. I respect the ethics and definitely agree that it will help to draw an ideal tenant base to you.
I'm not sure what your HVAC, plumbing, electrical set up is like in your building, but there are plenty of energy efficient solutions for things like hot water, thermostats, etc. I recently put an electric tankless water heater in at my house and love it. Probably won't do you much good for 20 units, but maybe for the laundry room or shared space.
Is there an opportunity to use some of the roof space for solar to use in the common areas? Are you in a metropolitan area? I think electric cars are going to continue to become more popular in the cities, maybe having a charging station for tenants would be appealing.
Investor · Charlotte, NC · Member since 2016 · 374 posts · 189 votes
9y
I would have to disagree that millennials are the largest renting pool out there. They are loaded with debt, lack ambition and are just now starting to procure decent jobs. Housing is something that as a whole they cannot afford much of. I am not basing this off any studies and admit I could be wrong, but I don't think I am.
Why wouldn't I go green? I don't like spending (wasting) money that makes a negligible difference. Unless you are putting in a 25 SEER HVAC, efficiency isn't much of a concern. The ROI is zero or less. Yeah, I'd like to put in foam insulation in the walls of all my homes, but once again, the ROI is zero or less. Super high efficiency windows are extremely expensive and the ROI is zero or less. In fact, if you want to really go green, you should take all the windows out. They are the worst. I put in LED lights because 1) they are free from the electric company and 2) it will hopefully prevent the tenants from losing parts to the light fixtures when they replace a bulb. Not because it is more efficient.
Are you planning on turning down C class applicants that apply before your A class millennials even if they meet your qualifications? I've been doing this for 8+ years and I have never had someone ask if a home was "green". Most people are desperate to move into a quality house which I provide.
I do some things to help the tenants, but mostly because it is code and they could call the city and have it inspected. In particular, I make sure the attic insulation meets code. Not out of some skewed sense of planetary kindness, but because when the city inspects, they will find multiple issues. I don't want them anywhere near my properties if I can help.
BTW, I purchased an Energy Star certified home in NJ circa 2005 and it was absolutely terrible. There was nothing efficient about it. That program is a joke.
I am closing on a 20 unit building and my goal is to make it as "green" as possible. It currently has 7 vacant units, it is a 1928 brick building with a flat roof. So, I am looking for any and all of the newest tricks, gadgets, or systems that people have used and are working well to better "green" their properties. We will be conducting an energy audit with our local energy company, changing out bulbs to LEDs, and using "low flow" faucets, and we will be changing out windows over the next 2 years as vacancies allow. The basement has 4 units in it, has all concrete floors and holds what will be our office, a gym, a laundry room (we will provide washers and dryers that are not coin opp...so the best washer and dryer suggestions) and a party room for tenants to book if they want to use it.
All utilities will be RUBS back to the tenants to reduce operating costs.
We are also adding a rooftop deck with a plan to have green roof space w possible rentable space for organic farming for tenants. Sound crazy? It is a little...but...BE BRAVE NO ONE EVER REMEMBERS A COWARD.
The property was also purchased VERY well so we have room for some "over improvements".
If you are going to market the property to the crazy left wing environmentalist tree huggers, and charge astronomical rents under the guise of "saving the planet", you are simply a genius in making. OK scratch making.. Already a genius...
We will get you a medal of honor as soon as you rent out all the units.. Gentleman's promise. LOL
Rental Property Investor · Madison, WI · Member since 2013 · 629 posts · 339 votes
9y
I love that you're doing this. We started a Green Apartment Network here in Madison, where there is a tremendous demand by tenants looking for a green place to live. We had a group of students in the business school do a study. Not surprising that there are short-sighted views here. Just wanted to post and counter those.
We did a lot of insulating, have solar PV panels and hot water panels on our rental. A flat roof is a great opportunity for you to do the same. What about rooftop garden space? Electric car charging? I can point you to some really successful projects in Wisconsin.
Again, glad to hear it. The long view is key here. These nay-sayers will be wishing they had more efficient buildings in the future...
Specialist · CHICAGO · Member since 2015 · 680 posts · 650 votes
9y
Thanks @Tanya F. I would really love any direction you can point me in as finding the best products with greatest efficiency. I know there are naysayers. Its cool. I know my facts... @Account Closed the Millennials are the largest renting pool...buying homes even later than Gen X (age 31). The Gen X population as the tie between the end of the industrial age and the beginning of the technology age has mostly purchased their homes. The Baby Boomers are dying...when they downsize many buy condos to control their fixed budgets. So, as to be happy to educate but not care to waste anyone's (especially mine) time you can find some amazing insight to the future of investing, including the top markets to invest in now...vs hopping onto yesterdays boom town buy following Kathy Fettke from The Wealth Building Network. She has a podcast and just recently put her predictions for 2017 into a two part podcasts that comes with all the data to support it.
