Monetizing your business by going Green! Renovating a property makes it more salable or rentable by improving the investment.This is the underlying expection of any renovation that takes advantage of the spread between a property in distressed or wholesale condition and a retail sale.
If a renovation included some energy efficiency components that were subsidized, the performance of the investment could be improved dramatically.Would you consider this?
If the renovations attracted grants,incentives,rebates and tax credits(state and federal) for 40 percent to 60 percent of total expense this reduce the capital expended. Would this be attractive?
If the renovation reduced ongoing energy costs by 30 percent to 60 percent even though these costs were paid by a renter,but generated a higher rent because of a lower cost of occupancy should a rental owner consider it?
If various appraisal rules were being applied to increase appraised value by between 5 percent to 15 percent and this was shown to impact price and time on market,should an investor consider it?
1.An advertisment that emphasized “green” and energy efficiency was created and posted on Backpage.com A similar ad with no reference to energy efficiency also was used.
2.Prospective tenants responded to the online advertisement.The energy efficient ad got three times times the response.
3.The leasing representative at the property management company were coached on energy efficiency and how to sell the idea to tenants in terms of savings. The tenant prospects as it turned out did not need convincing.
The advertisement attracted a higher number of better quality renters that were willing to pay the higher rent.The property rent was achieved with little or no additional effort.
The advantage of positioning yourself as an” Green”business owner is still a unique message for the average tenant. The fact this position increases rental income makes the property and any property owner using this strategy more effective.
Energy efficiency or “Green” attracts a better tenant demographic that is willing to pay highher rents for a lower cost of occupancy becaause of lower energy use. The owner clearly benefits in terms of incentives,fewer vacancies and more reliable tenants.