Environmental investments in real estate: how Green invest can make portfolio sustainable
In today's world, the real estate industry is witnessing a shift towards eco-consciousness. As our world faces growing environmental challenges, the demand for green real estate investment has skyrocketed. Find out more about what green or sustainable real estate is, what are the benefits of investing, the disadvantages and risks, and how to make your property more environmentally friendly
Every year, the world is becoming more and more responsible for the human impact on the environment. That is why ecological buildings and green buildings are gaining wide popularity.
Investing in green real estate can be a great way to make a significant contribution to the environment while also increasing your financial security through diversification. This market is recognized as one of the most promising, it is predicted that by 2030 the value of the green real estate market will be more than 770 billion dollars.
What is ecological real estate? What are its advantages and challenges for investors? How to start investing in this rapidly growing market? We tell in our material.
What is ecological or stable real estate?
Environmental real estate refers to objects that are designed, built and operated in such a way as to minimize their impact on the environment. That is, energy efficiency, water conservation, waste reduction and the use of renewable resources are preferred here.
Environmentally friendly materials and technologies are used during construction. Properties are also typically equipped with solar panels and rainwater harvesting systems that reduce reliance on non-renewable sources.
Advantages of investing in ecological real estate
Investing in green real estate has numerous advantages that make it an attractive option for investors:
- High demand for rent – the investor is unlikely to have to worry about a lack of tenants as sustainable living becomes a priority for tenants. In fact, people are willing to shell out more money for such homes as they can save on energy bills in the long run. In addition, residents enjoy a better standard of living due to improved air quality, more natural light and optimal insulation in such living spaces. Renters have good reasons to stay longer, even if they have to pay more.
According to experts, the demand for ecological rent will continue to grow in the coming years. One survey found that renters are willing to pay about $200 a month more for eco-friendly apartments because they are concerned about the environment.
- Government incentives – green investments are smart because they open up the possibility of government incentives. In particular, tax credits are aimed at encouraging developers and investors to develop real estate that produces solar and renewable energy.
- Low operating costs, which green buildings usually have, due to their energy-efficient characteristics. This means higher returns for investors.
- A sense of social responsibility, promoting ethical practices while providing economic returns. This enables investors to do good while doing good financially.
Disadvantages and risks of investing in ecological real estate
Although the benefits of investing in sustainable construction are great, there are certain risks and challenges to consider:
- Higher initial investments, because the construction of green buildings or the modernization of old buildings to make them more ecological is a rather expensive process.
- The limited availability of environmentally friendly construction materials and technologies, which can be observed in certain regions, complicates the procedure of building the object.
- Absence of standardized certification and regulatory acts regarding ecological real estate.
- Less information about the prospects of the market due to its newness. Some investors may consider environmental projects to be more risky because of the novelty of the technology or uncertainty about the potential return on investment.
Useful expert advice
Anton Taranenko is the founder and CEO of Visit Ukraine and Visit World online platforms and the owner of the international development company AntaGroup:
Green real estate investments, especially those that utilize green technologies, can have an impact on the sustainability and value of your portfolio. Here are some ways that green technology can improve your environmental and financial impact:
- Using energy-efficient technologies such as LED lighting, solar panels, thermal insulation, and energy-efficient heating/cooling systems can help reduce utility costs. This not only reduces the environmental impact, but also saves money.
- Deploying solar panels or wind generators can make your property less dependent on traditional energy sources, helping to conserve resources and reduce CO2 emissions.
- The use of automation and energy management systems allows you to optimize the use of electricity in the building, adjusting it to real needs and ensuring efficient use of resources.
- Obtaining certificates confirming that buildings comply with green standards (LEED, BREEAM, etc.) not only demonstrates environmental suitability, but can also increase the value of real estate.
- Green real estate can attract tenants who value environmental awareness. This can have a positive impact on rental income stability and long-term tenant retention.
- Given the growing interest in green residential real estate, its value may increase over time.
