Sustainable, green, eco-friendly: whichever term you want to use, it is one of the most interesting upcoming trends in building, renovations and investment.
As a real estate investor, you know that following such trends can be a lucrative business strategy, when done right. It’s valid to wonder: will eco-friendly builds and upgrades be a solid investment with the potential to change the world, or are they just a shiny drain of time and capital?
If you haven’t yet learned about green building standards, you may be quite fascinated to hear just how they work. By combining solar, energy efficient, and water-saving technologies, builders are now creating. Plus, there are top-of-the-line computer systems, sensors, and software to run it all on schedule.
Luckily there is a strong foundation of information on eco-friendly real estate investing. Read on and become part of the global conversation.
Career Booster
In the United States and around the globe, LEED is the standard for eco-friendly planning and construction. The a acronym stands for Leadership in Energy and Environmental Design, and under the LEED certification program, there are four tiers of quality for sustainable buildings: Certified, Silver, Gold, and Platinum. Hundreds of thousands of properties, including school and government buildings, have already built according to these standards.
According to the US Green Building Council, LEED-certified buildings will save millions in energy, water, maintenance, and waste management costs from now until 2018. This makes investing in sustainable properties a forward-thinking approach, and by being associated with properties that are the Gold and Platinum standard you can find more doors opening for you in the real estate investing world.
Tax Benefits
Green construction is one of the main economic drivers in the U.S. right now, and for good reason. Due to the positive environmental impact of green buildings and upgrades, there are many enticing financial incentives available for builders – as well as for real estate investors.
Investors can take advantage of Section 179d, which is a deduction for installing efficient HVAC and lighting systems. The Energy Investment Tax Credit (EITC) and MACRS rewards property owners to install solar or wind energy systems, in the form of a 30% federal tax credit. Many more possibilities await if you are dedicated to creating income from sustainable properties.
Client Satisfaction
Investing in the green real estate market is beneficial because it brings you into the fold of a passionate and driven community, and therefore, a new set of prospective clients. Surveys have shown that a large segment of the public is generally willing to paying higher prices on purchases that are eco-friendly. Why shouldn’t that also apply to real estate? Plus, the next property owner will save a significant amount on utility costs that usually come with properties.
Take the time to ensure your upgrades are meaningful, top quality selling points that will increase your property’s value. Then, home buyers, and even fellow investors, who are interested in helping the environment will be hard-pressed to say no to your deal.
In short, there are many costs involved with building and renovating properties in a sustainable manner, but there can also be big returns. Whether the expenses are worth it is up to you, as a smart investor, to decide for yourself. Or, you can start out investing in REITS for an instantly diverse sustainable real estate portfolio.
What you can know for sure is that a strategy in the green real estate sector opens up doors for new opportunities and incentives, and an environmentally responsible business model.
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