How to invest in the eco property market

DATE: Apr, 13   COMMENTS: 0   AUTHOR: Allan Azarola

If you’re keen to help create a more eco-friendly world, one of the best ways you can do so is to put some money into supporting green ventures. By investing, you can support the expansion of the eco property market and make money at the same time. It’s a burgeoning sector and there are lots of opportunities available. The question is, how do you pick the right investments?

What is an eco property?

There are many different ideas about what it takes to make a property eco-friendly, and there is no single standard that classifies properties in that way, indeed, there are several forms of certification existing for residential properties that can increase their value by an average of 3%. Another element is public perception. In the eyes of the public, the single most important factor in an eco-friendly house is fuel efficiency. Fuel generation capacity (e.g. through solar panels) is a big plus, as is the use of sustainable supplies in everything from the building materials to fixtures and fittings, like carpets and lightbulbs. A kitchen equipped with eco-friendly devices will often seal the deal.

Conversions and restoration

Because the process of building is itself disruptive to the environment, older buildings that have been converted or restored to meet green standards have a lot of appeal to buyers. They help the environmental cause twice over, by creating new green properties and removing environmentally damaging ones from use. Conversion and restoration work tends to require a large upfront investment, especially if the property is in poor repair or requires substantial remodelling, and the element of risk attached can deter traditional lenders. Because of that, such projects tend to appeal to a specialist type of investor who is prepared to take on the associated burden of research. Once a project is complete, however, the profit margin is generally high.

New builds

Some people regard new builds as inherently environmentally unfriendly, but that doesn’t need to be the case. There are plenty of brownfield sites available and such projects can also contribute to urban renewal in a way that advances green values. For investors, part of the attraction is that they increase the degree of control that’s possible. Not having to work around an existing structure makes it easier to create a design with green standards at its heart so that, for instance, the arrangement of rooms and windows maximises heat retention. You can invest in developing a project like this by yourself or part-fund a company taking on a large-scale project such as a block of flats or a complete housing estate. That will depend on the level of capital you have available, how much control you want and how much you feel you can benefit from partnering with individuals who already have experience in the field.

Residential and commercial properties

When exploring investment opportunities in the field of green properties, it’s worth remembering that businesses as well as private citizens are interested in using such buildings. Although there is at present no clear way to identify green commercial properties, being able to demonstrate that a property has features like double (or triple) glazing or it has been built using sustainable timber can still be a big asset. Using green premises helps businesses to promote their own green credentials, so there is significant demand for buildings like this.

Package deals

If you’re a newcomer to investment and you don’t yet feel ready to start buying whole properties, the simple way to invest in the eco property marketplace is to find package deals made up of several different stock options in the sector. These are increasingly becoming available and a good package will have the advantage of balance, making it easier for you to spread your assets and reduce risk even if you have a limited amount of starting capital.

A success story

One man who has done very well out of investing in eco-property is Ali Seytanpir, who puts his success down to a continual process of learning and research. A member of the British Property Federation, the Property Development Alliance and the National Landlords Association, he has worked both with properties and with land for property development.

As with any sector, eco-property requires patient research if you’re going to do well, but because it’s an expanding sector, putting in the work now means you’ll have a significant advantage as it grows. If you’re willing to keep on learning and adapting to the changing marketplace, you could be well placed to develop your own property stable – and help to protect the environment as you do so.

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