Sponsored by Freddie Mac
Going green isn’t just for new construction and shiny class-A buildings anymore. From coast to coast, the nation’s rental housing stock is rapidly aging. As more multifamily property investors step forward to rehab these properties, they are making “green” upgrades a priority on their renovation punch list. The driving factor isn’t just environmental concern—it’s financial.
So, if you’re wondering if going green is worth it, here are a few factors to consider:
Renters Are Seeing Green
Renters are feeling the economic squeeze and are looking for ways to contain or lower living expenses, especially utility costs. In fact, renters are more concerned about potential increases in their utility bills than rent or other essentials, per a recent Harris Poll commissioned by Freddie Mac Multifamily.
The same survey also found that nearly eight out of 10 renters prefer to rent an environmentally friendly home, and nearly half are willing to pay more rent for it. This means that water and energy efficient features have financial value to both renters and property owners.
Simple Fixes Can Offer Big Returns
Going green doesn’t require a massive overhaul or significant investment. Simple and practical fixes make a cumulative difference and can add up to big returns that benefit property owners, tenants, and the community’s water and energy resources.
Take this example: A 430-unit 1990’s vintage Texas apartment complex got a $1.1 million return in 10 years with just a few simple green upgrades—water-saving showerheads, toilets and faucet aerators. At a cost of only $500 per unit, the owner achieved full ROI in just two years.
While every property has different needs, the bottom line is that reducing energy and water use doesn’t have to be complicated or expensive if you stick to practical, cost-effective changes.
Property Financing Discounts Sweeten the Deal
Finally, there are loan discounts available tied to green property upgrades. These are especially valuable for borrowers who are purchasing or refinancing a multifamily property and are planning to make improvements. However, even if you’re not planning rehabbing a property, it’s worth taking a look at the options.
Freddie Mac Multifamily’s Green Advantage® is an easy place to start your search. The program helps eliminate the guesswork by giving borrowers two loan quotes—one regular and one green—and can provide borrowers with a green property assessment that lists suggested, simple improvements. It makes it easy for borrowers to instantly weigh their options and determine if they want to make recommended improvements. Plus, the program allows for two full years to complete the updates.
For more information on green multifamily financing, visit www.freddiemac.com/greenadvantage.