Working with clients throughout the US has given me opportunities to observe a wide variety of markets and an eclectic mix of investors. Some invest in real estate part-time and many are running companies with full teams of support. There are five questions that I am asked the most often by investors. I thought I’d share these with you so you can see what your fellow investors are asking about green real estate. So here goes:
The Top 5 Green Real Estate Investing Questions
Does green mean I have to replace all of the windows and get solar?
For whatever reason, this is the #1 question I get asked. The short answer is that I have rarely suggested replacing windows and have yet to suggest adding solar to a typical residential or multifamily rehab. The biggest reason is that windows and solar usually don’t make financial sense and the ROI is too long for most investors. Also, there are many other low cost/high value items I’d suggest to improve energy efficiency BEFORE considering windows or solar.
Do I have to get my rehab certified green when it’s done?
Many investors think you need to get a house certified green for it to be green. Not true. We define green as a property that creates a healthier living environment, costs less to operate (utility bill savings) and is less harmful to the planet. You don’t need to be certified to have a green property. We pursue certifications when there is a demonstrated ROI for doing so. If you cannot find a definite ROI for a certification, I wouldn’t recommend pursuing it as it will cost you more $$ and slow down your project.
Won’t green materials cost me more money?
Green materials used to be incredibly expensive and hard to find. Nowadays you can find great green products at Lowe’s or other home stores. They key is knowing which brands and which products to buy.
The smartest way to incorporate these materials is buying looking at every item on your budget and seeing if you can replace it with a similar (and less expensive) green alternative. The more green items you can incorporate, the more you’ll save and the more things you can market as ‘green’ when you are selling or renting the property.
My contractors don’t know anything about green, who’s going to train them?
This is the question that investors ask with a panicked look in their eyes. I can just imagine they are thinking they are going to have to explain the specifics of green building science to a contractor who can’t understand email.
The truth is, the methods of installing green materials are the same. If your contractor can lay regular carpet, he/she can lay eco-friendly green carpet. There are very few specialized skills that would fall outside of regular contractor knowledge in a typical project. For those project elements (a rainwater harvesting system for example) you’d hire a rainwater specialist for that.
Your contractor will need a very basic understanding of the goals of the project (energy efficiency/water conservation) and the materials needed (no-VOC paint, non-toxic carpet, etc.). With that, they’re ready to roll.
If I go green on a project won’t it cost me more money and take longer?
Only if you do it wrong and don’t plan ahead. Greening a project is like any other investing decision. What you do should largely be based on it’s expected return on investment. If you don’t see a clear path to either cost savings or additional profits you shouldn’t pursue it. Further, greening a project should never take longer than a regular project. Greening a project is largely a system of replacing one method of doing something (installing carpet) with another (installing cork flooring). It’s project coordination at it’s basest level.
Hope this Q & A answered some questions for you. One of my biggest challenges is de-mystifying green real estate practices for investors. It doesn’t need to be as complex as we make it sometimes. We like to say we follow the simple mantra of “Do Good, Make Money”.
Photo: Phil Campbell