Sustainable real estate may provide sustainable tenants- and enhanced financial performances
For those who follow my research, I have recently been tracking emerging markets for the purpose of providing sustained real estate investment returns. The amount of available information is mind-boggling, and my mind pinging with ideas and possible opportunities.
The journey has taken me from identifying the best locations to invest in for long term sustainable returns, to green buildings, and now net zero buildings and many things in between.
What is a Net Zero Building?
· Net Zero buildings are capable of generating equal to or more energy than they use, hence the term (net zero). It may even be possible to sell the excess energy back to the utility company. The use of solar powered shingles, wind, and incredibly high efficient green products make this all possible.
· Did you know you can actually build a net zero building that is fire, water, mold and hurricane resistant?
Sustainable takes on many exciting meanings
I have often stated within conversations that the word sustainable is as important in real estate as the famous phrase “location, location, location.”
When I first started tracking emerging markets it was around the time that hurricane Katrina went through the Mississippi coast. The Biloxi area at the time was considered an emerging market. Meaning the area was poised for growth. The market was affordable and all demographic pointed toward sustainable returns for investors to invest. At the time, there was a financial incentive for investors to help rebuild the community. A program called the “Go Zone” was implemented and investors build homes to rebuild the region and managed to create enhanced financial returns to boot.
While controversial, investors looking to capitalize on the real estate trends aid us financially to assist us in advancing forward. Collectively, investors, engineers, designers, and many people including concerned citizens who demand safer homes have created better, greener, safer buildings.as a result.
Mother Nature creates demand for more sustainable real estate.
Mother Nature has been a catalyst in the need for safer homes, homes that resist fire, water, mold and hurricanes. Scientist and engineers now have a huge focus on building incredible products that allow us to build homes that can handle most everything these “acts of nature” throws at us.
· Homes that can flood and essentially be drained out because the entire home and all of its components are waterproof and therefore are also mold proof.
· Homes that can resist fire as the building components are all fire proof.
· Homes that can handle 200+ miles per hour winds.
These new building products and techniques using all green products indeed give a new and exciting meaning to the word sustainable
When sustainable (Green) and Sustainable (ROI) Merge you have created a truly sustainable investment
Investors/homeowners and tenants alike now want sustainable buildings.
· Higher rents.
· Higher occupancy.
· Stronger net income.
· Lower vacancy rates.
· Lower insurance bills as insurance companies have low probability of claims.
Homebuyers and tenants like:
· Reduced utility costs.
· Net zero houses now have no utility costs. These homes are so efficient they have very low carbon imprints.
· Safer, stronger structures, that can be fire resistant, wind resistant, water resistant, mold resistant.
· Lower insurance bills as insurance companies have low probability of claims
Sustainable real estate, rapidly becoming the new norm
Indeed, sustainable real estate means different things to different people; some view it as sustainable buildings (green building/environmentally friendly) others view it as sustainable investments (ongoing predictable investment returns).
There is even a trend among real estate flippers that have embraced the sustainable movement and do their renovations to be environmentally friendly. Flipping to green standards is known as greenhabbing. In fact, you can even have your flip certified to confirm maximum compliance.