Big Benefit, High-Return Green Real Estate Retrofits

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There are literally thousands of ways to green your investment property. Everything from wind, solar, rainwater systems, high-tech HVAC motion sensors, etc, etc. There are also hundreds of books on the topic all advertising to be the latest and greatest. While much of the info is good, it can be overwhelming to decipher the best methods to pursue. If you’re a typical investor, you don’t have the time or the inclination to research all of the trends, products and methods available. You need the right answers and you need them fast. With that said, here are three guidelines when considering green retrofits:

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Think Low Tech

Why bring a laptop to a meeting when a pad of paper will do? It’s overkill, cumbersome and wastes time. It’s the same thing with green retrofits. You should always think of the lowest tech solution to your problem. For example, say reducing water usage at a property is a concern of yours. Here are a few potential methods to accomplish this:

A. Install low flow toilets.
B. Install a greywater system (if your city allows it).
C. Install sink aerators.

Option C is the least costly, quickest and the easiest to perform. It’s about as low-tech as you can get since aerators cost less than a buck each and can conserve up to 50% of water usage in a typical sink without a noticeable difference in water flow. Also they are unbelievably easy to install and can be purchased at any hardware store.

Think ‘Out-Of-The-Box’ ROI

ROI is crucial to real estate investing for obvious reasons. However, you need to look beyond the typical ways to measure ROI on your properties to see if a specific green retrofit is worth it for you. Here are a few non-traditional questions to ask:

1. Will this improve the appraisal value of my property? If so, by how much money?
2. Is this a sexy upgrade that will attract more prospective renters/buyers? Low-flow toilets aren’t sexy while rainwater harvesting systems are.
3. What buyers/renters will most appreciate this upgrade? Is there another target market available to you if you do the upgrade?
– For example a 1 bedroom fix-and-flip condo isn’t typically targeted to a small family with an infant. However, it becomes much more viable to a family when the paint, cabinets, flooring and carpet are all organic and non-toxic.

Think ‘Ease Of Execution’

You might have the greatest green retrofit in the world but if you or your contractor can’t install it, it’s not worth much. You should be able to explain it to your contractor and get it installed/upgraded relatively easily.

EASY: Rainwater systems are a perfect example. These systems which collect rainwater to use for irrigation/flushing toilets, etc. look complicated at first glance. In fact, they’re quite simple. Water collects from the roof through a gutter-like filter, goes into a tank and connects to an irrigation system. Depending on where you live you in the US this can save you hundreds of dollars a year on irrigation.

CHALLENGING: Re-mapping all of your existing plumbing so hot water doesn’t have to travel as far, thus saving energy and reducing heat. Wow, even the explanation is wordy. This one is costly, time-consuming and while it does save energy, it’s almost never recommended.

With green retrofits becoming more prevalent to the investor community, these three guidelines are a great filter to use to see if a product, service or idea is really worth it to you. Anything you are considering should pass the common sense test. If you can’t articulate the the benefit of it, then there is probably a better answer.

About Author

I help real estate investors increase profits and property values through a variety of green strategies. I help clients find hidden rebates, tax incentives and credits to maximize returns on any property. www.JimSimcoe.com

1 Comment

  1. Los Angeles was one of 25 communities selected to receive a slice of $452 million in Recovery Act funding under the Department of Energy’s Retrofit Ramp-Up Initiative. The initiative promotes the concept that communities, governments, private sector companies and non-profit organizations will work together on pioneering and innovative programs for concentrated and broad-based retrofit projects.

    A simple example of how the Retrofit Ramp-Up Initiative would work would be to have the same construction crew upgrade all the homes on the same block at the same time. The White House notes that this way of doing business, “…Saves contractors time and money. They can pass the savings on to their customers. And it’s just a much more efficient way to operate.”

    Biden said the program, part of $80 billion in the Recovery Act for a clean energy economy, will help consumers save money on their energy bills, lower greenhouse gas emissions and create green jobs.

    The models created through this program are expected to save households and businesses about a $100 million annually in utility bills, while leveraging private sector resources, to create what funding recipients estimate at about 30,000 jobs across the country during the next three years.

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