In the current green real estate market, investors and managers need to have all kinds of proverbial tricks up their sleeve. Not only do you have to solid financial implements, you also have to have some basic skills for simple repairs. The real secret to today’s green real estate market is going back to basics for the green rental property.

As the industry experiences one of the worst downturns in decades, green real estate investors and managers are reconsidering the old approach of actively maintaining their properties, with a little twist for inexpensive green add on’s. It is simply getting harder to just have a “turn key” mentality for rentals. A quick coat of paint, a carpet shampoo, and quick clean up will not cut it.

The thought may be counter intuitive, but it works. In today’s rental market, people are looking more at the basic upkeep of buildings, they are looking at how much it will cost to heat and air condition the rental property. They are looking at issues of the energy efficiency of the appliance installed in the rental.

The back to basics approach also helps the problem is devaluation of the property. The current economy requires that you have a plan in place to 1) protect and enhance the value of the rental asset, 2) adapt to quick changes in the market, and 3) be able to reallocate resources. This kind of basic mentality should position investors and managers to take advantage of the inevitable recovery, whenever it fully comes. Put simply, you will generate value through maintenance and green enhancement.

If liquidity is an issue, then look for tenant improvements that let you do a lot for a little investment of money. Consider options like appliance replacement, light fixture replacement, even something as simple as more energy efficient light bulbs. Window shadings, in neutral colors, can also be a good option for helping to reduce the amount of solar heating for the summer. Another popular option for getting a lot of “bang for the buck” is with water filters for taps. This little tactic has been used well in the northeast region of the United States, and will surely be seen elsewhere over time.

Getting back to basics for the green rental property, then, involves a two step philosophy. What types of general maintenance and green improvements can you do to help attract quality tenants? Secondly, what types of maintenance and green improvements can you do to help preserve the overall value of the rental property. Both work hand in hand. Better looking property attracts better paying tenants, which in turn helps to solidify the value of the property. That is a one two punch that can’t be beat in this market.

Even with the economy slowing starting to improve, it can be a tough time to sell a home. Many analysts have considered the current real estate market one of the toughest in the last 100 years. What do you do, though, if you really want to sell your home in this market? You might want to consider some quick green renovations to your home.


Here is the idea: making your home a more attractive buy, via quick green renovations, involves adding technologies that can reduce monthly energy bills, reduce water usage, improve the quality of the air inside the home, etc. In more noble fashion, it can leave behind a friendlier footprint for the environment. Practically, you would be taking advantage of some easy eco friendly renovations that will make your home stand out from the rest in the market. People are looking for value in what they buy.


The idea is certainly being used by smart real estate professionals. An agent with Daniel Gale Sotheby’s International Realty, of Long Island New York, recently stated, “Home buyers are looking for added value in every purchase they are making. They either want an awesome price or extras — such as those extras found in a more energy-efficient house.” Anderson Homes of North Carolina has even been able to see an increase in their home sales (to the tune of 30 percent) by focusing on the sale of eco friendly homes.


Smart home buyers are also turning to the Internet to help them find homes that can save them money on energy, water, and other home costs. One of the biggest in the market is ListedGreen.com. Each listing is checked, in order to assure that the home is truly a green real estate value. Getting your home listed here is a real advantage.


Here are some ways to make your house stand out from the rest by going green: get the attention of buyers buy making the home more energy efficient. Changes in HVAC, low flow fixtures, additional insulation, etc., can often be recouped at 100 percent, while allowing sellers to quickly move their home at or near asking price. If you can show people that your home has lower energy bills, it will get noticed.


You may also want to consider getting a green certification for your home. Some examples of these are the EPA’s Energy Star for homes and the Green Building Council’s LEED certification for homes. These certifications provide a kind of third party authority to your claims.


If you are going to make changes, then you will also want to document all the changes in your energy bills. Be able to show potential buyers how much your energy bills have went down. It does not hurt to be able to show comparisons with similar homes in the area.


Finally, don’t forget to the do the simple changes. Make sure the light fixtures are eco friendly. Change the filters in the house to high efficiency air filters. Replace old appliances with Energy Star models. All of these little changes add up.

So you are ready to look at some options for building a green home. There are some definite things to keep in mind that can help you not only make the home for energy efficient, but also more environmentally friendly. Here are some points to consider in the design process.


First of all, consider the interior of the home. Use Energy Star appliances throughout the home. Quality energy efficient appliances will be one of the biggest cost saving measures you can add to your green home project. In addition, make sure light fixtures can make use of newer LED and energy saving light bulbs. These two simple things will save a lot of money.


Appliances that save water will also be of benefit to you. Consider these options for any dish washer or washing machine. In addition, you may want to look at an ?instant on? water heating system. The cost is more initially, but the savings pay off. HVAC appliances will also be important to consider, based on your location in the country.


You will also want to consider the type of paint, stains, and glues that are used in the construction of your home. There are more options now for products with little to no volatile emission. You will also want to take a look at the type of cabinets you buy for the home. One of the big developments of the green construction boom has been a process that allows manufacturers to produce cabinets that give off less chemical emissions.


Consider the type of flooring you will use also. Few people realize that there are now options for flooring that is made from renewable sources. One such option is wood flooring made from bamboo. Bamboo is strong enough to hold up on the floor for years, and protects old growth forests. You get a quality floor and the chance to feel good about your decision to protect our trees.