@Chinmay J. Its not about tree hugging. Its about listening to your customer base. The younger renters want to feel a part of something bigger than themselves, opt for smaller living space, and want more convenient amenities.
Again, BP here isn't to tell people what idiots they are, or how they don't know their business. Its here to network, add value to each other's goals, and to info share to stay on top of the latest trends. Don't diminish its value being nay-sayers. Instead ask questions that may improve your business using ideas you haven't used or failed at making a value add instead of a cost.
The greening of this building will allow me to buy the property at $16k per door and charge $550+ per unit, while attracting AirBnB in vacant units and provide a very high quality place to live. I will reduce my Ops costs by about $20k in the first years passing the shared cost of water and sewer to tenants who will be happy to assume it because their electric (heat/cooling) bills are lower. They will have outdoor green space that is safe and private and will have more amenities than ANY OTHER BUILDING for hundred of miles on a budget.
Greening the building means greening my pockets...
Wholetailer & Architect · San Francisco, CA · Member since 2015 · 544 posts · 298 votes
9y
@Meghan McCallum I think it is a great idea in all markets but especially larger cities. I can't remember which BP podcast it was but one guy said if my tenants pay less on utilities they have more to spend on rent (my opinion is it would reduce turnover and vacancy but not necessarily command much higher rent).
You mention a roof garden make sure your structural engineer is aware of everything you are putting up there the roof may not be designed for much soil and pavers.
I would look at getting spray foam insulation into the wall cavity but consult with a good architect or building envelope designer to specify it because if not done correctly you can get mold inside your walls.
Consider doing all the windows at the same time otherwise your building may look weird and you will probably get better pricing. I think the tenant will appreciate not having condensation in the winter and not mind the temporary disruption.
I'm not about the paybak period in Illinois for solar hot water and solar PV but might be worth looking into. I remember it being sunny a lot even when freezing cold in Chicago.
Depending on the head height in the basement it might be worth putting some insulation down on the slab and then putt the flooring over it. Won't improve the heating bill much but will make the residents feel warmer.
I would say getting a 3rd party to install submeters will be more effective at effecting peoples behavior than proportional metering but if submetering each unit is too hard maybe submeter by floor and pit them against each other. Most efficient or most improved floor gets free pizza every quarter.
@Account Closed is part right. The ROI is hard to capture back or quantify on a lot of these things if tenants are paying for utilities but if you can get better tenant pool, higher rents and less turnover that is worth something.
Thanks @Tanya F. I would really love any direction you can point me in as finding the best products with greatest efficiency. I know there are naysayers. Its cool. I know my facts... @Account Closed the Millennials are the largest renting pool...buying homes even later than Gen X (age 31). The Gen X population as the tie between the end of the industrial age and the beginning of the technology age has mostly purchased their homes. The Baby Boomers are dying...when they downsize many buy condos to control their fixed budgets. So, as to be happy to educate but not care to waste anyone's (especially mine) time you can find some amazing insight to the future of investing, including the top markets to invest in now...vs hopping onto yesterdays boom town buy following Kathy Fettke from The Wealth Building Network. She has a podcast and just recently put her predictions for 2017 into a two part podcasts that comes with all the data to support it.
@Chinmay J. Its not about tree hugging. Its about listening to your customer base. The younger renters want to feel a part of something bigger than themselves, opt for smaller living space, and want more convenient amenities.
Again, BP here isn't to tell people what idiots they are, or how they don't know their business. Its here to network, add value to each other's goals, and to info share to stay on top of the latest trends. Don't diminish its value being nay-sayers. Instead ask questions that may improve your business using ideas you haven't used or failed at making a value add instead of a cost.
The greening of this building will allow me to buy the property at $16k per door and charge $550+ per unit, while attracting AirBnB in vacant units and provide a very high quality place to live. I will reduce my Ops costs by about $20k in the first years passing the shared cost of water and sewer to tenants who will be happy to assume it because their electric (heat/cooling) bills are lower. They will have outdoor green space that is safe and private and will have more amenities than ANY OTHER BUILDING for hundred of miles on a budget.
Greening the building means greening my pockets...
You are painting a very rosy picture of what the future may look like which seems part rooted in your own fantasy and part in leftist political ideology - former probably is just a product of the latter. As much as I hate to bring politics into these forums, sometimes its inevitable.
I don't have exact statistical data, but I see a lot of young adults living with mommy and daddy much, much, much longer than the previous generation, and giving parents the rent money instead of giving it to some landlord. I am seeing this everywhere. Giving rising cost of healthcare, tepid economic growth during last 8 yrs, I can't blame them. Couple that with student debt is it possible.. just possible that these misty eyed millennials might just skip renting altogether and go from living with parents, to just buying their own place - albeit small. What sounds more improbable is Americans who love their suburban lifestyle will suddenly adopt Eastern European way of living in tiny apartments. Its one thing to do it when you are single or dating, but its a whole different ballgame to raise a family that way. The moment you put a smelly diaper in the picture, most people rush to the best school district in the suburbia.. That's the reality, and I don't see it changing.
