Environmental Management for Investment Properties – 4 Strategies to Consider

Responsible investment is a popular trend that property investors are getting on board with, that can reduce costs and provide a financial return for the initial investment.

Whether your real estate portfolios are comprised of commercial real estate or other real estate assets, such as residential tenancies, it is becoming increasingly important to maintain sustainable buildings that meet regulatory requirements.

While this sounds potentially costly, it can be one of the best things you do for your property investment, even improving the financial return of your asset. Sustainable properties are treasured by the real estate industry and valued greatly by investors and homeowners alike.

Here we will show you why it’s important, some of the benefits of environmental management, and 4 ways you can improve yours today.

Why is Environmental Management Important for Investment Properties?

In global terms, we face environmental challenges like never before that will affect future generations, but we are already feeling the effects of extreme weather as a result of climate change. The climate risk cannot be ignored, but while it is in our best interests to limit greenhouse gas emissions and use green construction materials, it doesn’t mean we have to ruin our back pocket to do so.

In fact, the opposite can happen.

While the environmental benefits of responsible energy consumption and a smaller carbon footprint cannot be overstated, improving your real estate investment’s sustainability performance can actually improve your bottom line.

By improving energy performance and investing in strategies to provide sustainable real estate, there are real cost savings that can benefit your investment to take advantage of, not to mention the rise in property values that can come from investing the sustainable way.

Benefits of environmental management of investment property

There are several benefits to the environmental management of investment properties. Property investment is more than just the land it’s on or the aesthetic of the building.

• Sustainable investing means a higher return on the resources used by your tenants. Solar panels, for instance, can take pressure off the mains grid and reduce power bills, freeing up tenant cash flow.
• Benefits to investors include achieving a greater value on your property by increasing its ESG rating, which includes environmental, social and corporate governance. This makes it more attractive for potential buyers while maintaining traditional financial metrics.
• The physical risk of climate change is never far from people’s minds, and attracting environmentally minded tenants becomes easier when providing green buildings.
• Aside from corporate social responsibility, adhering to regulatory requirements and ESG performance means supporting various sectors that are involved in sustainable investing. With greater investment, green technologies inevitably become cheaper and more efficient.

Ways to improve your investment property’s environmental efficiency

Real estate investors can improve their property’s environmental impact in several ways. The investment decisions you make today, in terms of mitigating waste production and energy consumption, can pay absolute dividends tomorrow. ESG considerations should never be far from mind when improving the efficiency of your property.

Energy Efficiency Measures

Energy and environmental design go hand in hand. Solar panels, for example, are an effective way to reduce the electrical energy usage of your property. Depending on the building design and location, solar panels can capture much of the sun’s energy throughout the day, storing it in a battery to be used later.

Proper insulation can also keep homes cool in summer and warm in winter, reducing energy consumption and driving down internal heating and air conditioning costs. Choosing the latest and most efficient appliances, from fridges to hot water systems, can also significantly impact your property’s energy usage.

This reduces tenants’ overheads and living costs, making a green rental premium for the real estate market.

Water Conservation Strategies

Conserving water is one of the biggest measures that real estate investors can take to ensure their asset class remains responsible and sustainable. Water conservation strategies include proper water-saving fittings for taps and showerheads, maintenance on pipes and water systems, and tanks for rainwater storage to supplement the mains service.

As with electrical efficiency, this reduces the overall costs of maintaining a property, improving the bottom line for real estate owners and managers. Cost management and improving the efficiency of waste management and water consumption systems make for more attractive and affordable housing, raising the value of the real estate investment.

Green Landscaping for Outdoor Spaces

Green landscaping can tie into tenant engagement as affordable housing that combines measures to fight climate change, enhance resilience in the landscape and improve ESG ratings. Green landscaping looks especially attractive to buyers and investors alike, providing a green space at a time when blocks are getting smaller and apartment living is on the rise.

Incorporating green landscaping into your environmental management decision making, can raise the value of your real estate investment. One strategy is to populate gardens with native species that are drought resistant, creating a beautiful green space while reducing the need for water usage.

Compliance with Environmental Regulations

Like many developed countries, Australia has several environmental regulations to which new constructions must adhere. These typically come from state governments, regulating everything from water tanks on new houses to the size of solar panels and the batteries required to store the power.

Checking with your local authorities to determine whether your property is in compliance with environmental regulations reduces the chance of problems later on. It also reduces any chance of physical risk to any tenants or occupiers by creating a self and healthy environment to live in.

The Green Building Council of Australia has several recommendations to keep your property and, by extension, the local community sustainable and environmentally efficient. This includes the triple standard of it being positive (energy efficient and powered by renewables), healthy (ventilated with good indoor air quality), and resilient (efficient water usage and adapted for climate change).

Get expert help making your next Granny Flat investment environmentally friendly

Talk to the team at Granny Flat Solutions today to find out how you can optimise your property to get a great return on efficient, green and environmentally friendly practices. While they’re good for the earth, they’re also good for your back pocket as a real estate investor.

Our friendly staff can advise you on everything from the real estate industry to waste management, making your investment property one that will pay dividends for years to come.