March 30, 2012

Hatteras Island Real Estate:  Going green in our homes


In January, my wife, Louise, and I had the privilege of being among the first real estate brokers on the Outer Banks to receive  the National Association of Realtors (NAR) Green professional designation. The three-day training program was designed to prepare us to counsel clients and homeowners about ways to address issues associated with energy efficiency and smart building practices.

The central theme of NAR’s green initiative is a concept known as “sustainability.” In its simplest form, sustainability refers to an effort to manage scarce and declining resources in ways that meet present needs without compromising the ability of future generations to meet their needs.

Whenever we start talking about green practices, there is a spectrum of preconceptions that has to be overcome before getting to the underlying value propositions. These red herrings range from the “tree-hugger” label associated with environmental activism to the very prevalent phenomenon known as “greenwashing” where claims are made about products that lack a verifiable positive effect on the environment. Once we get past these initial obstacles, there really are some actions that can, under the right circumstances, produce meaningful results.

Examples of resources on which each of us can have a relevant influence include energy, water, and air quality. Some of the potential benefits of incorporating available green technology and behavior patterns into our homes and daily activities include lower utility expenses, reduced water and electric consumption, more efficient energy usage, and possible tax advantages.

During the classroom instruction, we were introduced to an interesting variety of products and services. Those that caught our attention and that seemed to have the most applicability in our local vacation home environment included: geothermal heating and cooling systems, simple retrofits for reducing energy loss in attic spaces and gaps in a home’s HVAC ducts, solar heating for at least a portion of a property’s energy needs, home energy audits, and even a new form of insulation made from recycled blue jeans. As you can see, a large portion of the course focused on energy efficiency and evaluating a home’s energy performance.

Let’s take a look at just a few ideas that may save you some money while contributing to good resource management.

If you are planning to build a new home or to upgrade your HVAC system, you may want to look into a geo-thermal system as an alternative to traditional heat pumps. A geo-thermal system uses a series of deep wells connected by pipes that takes advantage of the constant temperature of the earth to heat and cool the home.

While initially appearing to be much more expensive than a heat pump system, a geo-thermal system requires very little maintenance, eliminates the recurring cost of replacing heat pumps, and cuts the cost of electricity.  In addition, tax credits may be available in conjunction with the installation of a geo-thermal system. When combining these benefits, it is not uncommon to have the numbers show that over time it may actually be less expensive to put in a geo-thermal system than a heat pump system.

If your rental cottage has a private swimming pool, you may want to consider the installation of solar heating.  The initial cost of installing solar panels is in the $3,500 range. While solar heating may not get the temperature of the pool quite as high as propane heat, and it may not heat the water up as quickly, the advantages can be substantial.   For starters, there is an advertising advantage in being able to state that you are offering a heated pool. This could translate into additional rental income. With solar heat, the weekly cost will be lower to rental guests, thereby making the home more attractive from a rental rate standpoint, and maintenance costs to the owner should also be lower.

How about energy efficient light bulbs?  Here, we are talking about LED, not the CFL light bulbs that have a short time lag between flipping the switch and the light coming on. At the outset LED bulbs maybe more expensive, but they have extremely long life spans.  Think about the cost savings relative to the expense of having rental company maintenance personnel come out to your cottage on multiple occasions to replace light bulbs in high locations that require a ladder and possibly two people for safety purposes.

The icing on the cake associated with going green is that there may be federal and state tax credits for your energy efficient projects.  A tax credit is basically an incentive from the federal and state governments to implement energy saving initiatives. We all need to conserve energy, and the government is sweetening the pot to encourage us to move in that direction. These tax credits, when combined, can be as high as 65 percent.  

The rules associated with tax credits can be complex; they may vary by taxpayer. There are some annual limitations, and they are not always written as clearly as we might like. So, be certain to consult with your tax accountant or attorney as part of the planning process for any energy-related project that you are considering.

It is also my understanding that some banks may finance projects that promote energy efficiency either on a stand-alone basis or as part of a refinance.  If you can roll the cost of the improvement that you are considering into a loan, then it really makes sense.

For example, if your energy saving implementation costs end up adding $100 to your monthly loan expense, but you are saving $200 per month in energy costs, then you are actually putting an extra $100 per month into your pocket!

When all is said and done, some of the strongest impressions that I took away from the class included the following:

  • An energy assessment is probably a good first step for most homeowners because it will provide a baseline evaluation of your home and suggest fixes for improving energy efficiency. Testing determines where and how energy is being lost, what systems are operating inefficiently, and what cost-effective improvements can be implemented to improve comfort, durability and efficiency.
  • Before making green improvements on a home, do some research, and try to get an idea of the actual cost vs. benefit. The adoption of energy saving technology without a corresponding change in consumption behavior may limit the expected benefits. For example, a tankless water heater may sound like a good idea for saving electricity, but if people are taking half-hour showers, the payback might not be what you anticipated.
  • At the same time, don’t focus only on the cost/benefit aspects of an improvement.  There are actions which each of us may want to take simply because they are good things to do relative to the preservation of resources and the quality of life for future generations to enjoy.

An excellent place to start your investigation of green concepts for real estate is  Click on the Green Resources tab, and you will find a wealth of introductory articles and reference links.

The application of green technology, products, and services relative to real estate is a rapidly emerging, constantly evolving field of study and research. Take a look at the options that may have the most relevance for your primary residence and for your vacation cottage, and decide upon those that present the best opportunities for your personal circumstances. Then, go green!

(Tom Hranicka is an associate broker with Outer Beaches Realty. Questions, comments, or suggestions for future articles may be sent to Tom Hranicka at P.O. Box 237, Avon, NC  27915, or e-mail to [email protected] )
Copyright 2012 Tom & Louise Hranicka.  All rights reserved.

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