Insulation is also important for the home. Getting 8?-12? of insulation can really make the home more energy efficient. You may also want to consider adding at least two feet of overhang shading to very sunny sides of the house. You can still get light in the home, but the overhang can reduce the amount of heat and direct sunlight that enters the interior of the home. It can lower summer cooling bills, and reduce the amount of damage done by UV exposure to furniture and flooring. If you live in the northern most points of the United States, though, consider what the sunlight can do for heating and lighting the home. Make sure the trade off is a good one. Having a little extra heat in the home in winter may offset the extra cost of summer air conditioning.


Low E windows are also a must for the green home. Quality windows will pay for themselves time over, by reducing the amount of heat entering the home in the summer, and cold entering the home in the winter. Quality windows will also reduce the amount of mold forming, pest attracting condensation on the home.


Finally, also consider how much topsoil surrounds your home. Deeper topsoil helps to retain water for landscaping, thus reducing the amount of needed watering. You may also want to add a rain barrel to your guttering. This can be used to water plants. You may want to also plant drought resistant native plants in your new yard, as these plants will require less work and water to remain attractive.


Building a green home can involve some work and planning. Not all construction companies are savvy on these types of green home additions. The work, though, will result in money saved in your pocket.

There is certainly a lot of buzz around the green real estate technology sector these days. Money provided in the form of economic stimulus, as well as general public interest, is causing this business sector to boom. In the process, though, green real estate energy efficiency could get lost.

Advocates of energy conservation still continue to argue that more incentives ought to be available for energy basics, such as insulation, window shading, and new light fixtures. The idea behind this type of energy efficiency is simple: make the first area of savings in cooling, heating, and lighting. It’s the low hanging fruit.

In 2009, McKinsey & Company did a report on energy efficiency. The basis of the report was to compare the cost of saving the environment a ton of CO2 emissions. Wind power, for example, costs around $38 per ton of CO2 saved. Solar energy costs $30 per ton saved. Yet, doing something as simple as replacing incandescent lights in an average sized home actually saved $159 per ton. Energy efficient appliances faired almost as well, at a savings of $108 per ton of CO2 saved.

The recent round of Stimulus Package money provided around $40 billion for making use of new, renewable energy technology. The amount of money available for energy efficiency was around $20 billion. There are also some inequities in the amount of tax credit a person can receive.

If the real goal of having green real estate is to reduce the amount of energy used, one cannot ignore doing the basics first. Even from a money perspective, it makes sense to start any green real estate renewal project with simple basics: insulation, lighting fixture change, appliances, windows, etc. It is a win/win for the property investor and home owner.

You would also get support from such groups as the Solar Energy Association. Monique Harris, a spokesperson for the group, was quoted as saying, “Itis silly to invest in solar energy if the extra power is blowing out the window.” She went on to comment that new technology and energy efficiency basics must work together, in order to accomplish the goal of saving energy.

It is easy to get caught up in the desire to add new technologies to your next green real estate project. As a general rule of thumb, Americans love new gadgets. The new green technology industry is also getting a lot of press for the jobs the industry is creating. The American public has good reason to romance this new business sector. In the mean time, though, the savvy green real estate investor needs to make sure that the basics are covered. Not forgetting green real estate energy efficiency can work for you too.

In the coming year, there will be more legislation hitting the doorstep of Congress, designed at increasing the incentives for energy efficiency. Groups like the New York based National Resources Defense Council will be leading the charge. Rep. Peter Welch of Vermont will also be trying to add more legislation to this cause this year. Stay tuned.

One of the new trends on the rise is Appraiser Validated Broker Price Opinions, or BPO’s. The idea is not unlike asking for a second opinion at the doctor’s office. In fact, Appraiser Validated BPO’s could help the green real estate industry.


In coming year, more and more banks are going to be working hard to keep property valuations within 20 percent of the break even mark. There are times, though, that certain properties will need to go beyond this point, in order to allow room for green real estate investors to make needed improvements, and still have a fair bottom line. This task is going to get harder over the next year. Just having some good realtors to work with, for BPO’s, will not be enough. High risk BPO’s will be a hard sell.


The appraisal industry is also suffering its own economic troubles right now. Many appraisers are seeing as much as a 40% drop in the average price they receive for an appraisal. Banks are getting very competitive in awarding work. The bottom line: savvy appraisers will be looking for new market lines, like providing second opinions on tricky BPO’s. They can also help to identify high risk BPO’s.


Getting the best price on a short sale should become easier, though, by working with a good appraiser. Appraisers will be able to help green real estate investors better explain the need for why heavy rehab costs will be necessary, in order to make a house more energy friendly. They may catch issues with HVAC, roofing, windows, etc. that a realtor may overlook. They may also be able to just confirm the BPO.


The First American Corporation is one of the first large companies to start offering this service in its branches around the United States. As part of their marketing campaign, they are stressing how Appraiser Validated BPO’s can actually save money, by cutting down the need for in-house review functions. This saves time as well.


The work done by an Appraiser will not actually be a true “appraisal” of the property. It is designed to validate and confirm the values that were determined by the local Realtor involved. The Appraiser can also validate the accuracy of the comparable sales involved in the transactions, as well as provide alternatives. They will become the green real estate industry’s version of “expert testimony,” when negotiating with banks on the value of a short sale property.


If used as another tool in the negotiation game, Appraiser Validated BPO’s could help the green real estate industry maintain a fair margin in the short sale transaction. Look for more companies like First American to start offering this service across the United States. Independent appraisers will also be quickly joining this game, as they are asked to give more and more discounts in their fees. If you consider using an Appraiser to help you with confirming the value of a BPO, don’t forget to ask about your fee as well. Asking early may save you some in the cost of using this new service.