Upscale Tenant Market Demand Is Driving Multi-Family Renovations
A new wave of multi-family property renovations is being fueled by two things: 1) market growth brought on by large population shifts to Florida, and 2) the continuing Millennial inclination towards renting while saving for a down payment. Modern tenants are more educated and willing to invest more because they choose to live in better, environmentally responsible buildings. In order to keep pace with the surging demands of high-paying tenants, property management companies and investors are prioritizing a host of upgrades and in-unit amenities.
Tactics that successful management teams are implementing to increase the value of their properties include capital improvements, common area upgrades, efficiency upgrades, and small-scale renovation projects. Installing modern technology platforms and systems, upgrading appliances, adding high-end finishes, green builds, and new sustainability practices are some of the strategies being used to attract high market tenants.
Fluctuations due to a changing market have made improving ROI from apartment properties more urgent than ever before for multi-family investors. Here are a few value-add renovation projects to invest in for an increase in ROI.
1. Curb appeal
The first impression potential renters get of a property is its exterior. What an apartment building looks like on the outside has a huge effect on how much tenants are willing to pay to live there. Landscaping, fresh paint, upgraded external fixtures, and new signage can go a long way toward enticing a desirable audience of renters.
Make sure the grounds are kept clean and tidy at all times. Cosmetic changes are some of the most cost-effective, yet they can make a huge difference.
2. Security
Nothing can bring down the reputation of a rental property more than substandard security. Ensure that doors and windows of each apartment as well as front and back doors of the building lock securely. New locks, or new doors if needed, are an efficient way to help residents feel safe and secure while they are at home.
Well-lit parking, laundromats, entryways, and mailrooms are essential to residents’ safety. If funds allow, keypad security systems are also a good idea.
3. Element Proofing
A high-quality roof and/or an effective gutter system will protect your building against the elements and prevent water leaks into units. Although a new roof is a costly investment, it will save money down the line. It will also help to prevent property damage both for renters and the owner(s).
Weather-proofed windows and doors go a long way toward keeping utility costs at a minimum.
4. Unit Layout
In apartment buildings where square footage may be tight, a layout alteration can make units feel slightly larger. Consider knocking out a wall to create an open concept living area or to make an island in a tiny, closed-in kitchen. In a very small unit, two bedrooms might be turned into one larger, more comfortable space. Outdoor space that has gone unused can even be rededicated to make individual apartments a bit bigger.
5. Kitchen and Bath Finishes
Updated kitchen and bathroom countertops can deliver a much-improved living experience for tenants. Note that expensive upgrades like marble or granite finishes aren’t necessary to raise the value of a building and may be over-improving. New cabinets and updated appliances, however, will impress potential renters and reduce ongoing maintenance costs.
Avoid the temptation to make piecemeal upgrades. Although the upfront capital spend will be greater, renovating the whole property at once will result in greater attraction, monthly income, and overall tenant satisfaction.
Investment in a multi-family property renovation is money well spent. To learn more about the benefits of renovating your rentals, contact JMK Property Investments.
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