How an Eco-friendly Home can Boost ROI When Selling?

Greening your home isn’t only beneficial for the environment and reducing energy costs, if you are thinking of selling it in the future, environmental upgrades can also help your ROI. Some green home improvements have a better ROI than others (think solar panels), and doing your research before your start any project can help you get the most bang for your buck. We’ve outlined a few of the best options that you might want to consider when determining the ROI of eco-friendly homes:

1. Tankless water heater

One of the easiest and least expensive upgrades you can make to take your home in an eco-friendly direction is buying a new water heater, especially if it hasn’t been changed in the last decade. Water heating is responsible for 16% of a typical home’s energy costs and swapping out an old, inefficient water heater, for a tankless version could cost a couple thousand dollars, and will save you money every month. It will also be an attractive selling point for your home.

2. Upgraded windows

If your home has drafty windows, they are the next feature that you want to turn to for an energy-efficient upgrade. The cost of windows will depend on the size of your home and the quality that you go for, but there is no doubt that this is likely worth your investment.

The Department of Energy says heat gain and loss through older windows is responsible for 25 to 30% of energy usage for heating and cooling. According to Consumer Reports, Energy Star-certified windows can lower your home’s energy bills by up to 15%, and that translates to attractive savings for a potential buyer.

3. Solar panels

Solar panels can save you money, but not right away, so they may not have the best ROI if you are planning to sell soon. That’s because installing solar panels have major upfront costs. The good news is that homes with solar energy systems typically garner higher selling prices than homes with other types of systems.

One study found that homebuyers were willing to pay a premium of $15,000, and, according to the U.S. Department of Energy, homes that feature solar panels may also sell faster than homes that derive their energy from fossil fuels.

However, determining the ROI of installing solar is complicated. According to Energy Informative, a five-kilowatt system — the average size of a system in the United States — can cost around $20,000. But the exact size of the system you’ll need will depend on how big your home is and how much power it uses.

Another consideration is your home’s location, as there may be state rebates (such as in California, Arizona, and Colorado), in addition to federal tax credits. Evaluate the number of years that you intend to stay in your home, and compare the average monthly savings of using solar with how much of the system you’ll have paid off by your projected moving day.

With one or more of these strategies in mind, you will be well on your way to greening your home to make it more attractive to potential buyers.

Green Home Improvements to Attract Homebuyers

People’s desire to make a smaller footprint on a vulnerable planet affects the real estate market worldwide. In part this is due to the Internet’s power to inform and inspire, and it is partly due to who is buying the most homes. Millennials have made up more than half of homebuyers over the last few years. And millennials, surveys have shown, are willing to pay more for sustainability and the greenest possible living.

They often opt for new construction with the highest eco-friendly standards, but not every buyer will purchase a new home. Some millennials are not ready to make that financial commitment, and some will not be buying in trending locations that have lots of new green construction. So to attract buyers to an existing home, green home improvements can be a big win. Not only will the homeowner be doing the right thing by the planet, but also homes can sell faster and for more.

Although making green changes to an existing home can be complicated and expensive, there are many levels of improvement that vary in cost and difficulty.

What Meets the Eye

Green upgrades the buyer can see in an existing home make a difference. If you are upgrading, you can go more sustainable and energy-efficient in these areas:

  • Non-toxic paint: The volatile organic compounds (VOC) in some paint can damage air quality and lungs. Choose a low-VOC paint to get that fresh, neutral look buyers want.
  • Sustainable flooring: Replace worn-out floors with highly renewable bamboo, with responsibly grown and harvested hardwoods, or with natural linoleum products.
  • A cool roof: Renovate the roof with light-colored materials that reflect heat.
  • Energy-efficient appliances: Update the kitchen with appliances, and even faucets, that run on less energy and/or use less water.
  • Native plants: Refresh the landscape with plants native to the environment, that will need less specialty care products and that will support local ecology.

Energize

Green changes that make a home energy-efficient will attract buyers and also give sellers the ROI of an eco-friendly home. Because they save money, these improvements also make money and bring return on investment.

  • Update to a Smart Thermostat: A programmable thermostat ensures heating and cooling meet your needs without waste.
  • New windows: The U.S. Department of Energy reports that 25-30% of energy costs literally get sucked right out of old windows, where leaks in both directions waste resources and money. New windows also beautify a home.
  • Weather protection: If new windows are not an option, caulking and weather-stripping are also efficient.
  • Tankless water heater: Upgrade an old water heater that needs to go anyway with a tankless one, that heats water as needed. Why waste energy heating gallons of water all the time?
  • Recycled water: Systems for catching rainwater, or holding water from sinks and tubs (greywater) can save waste and money. This water can flush toilets and water gardens, among other uses.
  • Renewable energy sources: Depending on the climate, solar panels and/or wind turbines can provide energy in place of using other, non-renewing resources.

Before making green improvements, research is the seller’s best tool. Understand the options, costs, and benefits. An experienced real estate agent can advise on what green improvements are most wanted and bring the best ROI in the local market. Also make sure the home is appraised by someone experienced with green features, to make sure their real value is represented in the appraisal.