Greenrealestate: Green renos add up to healthy ROI

Green Real Estate March 11, 2011

Elden FreemanBy Elden Freeman
 
Household debt levels are breaking records in Canada and as real estate professionals, while it’s tempting to think buyer beware, we instead should consider ways to assist clients with their mounting financial obligations.

Eco-friendly home renovations might just be the answer. These upgrades serve a number of purposes. They help consumers enjoy more comfortable, healthy and attractive surroundings. But of equal importance, they also help realize a payback in terms of increasing resale value and savings on energy costs.

According to the Appraisal Institute of Canada, energy-efficient upgrades lead the pack among overall home renovations when it comes to adding value to the resale price of a home. A 2008 survey rated the type of heating system, heating system efficiency, windows and insulation among the top picks in terms of green upgrades that have a significant impact on the appraisal value of a house.

With a recovery rate of between 75 and 100 per cent, bathrooms and kitchens top the list as the home-reno superstars of ROI. Also, the longer you stay in the house, the greater the payback, especially if you’re investing in some of the more expensive energy-efficient technologies.

Let’s look at some eco-friendly renovations you can recommend to your clients:

Insulation: Upgrades here will save money on heating and cooling bills in addition to reducing the release of greenhouse gases into the environment. If the home is poorly insulated, it usually pays to upgrade starting with the attic, the most cost-effective place to add insulation.

Flooring: Considered a significant source of indoor pollutants and allergy irritants, carpets and rugs don’t have the cachet they once did. Today’s homeowners are choosing eco-conscious flooring such as reclaimed or sustainable wood plank flooring, bamboo flooring, cork flooring, modern linoleum and eco carpets such as 100 per cent wool or Berber.

Paint: Using paints and finishes with low or no VOC (volatile organic compounds) will help you breathe easier by reducing your indoor toxin quotient. VOCs are the solvents in paints that emit gases into your space.

Windows: Energy efficiency is the name of the game here. Besides lowering your heating and cooling costs, high-performance windows offer more comfort, lower sound transmission, let in more daylight and increase passive solar potential.

Heating: Once your home is properly insulated and air leaks are sealed up to prevent heat loss, the next best remedy is an efficient heating source. Solar, geothermal, wood and natural gas are efficient options, though some can be costly to install. Oil and electric heating are less favourable.

Major building supply stores offer green products and programs for the do-it-yourselfer such as the online eco-responsible renovation guide launched recently by RONA, or Home Depot’s recycling program for lights, batteries and paint.

In addition, depending on where you live, green renovations could net your clients rebates and grants. Advise them to check with their local municipality and provincial offices.

Canada Mortgage and Housing Corp. (CMHC) has added environmentally friendly features to the mortgage insurance it offers. If you use CMHC insured financing to renovate your home to make it more energy-efficient, a 10 per cent refund on the mortgage loan insurance premium may be available.

Remember, your clients also know that knowledge is power. Sharing your knowledge by recommending solutions to environmental shortcomings will earn you respect and loyalty. And that’s the kind of ROI you can build on.

Elden Freeman B.A., M.E.S, broker is the founder and executive director of the non-profit National Association of Green Agents and Brokers (NAGAB). 416-536-7325; elden@nagab.org. For more information about NAGAB and what it can do for your business, visit www.NAGAB.org .