Q. “I’m keen to invest in an energy-efficient property, but I’ve noticed that they’re more expensive. Is it possible to make a profit from this type of property?”
A. I am continually being told at conferences, in general discussions or in my client meetings that any sort of sustainably designed building is inherently more expensive to build. My response is always the same: no, it isn’t.
A well-designed sustainable building can be significantly cheaper to build – and all sustainable buildings including homes and apartments are cheaper to operate. Sustainability is about improving efficiencies across all aspects of the built environment.
Over 85% of our homes are inappropriately designed for the climate in which they are located. I call it the ‘igloo in Cairns’ syndrome because of the totally irrelevant and uncomfortable designs.
We build and refurbish properties to be comfortable, but unfortunately we don’t do it very well – that’s why they need air-conditioning and lights on during the day. Understanding your local climate is vital. Using the energy of the sun, wind, rain, earth, water or flora and combining them with well-thought-out, sustainable design, build and operating strategies is key. It improves comfort and environmental loads significantly without expending massive amounts in capital equipment and ongoing running costs.
According to the American Society of Heating, Refrigerating and Air-Conditioning Engineers: “Simply facing a building in the correct direction can reduce running costs by 30%.” You can’t get much cheaper than that!
The shift in sentiment towards climate change means you may get left behind if you don’t build sustainably.
Improved comfort, reduced capital and running costs, reduced greenhouse gas emissions, improved occupant health, reduced risk, improved marketing ability, increased building longevity, reduced maintenance… The list of benefits goes on.
I become concerned when I meet clients who have new projects on the board with no sustainability features in the design. I then ask them about risk. How are they managing the risk they are exposed to by not designing sustainable facilities? Developers will argue that it doesn’t matter to them as they do not have to pay the running costs. But they are still exposed to risk.
I believe that smart developers or purchasers will see that they are maximising their point of difference if they design, build or buy a sustainable apartment or home.
In two years time, who is going to want to purchase a non-sustainable home or apartment? Who will want to send their loved ones to an unsustainable aged-care centre or school? Who will want to stay in a non-sustainable hotel or hospital?
Power and water bills are rising rapidly. Carbon credits, greenhouse gas taxes, water trading, sick building syndrome, authority legislation requirements, improved occupant comfort – purchasers, authorities and operators will demand these issues are resolved in their buildings.
Smart developers or purchasers do everything they can in order to minimise risk. Yet how much risk will developers or purchasers be exposed to if they don’t immediately embrace sustainability as a driving and integrated design outcome?
In this new climate-conscious environment, can you afford not to understand and mitigate that risk? If you do nothing and keep designing, building or purchasing uncomfortable, unsustainable buildings, it is very likely that your investments will become irrelevant as well as being exposed to major risk.
The experts
Margaret Lomas is the founder of Destiny Financial Solutions and is a qualified financial advisor and the author of five best-selling property investment books. In 2006, she was Telstra NSW Businesswoman of the Year. Visit: www.destiny.net.au
John Brodie is the founder of Vim Sustainability, which provides architects, developers and owners with cost-effective strategies to improve sustainability in the built environment. Visit: www.vim.net.au
Chris Rolls is the managing director of Rental Express, Brisbane’s largest specialist property management company with nearly $1bn worth of property under management on behalfof investors. Visit: www.rentalexpress.com.au