These elements interact to make your portfolio environmentally and financially sustainable. Green technologies in real estate are becoming not only a way to save money, but also a tool for creating living environments that promote environmental sustainability and conservation of natural resources.
How to invest in ecological real estate?
Investors who are interested in investing in green real estate need to take some important steps before starting their own journey:
1. Be sure to do your research and learn the basics of green real estate – understand green building practices, green development, and energy efficiency.
2. Consider working with an experienced real estate agent or investment advisor who has experience working with this type of real estate. They can help identify opportunities that fit your financial goals.
3. Evaluate the potential of an ecological investment, necessarily taking into account the energy efficiency rating or LEED certificates. Also, consider factors such as location and tenant or buyer demand for a sustainable property.
4. Consider your available financing, including your mortgage options.
5. Stay up-to-date on major industry trends and best practices to successfully enter the world of sustainable real estate investing while also making a positive impact on the environment.
How to make your real estate more ecological?
In addition to purchasing a purpose-built green property, there are several steps you can take to make your existing property greener:
1. Reduces electricity consumption – installing LED lights and motion sensors can save energy and reduce costs.
2. Conserve water – There are many ways to conserve water, from low-flow plumbing to drought-tolerant landscaping.
3. Use energy-saving electrical outlets - an easy way to reduce unnecessary energy consumption.
Examples of objects for successful investment
Large international developers are increasingly adhering to the principles of environmental sustainability in their work. In particular, special materials and technologies are used.
When choosing an object for investment, we advise you to pay attention to the following proposals from the developer ANTA Group, because natural and high-quality building materials are used in construction, such as marble, granite, monolithic brick, energy-saving glass, which creates conditions for the environmental friendliness of this housing:
- ANTA Residence Canggu is a 5* hotel complex with a unique infrastructure, located in one of the most popular areas of Bali (Indonesia) - Canggu, 7 minutes from the ocean. This is a complex of premium apartments, in which everything is thought out to the smallest detail for a perfect vacation. According to forecasts, the amount of net profit from the sale of apartments purchased in Bali during the construction phase will be 44% in three years. When renting real estate, you can return the investment in 5-6 years.
Read here why the Turkish real estate market is an attractive place for investment.
Green real estate is an investment opportunity that offers numerous benefits for both investors and the environment. This type of investment will allow you to diversify your portfolio, as well as guarantee a stable profit.
If you are interested in starting a sustainable property investment, it is important to research local regulations, building certificates, financing options and market trends. Consulting with a professional advisor can also help you make informed decisions about your investments.
Daria Rogova, Head of Insurance at Visit World
To move, travel or work safely in a new country, you will need health insurance. You can apply for an extended policy on our website here.
Products from Visit World for a comfortable trip:
Travel guide for 200 countries;
Legal advice from a local specialist on visa and migration issues;
Travel insurance around the world (please select the country of interest and citizenship to receive services);
Medical insurance all over the world.
In today's world, it is difficult to overestimate the role of investments in achieving success and financial stability. Whether you have a dream of starting your own business, expanding an existing company, or improving your personal skills, investments can be a key factor in your journey to achieve your goals. Learn more about how investments work, their benefits and strategies
17 Dec. 2023More details
Investing can be a daunting task, especially for beginners. With so many options available, it can be difficult to know where to start or what to invest in. However, making smart investment decisions is crucial in the beginning. Learn more about what smart investing is, how to become a smart investor, and the best investment options for beginners
15 Dec. 2023More details
Today, the world celebrates International Migrants Day. In 2022-2023, the level of migration in European countries reached peak levels. Find out more about how many foreigners currently live in the EU and what changes were made to migration legislation by states in 2023
18 Dec. 2023More details
Commercial real estate has long been a popular investment destination for both individuals and businesses. Find out more about the benefits of this type of investment, the disadvantages and risks, the key success factors for investing in commercial real estate, and how to get started on the path to investing in commercial real estate
19 Dec. 2023More details