Market value can be negatively impacted by such things as the economy, community political issues, current building and/or property conditions, and crime rates. We may also define property risk associated with non-payment or borrower debts. But environmental risk is not normally a top concern for real estate managers and investors… until it’s too late.
The true danger of delaying action on environmental property risk is the potential for contaminated soil and/or groundwater that spreads pollutants to nearby properties, causing harm to the local ecosystems, health risks to tenants and neighbors, regulatory violations and fines, legal liabilities, decreased property value and revenue loss due to reputational damage. These environmental risks point to prevention and mitigation, which require a planned management strategy. To effectively manage a real estate portfolio for environmental risk, you need to consider the following six steps:
Staying on top of all six of the above steps will put you well on your way to successfully manage environmental risk for real estate. If you need to speak with an expert on how to make sure you have covered all your basis when it comes to environmental property risk, feel free to reach out to me directly.
Discover the Power or RiskFacts’ Property Risk Forecasting.
Sustainability Tooltip: Incorporate sustainable practices into property management to promote long-term resiliency. Sustainable practices may include upgrades to energy efficiency, upgrades to alternative sustainable energy sources and use of smart technologies to help control or minimize building, heating, cooling and lighting costs.
Tyler Moore is a RiskFacts expert in property risk forecasting with extensive experience in developing and implementing risk management strategies.
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