Saving Money by Making your House Sustainable
25/05/2022
“Making your house more sustainable means less energy consumption, which is of course good for the environment, but it can also yield a lot financially, especially now that gas prices are so high”, says Professor of Real Estate Finance Piet Eichholtz. If you look at it from a purely financial point of view, it is always worth making your house more sustainable.
A simple calculation
Eichholtz gives an example: “In an average non-insulated house for two people, it will cost around € 1,000 to insulate the outside walls, and that will save you € 300 a year. Installing solar panels costs about € 4,500 and saves you € 600 per year. And the purchase of a heat pump costs € 7000 and saves € 400 per year. If you also insulate the floor and roof and opt for HR++ windows, the total cost of investing in your sustainable home is around € 21,500. From that comes another € 5,200 in subsidy and the whole package will save you € 2,600 per year.
Eichholtz: “That means that you have earned back your investment in about six years. Not bad when you consider that people live in a house for an average of ten to twelve years”.
AND THERE’S MORE…
That is already very attractive financially, but it gets even better, says Eichholtz: “What people often forget to take into consideration is the increase in value of their home through sustainability. With every sustainable measure, the value of your home will also increase”. The super-sustainable home from the previous example will yield around € 33,630 extra when sold. That is about 12 percent of the house value. Any increase in value due to rising house prices will be added to that.
TAKE A LOAN IF NEED BE
Of course, sustainability costs money and not everyone can make this investment. One in five households does not have enough money to insulate their home. However, according to Eichholtz it is more than worth it to borrow money for this: You can do that at two moments. Firstly, when you have just bought the house. That is ‘the golden moment’, because at that moment you can borrow € 9,000 extra on top of your normal mortgage. If you have lived in your house for quite some time already, you can take out a second mortgage on the surplus value of the property. The cost of this second mortgage is easily recouped every month through savings on energy costs.
Watch the video
In this video, created by Universiteit van Nederland, Piet Eichholtz explains in layman’s terms why even the biggest deniers of climate change should make their homes more sustainable.
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Piet Eichholtz
Professor of Real Estate Finance
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