Real Estate Blog

Real estate investors are benefiting from the the aging of the Baby Boomer generation just like private homeowners. We're seeing a lot of older properties in gorgeous, established neighborhoods coming up for sale. The Boomers are hitting 65 and looking to downsize. Basically, their thinking is, "Let someone else mow the lawn and tend those beautiful old shade trees."

Now, remember those intriguing figures I shared a couple of weeks ago. Green properties cost 30-60 percent less to operate and appraise for 10-15 percent more. When you can offer a green home, you're appealing to a growing tenant base looking for a long-term commitment. And these folks can easily turn into buyers if that's your ultimate goal for the property.

So, with these factors in mind, what are the best "green" decisions you can make in rehabbing a property without breaking the bank?

Frankly, those big ole trees are your best, cheapest energy bet. A home with good shade on the roof will have heating and cooling costs 30 percent lower than those for a home with no shade. The most efficient homes are those with trees situated on the south and west side of the structure. Also, find ways to get the heat load off of concrete and asphalt -- driveways, sidewalks, patio. You want shade -- or you want to create shade -- on those surfaces.

In older homes, insulation can be as much as 50 percent under the current energy code suggestions. You want about 8-10 inches up there in the attic. The average savings on electrical bills is roughly $145 a year, but it's usually higher and really depends entirely on how your tenants are going to personally use power. Telling them they have a well-insulated attic gives them a good leg up. Heating and cooling alone accounts for 70 percent of the cost of running a home, a good fact to know when you're discussing why you put all that insulation in the attic.

In any rehab, make sure your contractor breaks out the caulk gun. You want tight seals around all the doors and windows. And, if you're replacing windows, look into models that come with built in shades or have heat reflective glass. You want natural light in the home, but not heat. There's a great product on the market called a Solatube that will channel sunlight into any room without bringing heat with it. The more natural light you have during the day, the less you have to flip that expensive light switch. Renters love to hear the phrase "low electrical bills."

Finally, if you're replacing flooring, make sure you're opting for materials with a low toxic profile. This will not only appeal to people with chemical sensitivities and allergies, but it's safer if -- God forbid -- there's a fire. People are rarely killed by flames in a house fire. They succumb to the fumes. Green isn't just about energy efficiency, it's also about being as chemical-free as possible.

The list of potential green upgrades that will enhance the value and "rent-ability" of your property are endless. You can look at everything from programmable thermostats to just making sure there's a ceiling fan in every room. Your best planning strategy is to find a contractor who understands green upgrades and who can intelligently discuss costs. You can't work out a reasonable budget without good base figures. No one is interested in cosmetic green. You want the real thing to get the real value these kind of choices add to your investment property.