With 80 million Gen Y-ers expected to flood the rental market over the next ten years, multifamily property owners will want to find new and innovative ways to attract environmentally-conscious renters. In a previous post at this blog, we highlighted surprising industry research indicating that 89% of tenants are willing to pay up to $50 more each month in rent in order to reap the benefits of energy efficiency housing.

While the numbers look enticing, many apartment owners are reluctant to spend money on energy efficient retrofits and new construction. Although the figures of actual savings are preliminary, an article in Apartment Finance Today found that a few specific strategies for implementing green investments are showing positive results.

Marketing

One of the best ways owners can increase attention to their apartments is to effectively market their green initiatives and resulting energy savings. A growing number of multifamily companies are using the energy efficient and green certifications earned by their properties as marketing tools to brand their communities as eco-friendly. For example, one owner is charging $40 more a month for their green-rated apartments that will save the tenant an average of $50 each month on electric and water bills. The occupancy rate at the energy efficient properties is significantly higher, so going green is obviously a win-win for owner and tenant.

Common Areas

Another way owners are saving money is through efficiency upgrades at common areas of the property. Lighting is a very effective upgrade that can reduce costs without sacrificing safety. An apartment complex with 150 retrofitted fixtures in common areas can begin to realize savings in as little as two months. A green building is simply less expensive to operate, and savings can be shared with tenants if desired.

Property Value

Probably the most significant financial benefit of green retrofits is the added value at time of sale. Achieving third-party certification for energy upgrades will especially increase the overall value, making the property more attractive to buyers. Green certifications are available through the EPA’s ENERGY STAR program, the NAHB Research Center’s National Green Building Standard, and the USGBC’s LEED program. Apartment owners should also note that the EPA is currently developing a scale that will be used to compare properties and give lenders the much sought-after metrics they want to see.

The bottom line is that green and energy efficient apartments are solidly in the future of multifamily development. Are you on board?