More consumers and businesses than ever are investing in eco-friendly real estate. It is projected that the green construction market will be worth over $770 billion by 2030.
Eco-Friendly Real Estate Investments Are Becoming More Attractive than Ever
The green real estate trend has emerged as a winner in recent years, with a growing number of homeowners, investors, and developers making a beeline for it. The idea of going green and saving money simultaneously is compelling. But the attraction is greater for residential buyers as they have a healthy place to live in. Conversely, you may have some qualms about spending more on such properties as an investor because they are expensive compared to regular options.
Some people are still skeptical of investing in green properties, because they are often more expensive at first. However, green real estate makes sense from a money perspective. Let us explain why it is a money-savvy decision for an investor.
High rental demand
When you buy an investment property, the long-term rental potential matters a lot. The good thing about choosing green options is that these are in high demand. You will hardly have to worry about falling short of tenants with sustainable living becoming a top priority for renters. In fact, they are ready to shell out more for such homes as they can save up on energy bills in the long run. Moreover, occupants enjoy a better life standard due to enhanced air quality, more natural lighting, and optimal insulation in such living spaces. They have good reasons to stay for the long haul, even if it means paying more.
The demand for eco-friendly rentals will continue to increase in the coming years. One survey showed that renters are willing to pay around $200 more a month on eco-friendly apartments, because they are concerned about sustainability. This figure will likely grow as more people express an interest in protecting the planet.
Green investment is a smart one because it opens up the possibility of government incentives. The actual cost of your investment comes down even if the initial cost is higher than traditional properties. You get tax credits every year, which justifies the extra you pay upfront. Things got even better for American investors with the recent Solar ITC Extension, which expands the Solar ITC at a 30% rate until 2032. The tax credit aims to encourage developers and investors for developing solar and renewable energy-producing real estate properties. The significant credit makes the investment an excellent opportunity to save while you spend.
Excellent profit potential
The benefits of a green building project extend beyond the ownership and life-cycle performance. There is much more for investors in the long run. You have a chance to unlock excellent profit potential from a green building down the line when you put it up for sale. The eco-friendly credentials of such properties become their major USP to entice a buyer. You can sell fast and command a high value because buyers see sustainability and energy efficiency as valuable features in a home. The Return on Investment (ROI) for such projects is more, whether you want to retain it for rentals or sell it eventually.
Being money savvy is a valid reason to invest in green projects, but a sustainable mindset is an even better one. Investing in them enables you to do your bit for the environment with an eco-friendly home. You even end up spreading the word by introducing your tenants to the concept of sustainability if they already do not know about it. Consider it a way to boost the eco-friendliness bandwagon besides growing your investment in the long run.