As we get closer to the end of the year, one of the most important things that every investor should be thinking about is how to increase the value of their multifamily investment property. This is important because of the obvious reason that the more value that an investor adds to their property, the more return on their investment.
In this article, we will share with solutions every investor can implement to the value of their multifamily investment property.
The first and obvious way an investor can increase the value of their multifamily investment property is to make repairs and improvements to their property. This step is huge because taking care of repairs regardless if they are minor or repairs or not will only improve the look of the investment property and enable the landlord to rent the units in the property for market rates.
Another important way to increase the value of a multifamily investment property is to make improvements.
Where should a landlord start be making improvements to their property? One of the easiest places to start is at the curb because curb appeal can mean the difference between a prospective tenant getting out of their vehicle and going inside the property to check it out or moving on to the next property
Besides curb appeal, here are some great ideas for making improvements to a multifamily property:
6. Sub-Meter Utilities
We have all driven past that apartment building in the middle of winter where the tenant has the windows wide open, heat blasting. We also all know the tenant who never reports that their toilet is constantly running because they don’t pay for water. Depending on the mechanics of the property, sub-metering can be one of the largest value-add activities.
2. Add Washers and Dryers
The number one amenity currently added to rental leases are washers and dryers. This could add $40-75 per month to your income.
3. Add LED Lighting
If you are a long-term buy and hold investor, LED lighting in common areas is a no-brainer. First, it uses so little energy, you save on the utilities. Second, the bulbs last 25 years, so you aren’t paying maintenance to change them.
4. Consider Adding Vending Machines
Yes, it’s true that the income produced from a vending machine can increase the value of your property. I have seen these in several settings: 1) in common areas, such as placing a drink or snack vending machine in a gym area or around the pool, 2) in common area laundry rooms that have laundry and other household essentials in them. Think single-serving detergent, stain remover pen, carpet stain remover, fabric softener. The best part is you don’t have to buy the machine. Just like with coin laundry, many companies will place and service vending machines, and you get a percentage of the income.
5. Garage Parking
People can and do pay more to park their cars or have additional storage in a garage. Adding an additional charge for garages is common and can be worth building garages in some instances. A less expensive substitute would be carports.
6. Prime Parking
Prime parking means something in this day and age, especially in cities like New York or Los Angeles where parking is always at a premium. Tenants will pay to reserve those special spots. Pop a few signs in the best spots that say “Reserved Premium Parking for Rent.” This will add more income to your bottom line, and the value of your property will go up.
Source – Bigger Pockets
Increase Rentable Square Footage
This will obviously take an investment of time and money but the reality is that increasing the square footage almost always enables landlords to increase their rentable square footage while increasing their total rental income as well.
Combine or Divide Units
If a property has one unit that’s 3,000 square feet or two units that are 1,500 square feet each, one solution that the landlord might want to consider is combining or dividing those units. Either option will enable an owner to increase their rental income but it should be considered seriously because of the obvious reason that if a landlord combines two of their units into one, they will be potentially losing rental income.
Another easy way that an owner can use to increase the value of their multifamily investment property is to decrease their expenses. Anything that can be done to decrease expenses will only add more money into the owner’s pocket and help them to get more ROI from their property.
The reality is that utilizing one or all of the ideas in this article is going to take an investment of time and money. If you are serious about increasing the value of your property it’s best to start making this a consistent part of your monthly tasks because focusing on this regularly will without a doubt enable you to earn more income from your property.