Michael from Washington DC

[Michael Purcell]

I am an architect and I have one property - I want to build a rental property portfolio creating a sustainable  (green) market place to help lower energy costs. This will be the basis for my ongoing income when I slow down (What is retirement, anyway). I am not quite sure how to start, so some help would appreciated.

[Pete Schwan]

Dear Michael, Welcome to BiggerPockets and I too wish to build a portfolio of sustainable, net-zero income property. Don't be dissuaded by Russel's comment, as that is not the case in reality. Any time I see someone say "I always..." it makes me wonder about their judgement. However, I agree that in some, more affluent neighborhoods, like those in the Beltway, solar may be considered ugly and negatively impact property resale value. But I wonder which will be worse for property values, having solar panels or having the house under water when the sea levels rise.

Yet, the cost of electricity continues to rise and for most Americans, saving 30% on their monthly electric bill makes a difference. If you own income property I'm hard pressed to figure out why not go solar/sustainable. Here is an example: An average 2 family house in a normal neighborhood, that gets average sun has one common electric meter on site. This meter is in the landlord's name. The landlord's uses the same utility company at his personal residence. The landlord gets solar panels installed AT NO COST and hooked up to his common meter, which has a very nominal bill. He is now buying clean energy at a lower, fixed rate. Furthermore, all the excess power put back on to the grid is accumulated in the landlord's utility account. Every month he is able to transfer all the excess credits to his private residence nearly eliminating is own monthly electric bill. 

There is one catch...In order to go solar the landlord is required have WiFi at the rental property, so he sets it up determining that it will more than pay for it self. He is now able to market his property as an energy efficient rental with free WiFi on site (which he adds an additional $50/month for the rent). Which rental property do you think a millennial would rather rent; the environmentally friendly landlord with free WiFi, or the other one?

And when you finally sell your cash flowing real estate to a younger person who is more concerned with the planet you'll have a competitive edge in the market place. Here in the Boston Market, perhaps because of cultural differences, homes that are energy efficient, including solar, are selling for about $7000 more, all things being equal. I guess people like lower bills, fixed rates, and helping the planet up here.

Please forge ahead with your goal and believe in a better, brighter future.

~Pete