"You don't achieve harmony by everyone singing the same note" - Doug Loyd

Sunday, February 27, 2011

The hidden cost of going 'green' - MSN Real Estate




Society is conditioned as to what is considered aesthetically pleasing based on our experience and trends. Board members especially tend to push going green without thinking. The link below is an article that shows that going green can end up costing you more money. The money you saved in one area ends up being spent and paid to someone different, who is cashing in on the trend. For instance you may notice a lower water bill, but you your total expenses increased.  Because the money previously paid to your water company is now paid to the landscaper or insurance company or a specialized repair company. Changing who your paying doesn't save money!  If your total expenses decreased you have to figure out why.  Which is where detailed accounting comes into play.  
If your using general account names or mixing expenses that are unrelated into one account, you cannot determine what your spending on what.  If you say do a project that costs $15,000.00 to replace the front of your home's sprinkler system with a drip system and leave the backyard with the traditional pop-up system.  With the belief that your gonna save $1,000.00 a year on water.  Over the course of the next year or two any repairs made to the front yards drip system would have to accounted for separately from repairs to the backyard in detail.  Meaning all emitters added, extension to the system, any emitters replaced, or other expenses attributed to the drip system has to be accounted for separately.  If it isn't you could walk away thinking you saved money when you didn't.  Especially, if you were given the impression you would save $1,000.00 per year, then actually only save about $200.00.  Factor in that over the course of a full year the expenses for the drip system total $600.00.  Because plants were replaced (cost not included) or grew causing additional emitters (expanding the system) and normal system maintenance.  Your $1,000.00 per year now is costing you $400.00 more than it would have had you not converted to a drip system.  Now your not only are you out the $15,000.00 but an estimated $4,800.00 per year.     
Did you know that a $10,000 project that saves you $50.00 a month in water or $600.00 a year. Will take you 16.666 years to recoup. Because you will have to maintain the new system over those 16.66 years. You may never recoup the cost, therefore the argument that green improvements saves money to be false. Seriously, how many people plan to stay in the home for 16.66 years?   Because there is nothing to date that proves green improvements add value to your home when you sell. 

Now isn't the time to go green. Do not fall into the trap of rebates or tax incentives. For non-profit homeowners associations any money not derived from dues is taxable. Nothing is ever free. Thrifty people don't fall for trends. They know at the rate of which technology is advancing something cost effective will soon be on the market.
The hidden cost of going green can be read by clicking on the link below.
The hidden cost of going 'green' - MSN Real Estate

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