As with all investments, multi-family properties can fluctuate over time. One way to continue making money over time — even in tough economies like this one — is to improve your multi-family property’s value.
And luckily, there are many small-scale and large-scale improvements you can make to help attract and retain tenants and make your multi-family property more desirable.
Aside from pictures, your property’s exterior will be the first thing your future tenants will see. If there’s overflowing trash, broken windows, and an unkempt landscape, potential renters might not even slow down, much less park to see what the units look like inside.
According to Consumer Reports, adding curb appeal can increase a property’s value by 3% – 5%. Hiring a decent landscaper or working with one through your property management company won’t cost you anywhere near that.
Renters pay extra for convenience. Certain amenities can even solidify a tenant’s decision to rent in your building. Some amenities to think about include:
In a recent Gallup poll of remote-capable U.S. workers (people with jobs where working from home is possible), 80% of the 8.090 surveyed said that they work from home some or all of the time. Not everyone wants to work at their coffee or dining room tables or install an office in their walk-in closets.
Convert one of your building’s common areas into an office space, complete with an espresso machine, WiFi, and comfortable seats for people to work at. Your tenants will enjoy a short commute to work and can easily manage their work-life balance.
Communal spaces can improve tenant retention by giving places to gather and create a sense of belonging.
Whether it’s the office space mentioned above, a gym, a pool, a game room, a communal garden, or something else, offering spaces where renters can bond adds value to your building. If your property becomes a place to live and socialize, your renters will be more inclined to renew their lease.
“Loss to lease” refers to the money property owners lose when they don’t charge market rents. The “loss” represented the disparity between a unit’s actual rental income, agreed upon in the lease, and its market rate.
If you’re taking over a new building or your property is located in an area that’s seen a surge in rates in the last 12 months, pay close attention to market rates. Think of it this way: If you own a 25-unit building and everyone is paying $100 below the market rate, you’re missing out on $2,500/mo and $30,000/yr. And at 6% cap rate, that’s a $500,000 increase in the value of the property ($30,000/6%)
Technology is a tremendous value add for your multi-family property, especially if your building attracts younger, tech-savvy tenants. Notable upgrades include:
A sustainable multi-family property can reduce its energy bills by 60%. The U.S. Green Building Council also found that sustainable housing has increased by 19% since 2017. Also, millennials and Gen Zers are more conscious of their carbon footprints than other generations.
In other words, going green will save you money, keep your building competitive, and make it more desirable to the demographics most likely to be living there.
You can start implementing all of these value-adds — and more — today.
OR, you can sit back and let us do the work for you. You won’t have to worry about landscaping, rent collection, or calls from tenants on your nights and weekends. We’ve got that covered.
Want to learn more? Send us a message!