You might still make money with your property if you do it right, and there could be some cost savings if you buy it at the right price, but I wouldn't be surprised if you were renting it to a bunch of 40 and 50 yr old working class common men and women, or to your much dismay young adults who all of a sudden have stopped giving crap about the "green revolution", and who look back at it with nostalgic fondness that baby boomers look at 80s hair and bell bottoms.
If you ask me the best thing the millennials can be is a part of is a generation that believes in value of hard work and not handouts.
Real Estate Investor · Knoxville, TN · Member since 2017 · 7 posts · 7 votes
9y
@Meghan McCallum Sounds like a cool idea! Someday I'd also like to run the numbers & see if adding solar panels could fit my business plan. For your property, all I can think of offhand are photosensors for outdoor LED lighting and solar water heaters, aside from the obvious (solar panels, good insulation, energy efficient appliances, etc.)- I'm sure your energy audit will turn up a lot more than that. The National Renewable Energy Lab makes free software called SAM that you can use to estimate performance & savings of solar panels- their download link is here (https://sam.nrel.gov/download), and they have instructional videos here (https://sam.nrel.gov/webinars).
Rental Property Investor · Madison, WI · Member since 2013 · 629 posts · 339 votes
9y
@Meghan McCallum, check out Sage on Jackson in Milwaukee. A LEED platinum remodel. They have another project in the works, Sage on Prospect. The developer, Mike O'Connor, is eager to share his ideas. I haven't spoken with him yet this year, but last year he said it was fully occupied.
The city of Boulder, CO requires all rental properties to become energy efficient. From their web site-
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
9y
Rain barrel outside (with solar powered pump to your roof garden).
Replace old 1.6gpf toilets or retro fit with a dual flush system for $30.
Low flo shower heads
@Thomas S. With the Millenial generation, being the largest rental pool out there I am working to not only do what is good for our planet, but the community, the tenants, and my check book. In my area there are numerous people making housing...but no one is thinking bigger than they have to. Part of my market strategy is to draw young professionals to a building that would have previously drawn a C class tenant. I like A class tenants who are too young to afford A class properties. Its a win win win for everyone. The tenants get a place to live they can be proud to call home, the energy rebates give me a better product to offer my tenants, and all the utilities are paid by the tenant. Why wouldn't I?
It is NOT the property that draws C or A class tenants ... it is the neighborhood ... if it is a C class neighborhood, you can do all the improvements you like, but you will still end up in the long run with a C class property and C class tenants. If it is a run down property in an A class neighborhood, then that is a different story ... in that case, fix it up and put in decent finishes but not over the top green improvements and you will get A class tenants. Putting money into green improvements will cost you money and not significantly raise your NOI, especially if tenants are paying the utilities already anyhow. I fail to see how this will produce a win for you. That's why you wouldn't. Otherwise, if you want a green building, then get a few five gallon buckets of green paint and go to town ... it will be just as effective in raising your NOI and at least it won't cost you too much ...
Enfield, CT · Member since 2017 · 73 posts · 26 votes
9y
Get an energy audit done on the building and they can tell you where to spend your money.
If your hvac system is old do some upgrades. If you use hot water baseboard heat. Upgrade your circulators(pumps), motors make up like 20% of the energy used on earth. The new motors will save you money. Also make sure your heating system has outdoor reset. Outdoor reset will lower the temperature the water needs to be to heat the conditioned space when the temperature is higher outdoors. When the outside temp lowers it raises the temperature of he heating loop. Another hvac upgrade would be to insulate all ducts and piping, add as much insulation to the building. You could upgrade the entire system but if the boiler/furnaces are newer you would be better off possibly just changing system components. Again an energy audit would tell you where to focus your efforts. Good luck from CT.
All utilities will be RUBS back to the tenants to reduce operating costs.
We are also adding a rooftop deck with a plan to have green roof space w possible rentable space for organic farming for tenants. Sound crazy? It is a little...but...BE BRAVE NO ONE EVER REMEMBERS A COWARD.
No, you aren't crazy--just forward thinking. Because of the stigmas out there against "greenwashing," I try to make a habit of directing focus on the benefits of pursuing an energy efficiency or building performance upgrade. The dollars and cents may not pencil in immediately, but up-front improvements can have an impact on your sale later down the line, lead to happier tenants, and reduce maintenance costs.
Impact on home sale
The studies are starting to come in (most looking at single family), and there are folks around the country working on integrating energy efficiency into the appraisal equation. One study showed a 6% premium in sales of homes that had pursued energy upgrades.
