Green is still in. More and more businesses large and small are jumping on the bandwagon of environmentally friendly products, services and community planning initiatives. And now, the demand for energy saving features and earth-sensitive practices appears to be providing a not-insignificant boost to the recovering housing market: green homes command not just higher purchase prices, but also higher rents.

Green is the shorthand for a wide range of products, services and strategies that reduce damage to the environment and conserve energy. In the housing industry, opportunities for green building and upgrading can range from land management and building plans for new homes to installing new, energy conserving ductwork in an older home. Landscaping, too, can be a green investment. Planting shade trees to offset heat or xeriscaping to reduce water use also enhance a home’s green appeal.

Whatever the strategy, though, environmental experts and economists agree that green is in – and the desire to at least appear environmentally aware is driving decision making in many areas of the economy. According to Green Real Estate Investing News, that’s especially true in the housing market, where green-certified new homes may sell for 30% more than their standard counterparts in more affluent markets. Existing homes with a few green upgrades like solar paneling or energy-efficient appliances also sell for more.

In the rental market, too, green housing generates interest. Rental housing is in high demand now, fueled by new kinds of renters – affluent professionals and retirees who’ve made a decision not to own a home. These groups, educated and often socially and politically active, may seek out rental housing with environmentally friendly features too.

The benefits of going green aren’t just for new home starts. A variety of companies and even state and federal programs offer incentives and support for home owners seeking to install energy saving devices and make green upgrades in existing homes. These expenditures also qualify as tax-deductible improvements and maintenance.

The financial gains from eco-friendly upgrades ma not be immediate – and for some, the initial outlay can be considerable. But over time, even small changes can pay off in lower utility bills, more efficient use of resources and claimable deductions – as well as a smaller carbon footprint in the world. For income property investors, going green may mean taking the long view for returns on their efforts. But as Jason Hartman says, the long view – buying properties and holding them — is the one that leads to wealth.  (Top image:Flickr/Zalazar)

Read more from The American Monetary Association:

Can Rising Home Prices Signal Another Housing Collapse?

When the Fed’s in the Red, You Pay More

The American Monetary Association Team

Everything old is new again. For many financial analysts and real estate experts, that old saying may explain fears that the stars are aligning for another housing collapse, thanks to current trends in the market that echo all too clearly the signs that led to the last one. Along with the reappearance of a variety of iffy loan products not seen since the last crash, home prices are rising and potential homebuyers are just as unprepared as they were the last time around.

According to a new article posted by The Motley Fool, the recent surge in housing prices sounds a warning bell. The rising home pieces seen in major markets around he country have been welcomed as a sign of economic recovery and new energy in the housing market. But, observers say, high home prices contributed to the previous crash, which saw the market bottoming out and millions of risky borrowers facing foreclosure.

Back then, home prices across the board were rising and sales were booming. But those high prices shut out a substantial number of less affluent potential buyers and left houses unsold. So to keep sales moving, lenders rolled out a smorgasbord of risky new loan options such as low interest, no-interest and even negative amortization mortgages that appeared to make homeownership available to anyone who wanted to buy –even those with below optimal, or subprime credit. Many of these buyers, woefully under informed and poorly prepared, lost their homes when payments ballooned or circumstances changed.

Now, industry observers point out, prices in some markets are approaching levels not seen since before the last crash. Banks are once again beginning to offer some of those risky loan products such as the no-interest mortgage. And the so-called “strategic defaulters” – those who chose to walk away from their mortgage during the crash – re being welcome back by lenders willing o overlook the credit hit those borrowers took the first time around.

And there’s one more factor that completes the deadly combination. Recent surveys on American homebuyer behavior reveal that today, as in the period preceding the last crash, many potential home purchasers are uninformed and unprepared for taking on a mortgage. These would be borrowers don’t know they can shop around for mortgage rates and options and rely on loan officers’ explanations rather than reading the fine print themselves.

When high prices push housing past the affordability threshold for many purchasers, standards drop and lenders begin courting riskier borrowers with problematic loan products and eventually the process collapses on itself. Will lenders learn the lessons of the past? Financial experts point to the behavior of major US banks after the collapse for the answer: a resounding no.

The key to avoiding this scenario, say some financial advisers, lies in the hands of potential borrowers, who need to clearly understand what their options are and what they’re getting into when they take on a long-term mortgage. Taking charge of learning what you need to know is Jason Hartman’s first commandment for investors – wise advice that might keep history from repeating itself.  (Top image: Flickr/rieh)

The American Monetary Association Team