by Theresa Bradley-Banta
The importance of incorporating green strategies in your multifamily investments
If you are a multifamily housing investor, you’re already helping create denser, transit-friendly communities. However, there is likely more that you can do in the area of energy-efficient multi-unit investing. In addition to helping the environment, it also benefits you in a variety of ways.
ENERGY STAR for your existing buildings
According to the Environmental Protection Agency (EPA), owners of multifamily housing units can reduce multifamily operating costs by 30 percent by making some energy-efficient improvements to existing structures. There is a helpful Portfolio Manager Tool to get you started. You can even earn an ENERGY STAR certification for your building. This will improve your position among the competition and demonstrate to potential tenants and current tenants that you are doing your part to help the local community and the environment.
Would you like your property to be the first choice for the many millennials who make living an environmentally-conscious lifestyle a top priority?
Here are some things you can do right now to reduce your multifamily operating costs:
- Convert common area lighting to LED
- Install low-flow toilets, faucets and showerheads
- Repair leaking plumbing fixtures
- Upgrade to energy efficient appliances, hot water heaters, furnaces and air conditioners
- Use low VOC (volatile organic compounds) paints
- Weatherproof windows
- Check caulking and weather-stripping
- Install Wi-Fi-enabled thermostats
- Use green materials in apartment finishes (recyclable carpet, tile, wood flooring, backsplashes, countertops, cabinets, etc.)
- Look into alternative energy sources such Xcel Energy’s WindSource®
- Offset electrical use with renewable energy credits
- Offer recycling programs to your residents
- Use natural cleaners that are good for the environment
The important millennial demographic
If you are staying up-to-date on the latest news about millennials, you probably know that many are opting to pay down debt rather than purchase their first home. The latest NAR annual survey of home buyers and sellers found that only 32 percent of home purchases last year were made by first-time buyers. This is good news for you as a multifamily investor if you have the green features that are important to them.
The National Association of Realtors (NAR) reports that millennials prefer an environmentally conscious lifestyle. They are the sharing generation and appreciate the benefits of multifamily unit buildings. Green features attract members of this important demographic and keep them happy.
Tax savings and resale value
The U.S. government offers incentives to businesses that incorporate green technologies and processes into their operation. Start by checking the Database of State Incentives for Renewables & Efficiency.
When you can show significant operating savings, your green apartment building becomes more attractive to buyers. For every $1.00 per square foot that you save in operating expenses, you can increase the net present value by approximately $10.00 per square foot.
In addition, if your project is certified by the U.S. Green Building Council’s LEED program, you can back up your green performance claims.
Do your homework. Make sure the return on investments is worth the upfront cost. There are many options to consider, and not all green features carry the same ROI. If you take the time to carefully research and choose the best ones, you will reap the benefits for many years to come.