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Unlocking Real-Estate Value by Going Green


What’s the most valuable improvement you can make to your home to maximize return on your investment? If you’re like most Americans, you probably think a big renovation, like a kitchen or a bathroom remodel, is the best way to go. After all, the more you put in, the more you get out, right?

Not necessarily. As it turns out, many of the most profitable repairs are simpler, cheaper, and more environmentally-friendly. Energy-efficiency projects topped Remodeling Magazine’s 2016 cost versus value report, representing a growing trend amongst buyers.

Studies show that high-performance, green homes sell for a mean 3.46 percent higher than their traditional counterparts. That’s good news whether you are hoping to put your property on the market soon or are just looking to increase your home’s value. In fact, there are a few green projects that may even net almost 100 percent of their costs, and demand for these features is only set to grow. What follows are some of the most lucrative options that will get you the highest ROI while boosting a home’s green cred.

Improve Your Attic’s Insulation

For every dollar you lower your energy bills, you get back 15 to 20 dollars in resale value, according to The Boston Globe. Installing or upgrading the fiberglass insulation in your attic is one of the few home projects that will actually net you over 100 percent of your investment—for every 100 dollars you spend, there’s an estimated $116.90 return.

The efficiency and the type of the insulation counts here, though. You’ll see much higher performance if you opt for blown loose fiberglass rather than batt insulation. When you think about it, it makes sense—attics are full of odd corners that can be hard to cover using cut batt.

Additionally, in order to reap the maximum value of this improvement, it needs to be blown in at an R-value of 30.

Replace Windows with Low-Emissivity Glass

Is your money going out the window—literally? Leaky, inefficient windows account for huge amounts of wasted dollars on energy spending; in fact, the Department of Energy estimates that homeowners can save up to $465 a year by upgrading to high-performance models. They also rank high in ROI—not only do they increase overall energy savings, window replacements also boost curb appeal, adding up to a 100 percent return, in some areas.

Windows have come a long way in the last twenty or so years. Improvements in glazing and insulation make today’s products vastly superior to outdated, single-pane models. Energy-efficient window glass is designed to account for regional variations in climate, so the exact right model will depend on your area. However, low-emissivity—low-e coatings—on the glass can reduce energy expenses no matter where you live. These coatings are designed to reflect the interior temperature of your home, meaning they’re efficient on both hot and cold days.

Invest in Solar Power

At around $35,000, solar power represents a significant investment, but don’t let the high price tag fool you. Savings on electricity bills and governmental and utility incentives can definitely help mitigate the cost.

Meanwhile, early findings point to a high rate of return for solar-powered homes—one study performed by the National Bureau of Economic Research found that homeowners with PV systems recoup about 97 percent of net costs when they sell. By comparison, adding a manufactured stone veneer only generates a 92 percent return. Of course, it’s all about your location. Areas with more green-conscious residents or high average utility bills tend to return more favorable numbers.

Trends in the market also indicate that buyer demand will grow, as solar providers anticipate a 119 percent increase in installations in 2016. Eventually, solar power should move from a niche market into a conventional alternative to grid power, making the homes that have it highly desirable.

Get Your Home LEED Certified

Homes that can be marketed as green tend to fetch more on the market—some studies put the price bump as high as 35 percent. The US Green Building Council’s LEED Certification is one way to communicate to buyers that a home is sustainable and green, and while this standard has typically applied mostly to new commercial buildings, the council is currently adapting its ratings to include older residential properties as well.

The green label means a lot to buyers, as it rates your home’s energy efficiency and sustainability across multiple measurements. But it could also mean a lot of work, especially if you live in an older home. Start by having an energy management commissioning performed, which will give you an idea of the amount of work you have in store. The good news is, almost any energy efficiency improvement or sustainability feature that’s required will improve your home’s value, so even if you can’t get certified, you’ll be making a solid investment.

Guest Post by Erin Vaughan

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