Investing in Your Home

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Wow!  The financial markets are a mess.  My 401(k) has tanked this quarter. The economy is reportedly in dire straits, and Congress hasn’t agreed on a bailout or any other action plan yet.
 
A lot of people are wondering what to do with their money. You have to go somewhere else for financial advice about your portfolio and your retirement plan.  I would like you to think about one arena, though, that still can deliver a big Return on Investment (ROI).  Home energy improvements. Even with recent declines in oil, home energy prices are still quite a bit higher than they were a year ago and forecasted to rise again this winter. Smart investing in your home can deliver returns better than the current bond market and extremely volatile stock market.
 
Here are a few examples to quickly illustrate the potential.

Let’s say you invest $2,700 in attic insulation and air-sealing.  (Remember, never think about insulation without thinking about air-sealing, too.)   And let’s assume that insulation is able to help you save $400 per year off of your gas bill based on last year’s prices.   Your first year ROI is $400 divided by $2,700 or 14.8%.  When natural gas prices rise this winter, you save more and your ROI is even higher.
 
Another example, with a simple calculation tip for your furnace.  If your present furnace is at 70% efficiency (AFUE), and you install a high-efficiency system with an AFUE of 95%, then the projected saving is 25% of the fuel you burn.  Or, said differently you save $25 per $100. If your annual fuel bill is $1,400, then your total annual savings would be about $25 x 14 = $350.  If that new furnace cost $3,850, you’ve got a 9.1% ROI—plus, you won’t be wasting money on service calls to fix your old furnace. Like the earlier example, as energy prices go up, your return goes up.  
 
Now these are just simple examples.  You might want or need a combination of several home energy improvements.  You’d need a comprehensive assessment like GreenHomes offers to determine exactly which improvements make the most sense for you and your home.  And a GreenHomes Advisor can more accurately estimate your savings.  The take away, for you, is that now more than ever, energy-reducing improvements are a smart investment that will deliver consistent returns for years to come.

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One Response to “Investing in Your Home”

  1. Be Smart About Remodeling « GreenHomes America Says:

    […] you can cut your home’s energy costs signicantly and actually make the project pay for itself.  Investing in your home makes sense—if you do it […]

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