5 Reasons Green Real Estate Investing Reduces the Tension Between Making Money & Making a Difference
Updated: Dec 18, 2020
Do You Want to Pursue Profit and Purpose?
Imagine yourself sitting on a board in a wetsuit off the jagged coast of Portugal or California. The grey cold waters of November gently rock you back and forth. Are your toes starting to go a little tingly numb as you patiently wait outside the line? Can you feel the push of water picking up momentum?
Do you want to experience the win-win of surfing the green wave?
It's time to go. Your patience has been rewarded by the markets.
Impact investments are investments made with the intention to generate positive, measurable social and environmental impact simultaneously with a financial return.
This is not philanthropy. This is not government spending.
"High Alpha" (beating a benchmark index) is the goal for these "for profit" companies and funds.
And the best part, it's already happening.
This article was designed to help investors who are not familiar with the impact investing market. My goal is to set interested investors on a path to investing in lucrative multi-family homes in targeted markets, so they can build great wealth, as well as quickly grow their sustainable real estate portfolio.
A myraid of impact investments are available across the spectrum of financial instruments, but we believe real estate is the easiest way to build REAL wealth.
Growth of Impact Investing
USD 715 billion
While some investors have been doing this for decades, 2020 saw huge cultural leaps in the mainstreaming of impact investing appetite and the opportunities available..
According to the Global Impact Investing Network (GIIN) the supply of capital allocated to impact investing is 715 billion. On June 11, 2020, the GIIN published the 2020 ANNUAL IMPACT INVESTOR SURVEY that estimated that over 1,720 organizations manage USD 715 billion in impact investing as of the end of 2019.
Problems with Impact Investing
Poor transparency & accountability leading to greenwashing!!
As a relatively newer financial concept with no exact definition, there is a bit of the "wild west" component where the rules and regulations are a bit "grey". Dubious claims of environmental or social benefits create a system of greenwashing that misleads investors trying to make positive impact.
Reliable measurements of environmental or social benefit can be tricky, not to mention beholden to the attitudes and opinions of the individual.
If a new startup hires people with disabilities to cook and sell fattening brownies in a food desert, is this positive social impact?
Providing dignity and income for disabled individuals - good.
Adding to the poor food choices leading to obesity in a food desert - bad.
What's the overall net impact, who makes the judgement call?
You do. If you want business to drive social and environmental integration, impact investing is probably for you. It's far from perfect, but the system is moving in the right direction for you to make money while making a difference.
However there is a lot of work still needed, including:
A robust pipeline of investable deals;
Better data on business and fund performance;
Expanded opportunities for exits and the return of capital;
Actionable research on impacts and outcomes; and
More products and easier “on ramps” for people to get started.
Impact investments have moved far beyond avoidance of destructive companies or projects. Impact investors want to see the positive gain for society or the environment.
Multifamily Green Real Estate
An investment you can touch that provides space for communities to flourish together.
Smart investors seek out measurable metrics to ensure profits. Investors can have more confidence that their dollars are invested in legitimate gains for the environment and society with this asset class. Multifamily real estate is known for being sustainable and profitable for more than a few reasons. Let’s find out what they are:
1. Tangible, Real Asset You Can Measure: For starters, green real estate improvements in water or energy conservation are simple and easy to measure. There is no chance of greenwashing on these projects.
2. Recession Proof: Population Continues to Grow: When you have a steady population growth, that means the need for rental properties is also steady, as well as in high demand. Unlike other asset classes, multifamily green real estate is sustainable economically because people will always need a place to live!
3. Reduced Carbon Footprint: Sustainable urban planning and land use not only saves energy of the actual household, but also the carbon load of transportation. Multifamily living supports this lifestyle, even more than a "green" suburban single family house. Add a layer of sustainablity to urban multifamily and you've got massive wins for the environment with less energy use and transportation carbon load.
4. Tax Advantages of Real Estate: You will be happy to know that you can deduct depreciation of the multifamily property against your income, roll over your 401K into a self directed IRA to invest in real estate with tax advantages, and many other instruments of tax favourability that are unavailable to public securities.
5. Improved Longevity: It's a no brainer that the white picket fence dream is dying in America. It's lonely. Millennials and others want to avoid the isolation of the McMansion in the distant suburbs, and rather be connected to a vibrant, walkable community.
Susan Pinker's Ted talk is laden with research demonstrating the importance of social connection and the build environment is one of the most important contributing factors to social integration. You simply run into people if it doesn't require a 15 minute drive to a coffeeshop.
These bonds have measurable improvements on quality and duration of life according to a meta analysis out of Brigham Young University.
Build Great Wealth with Multifamily Green Real Estate!
Now that you have a well-rounded view of real estate impact investing and the benefits of rental real estate, I hope you dive into the next step by making it a reality. Green Real Estate is emerging and you want to be at the beginning of the green wave to build your wealth and beat market expectations. If you would like to talk to one of our team members about how to move forward with investing in a cash flowing multifamily property, feel free to schedule a complimentary call. We would love to set you on the path to financial independence.
Go Beyond the Status Quo
Are you ready to learn how REAL wealth is created in our country and make a social and environmental impact? I invite you to walk with me in a smarter kind of investing. Investments you can experience outside wall street. Projects outside philanthropy.
Sustainable Investors Group
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By Morgan Fielder
Author profile: Morgan Fielder is an evangelist for sustainable investing. Join her eating, playing, and loving on nature around Europe exploring sustainability & husky powered oddesseys. She is living in Germany raising two gorgeous girls, wife of a rebel, serial expat, and is actively involved in the German community through several organizations. Visit her community project at cornholeuropa.com and cravetheplanet.com.