Lead to happier tenants
The US we've seen soaring rates of autism, asthma, and Altzheimers disease. Smart home design using natural materials, proper ventilation, and adequate carbon monoxide testing are methods to address this. There is also a rise in studies seeing the benefits of biophilic design (incorporating natural elements into buildings). Some figures cited here. The big question here is whether or not the investor will benefit financially. That's the catch here, and i'm not sure that many have tested the waters! The hope is it that if your tenants are spending less time at the doctor, more time at work, and spending less on utilities, they'll have more money for rent and will stick around longer.
Reduced maintenance costs
If the building is more efficient, less water (water heating/boilers) and less conditioning of air (HVAC) is needed. If your mechanical systems have fewer hours of use logged, they will last longer and see decreases in use.
You should definitely talk to your auditor about any and all utility rebates available. I love that you are thinking holistically beyond energy to incorporate an atmosphere of healthy living (e.g., rooftop garden). There are dozens of examples of "eco villages," mainly in Europe that have bought into the concepts you are referring to and have tenants flocking to get residence. If you are unable to afford substantial energy upgrades, I'd encourage you to still pursue community building for the apartment tenants and the simple upgrades (LEDs, faucet/showerhead aearators, programmable thermostats, start a composting program, incorporate natural elements (e.g., plants) into common areas.
Jamesville, NY · Member since 2015 · 55 posts · 34 votes
9y
This sounds like a cool idea. Are you trying to appear green because it is trendy or actually be functionally green? Green roofs, organic gardens, and LED bulbs are nice and flashy, but much of the actual environmentally friendly things you can do are less sexy. Furring out walls to increase insulation, using reclaimed and refurbished materials (see if your local Habitat for Humanity has a ReStore), and high efficiency furnaces are great ways to reduce the carbon footprint of the building. They all will probably reduce your bottom line and aren't things that looks fun in a picture though.
Everyone blames cars for greenhouse gases and climate change, but in fact buildings are a much larger contributor. I'm all for it if you can make it financially viable.
Jamesville, NY · Member since 2015 · 55 posts · 34 votes
9y
Now that I mention cars, how is the neighborhood? One idea I've had is bike rentals. I've seen it on a few college campuses but I wonder if it could work on a smaller scale in an apartment complex. If its in a decent area and there are shops and entertainment nearby, having a few bicycles that people could rent out by the hour or daily could encourage people to drive less and make a happier community.
Specialist · CHICAGO · Member since 2015 · 680 posts · 650 votes
9y
My goal is to be functionally green, while making green sexy, thus driving tenants to this building. Its two blocks from a great University. I plan on partnering with them to allow them to use the rooftop deck for special events a couple times a year. I will be using 4 efficiency units for AirBnB. We have planned to add an electric car charging parking space up front to the door when we completely renovate the parking lot (with recycled materials, half being the reground asphalt of the parking lot itself, the other half is concrete and that is being taken to a plant that crushes it and recycles it too). I'm very excited about this project because I am taking european and large city ideas and making these changes in a small MSA. I have educational, political, real estate related partners very excited to see this project move forward. Could I do it cheaply and make a ton of money like every other investor out there...sure. But, I have been VERY successful in doing what everyone else is afraid to do. If I can bring a C class property in a C class neighborhood to be looked at as an A class (I will totally accept B class) property and get media attention and the professional respect from the MSA I invest in...then green is officially sexier than the nay-sayers thing.
@Account Closed You have been super helpful. I will reach out to Mike O'Connor. I'm in Milwaukee often. I will have to check out his projects, thanks!
BE BRAVE...NO ONE REMEMBERS A COWARD and GO TO WORK, MAKE MONEY
Real Estate Investor · Memphis, TN · Member since 2016 · 940 posts · 695 votes
9y
@Meghan McCallum - I think your marketing idea is great and will hit a certain demographic and luckily, you have cash to do it! My suggestion is to find some type of distinction/certification that doesn't cost a fortune. LEED is expensive but there are others (https://www.wbdg.org/resources/green-building-stan...)
That way you can reach your audience with something as simple as a business card.
Also market the cost savings in utilities.
Good luck. Post pics when you start getting these things going. I can't wait to see your garden!
Real Estate Investor · Memphis, TN · Member since 2016 · 940 posts · 695 votes
9y
Also if you need/want additional help, you should totally get in contact with the environmental studies/science department at the college and see if they have any students interested in an internship learning how to "green" a commercial property. You should be able to get some motivated help with little or no money. If I were a student, I'd love that experience!
Rental Property Investor · Madison, WI · Member since 2013 · 629 posts · 339 votes
9y
For section 8 and B/C housing, it is EXTRA important to make the home energy efficient. These people can least afford high utility bills. Many cities have programs for subsidizing these improvements. We certainly took advantage for our section 8 tenant. She found the programs for us, in fact.