Want to add value to your apartment building investment? You have more options than you might think.
In this post, we’ll share a variety of tactics you could use as you work to increase the value of your commercial property.
Some projects may be too time-consuming or expensive for you right now. Others may be quite simple to complete.
The important thing to remember is that you do have options beyond simply raising rents.
Take a look at the ideas below and refer back to this post as you create your strategy for maximizing the value of your multifamily property!
An otherwise attractive-looking unit can be completely undone by tarnished or out-of-date appliances.
But simply switching out that old, off-white refrigerator for a newer, stainless steel alternative can effectively create a whole new look for a kitchen.
Once you’ve upgraded your kitchens, why not move on to the bathrooms?
Take a critical look at the shower heads, door handles, and faucets – could you make a significant improvement to the look of a bathroom without a complete remodel?
Improving the look and functionality of appliances in kitchens and bathrooms elevates your property in the eyes of current and prospective tenants. Once the upgrades are made, you can feel justified in raising rents if you so choose.
Replacing the flooring in your apartment units may sound like an expensive proposition, but developers say the tactic allows owners to increase rents by $100 or more per month.
If you’re smart about the type of flooring you choose, you could also save money on cleaning costs. Imagine never having to worry about stained carpet or scuffed linoleum!
You can also generate additional revenue by offering certain equipment for rent. Your tenants may find it easier to rent a vacuum cleaner that belongs to the building than buy one at full price.
If you do choose to go down this route, consider limiting your rentals to appliances that tenants would not use on an everyday basis. Large cleaning equipment may be the most natural fit for your tenants.
A few basic improvements can make a big difference when it comes to the exterior of your apartment property.
Consider the building’s current state. Does it make passers-by stop in their tracks? If your property doesn’t capture attention, you will always struggle to get potential tenants through the door.
The good news is that you can make some significant improvements without breaking the bank. Here are a few tactics to consider:
- Signage: Can potential tenants clearly see the name of your property from the street? Signage that is difficult to read or out of place can undermine your advertising efforts.
- Landscaping: You don’t have to install hanging gardens or a breathtaking fountain to positively impact the exterior of your property. Reasonably-priced lawn care professionals can ensure that the area surrounding the building is well-maintained and inviting.
- Resurfacing (if applicable): If your property includes a parking lot for tenants, check to see whether the pavement is worn or cracked. Prospective tenants’ first impression of your building starts before they walk inside, so fixing pot holes and uneven surfaces can ensure that they enter your building with a positive mindset.
Of course, large-scale projects like repainting your apartment building’s exterior may also be necessary. The key is to focus on the projects most likely to attract and invite future tenants.
Apartments often lack the storage space families need – as a result, they rent space from self-storage facilities or simply downsize.
You can provide a convenient alternative and generate additional revenue each year by providing storage space onsite.
Speaking of convenience, you may want to consider inserting a store in your building’s lobby and selling basic items your tenants will regularly need.
These small stores provide a great deal of value for tenants who are short on time or those who wish to avoid going outside during periods of inclement weather. And you’ll benefit financially as tenants start coming to you for their milk, bread, and other essentials.
Think about the things you could do to go above and beyond for your tenants.
Whether it’s negotiating a better cable TV rate, hiring maintenance professionals to keep common areas clean, or constructing a small dog park on the land just outside your building, you can create additional value for tenants that will justify an increase in monthly rent.
Keep in mind that creating additional value goes beyond income generation. The improvements you enact can make a big difference should you decide to sell your multifamily property down the road.
Increasing cash flow and filling your property with happy tenants can also help if you plan on refinancing your mortgage. You can show lenders the improvements you’ve made and feel more confident about securing a lower monthly interest rate on a new loan.
If you have questions about commercial mortgage financing, reach out to a Commercial Direct expert today. You can learn more about the financing solutions we provide right here.
Zack North is the Director of Marketing for Commercial Direct. As a regular contributor to a number of top industry publications, Zack enjoys writing about topics that help investors and business owners approach commercial mortgage financing with confidence.