Does Rainwater Collection Affect Home Resale Value?

For this blog I am using a real life example to help answer the question whether having a rainwater collection system at your home help resale value or at least helps the home sell faster.  To start I will tell what real estate agents have told me over the last few years.

I wanted to know what those in the real estate business thought about rainwater collection.  My line of questioning to 10-20 real estate agents (I forget exactly how many) went something like, “Do you think that rainwater collection increases home value?”  The answer was a 100%, “Yes.”  OK, so that’s a good start.  So the obvious next question is always, “so what percentage of the invested cost of a rainwater collection system will be recovered when someone sells the house?”  Here I had a range of answers and a lot of hedging.  I can say that I never had an answer below 50% nor higher than 100%.  I am not sure what the average was, but for the sake of this article I will use 50% as a conservative number.  In fact, when asked by Ecovie clients for a financial analysis, I use 50% residual value for ROI calculations.  I feel this is a conservative estimate.

With that background, it just so happens that I recently sold my own home.  We priced at what we felt was aggressive.  It sold in one day for full asking price.  The buyer as well as others who saw the house mentioned our 2800 gallon rainwater system as a positive.  Did the rainwater system help us sell the house?  I certainly think so!  Did it help sell at a higher price?  I like to think so, but who knows?  What I can share is that the cost of the rainwater system was around 1% of our home selling price.  Those same real estate agents tell me that homes on average are selling for around 94% of asking price.  While we have definitely done other upgrades to our home, it seems like this single case is one vote for rainwater collection helping in the selling process.  You can form your own opinion whether we received at least 1% of the sales price from the rainwater collection system.

Also, the current average time on the market is over 6 months which is way better than it has been for some time.  Nevertheless, we have saved over six months of being on the market compared to the average since we sold our home in a day at a price we and our real estate agent thought was aggressive.  Again, it’s a guess how much of this good fortune was due to having a rainwater system.  Hey, maybe the new kitchen helped too.

The next question that may come to mind is whether this was a good investment overall.  Being a  bona fide rainwater geek and amateur financial analyst I had to know.  We installed our rainwater system for irrigation and garden watering in fall 2008 and have had four seasons of use.  Before we installed it our summertime water bills (City of Atlanta) averaged around $300 a month.  Now, our bills are below $100 a month year around for a savings of around $1,600 a year.  That’s a savings of $4,800 in the last four years.  Taking the conservative residual value of 50% and reducing our time on market by 2 months (I cannot accept that we were looking at 6 months on market), I ran a financial analysis.  I used a cost of the rainwater system at pricing Ecovie would charge its clients.  I had lower costs since this was essentially a DIY project.  Using these numbers, I come up with an ROI of 22.4% with us being money ahead by a long way in the 4+ years we have had rainwater collection.  Not too shabby!  This was on top of having a system to show clients and having a great garden and back yard.

Some of you may ask, what if you had not sold your home? What would the financials look like then?  I ran the numbers again and found that ROI was still around 10%. As a low risk investment, this seems like a pretty good deal to me. Plus this does not take into account the value of a lot of other intangibles you can read about on our website.  See the ROI page http://www.ecovieenvironmental.com/return-on-investment/.  A possible future financial benefit for the couple who bought our house is a potential stormwater utility charge in City of Atlanta.  If that happens, rainwater collection will be given a credit, as well as the other things we have done such as the pervious driveway and rain garden.

I hope you have found this informative.  If you want to find out more details of our system, please respond this this blog.  I will be happy to connect!

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3 Responses to “Does Rainwater Collection Affect Home Resale Value?”

  1. carolyn458 Says:

    This is all good but would not be perceived by the general public as data from an impartial third party researcher.

    • bobdrew Says:

      Of course my blog post was not intended to be from a an impartial 3rd party. That would be impossible in my case! But, we I did do is provide a factual representation of my situation and show a real life example that I hope others find useful and informative.

  2. carolyn458 Says:

    That is a good beginning of what could turn into a project to solicit real-life examples from other people who are rainwater harvesting/homeowners.

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