Purchasing a multifamily property is great for creating a steady flow of income on a monthly basis, however, there are ways to improve on the property to further increase its value. Value-add investment, as it is sometimes called, is where a real estate investor purchases an older apartment or multifamily property and either partially renovate the property or add features that bring more value to a tenant, making them more willing to spend more. So, how can you add value to a multifamily property?
Renovations
By upgrading some features in an older apartment you can increase rent to match. For example, upgrading the flooring from carpet to tile or wood can increase the value of the unit significantly, and will also last longer than carpet, saving you money in the long run. This will allow you to increase the rent accordingly, while still being a more affordable option than a new luxury apartment.
Since most apartments have already gone through some partial renovations, the renovations you may be looking to add as an investor is putting in newer appliances and, as mentioned before, putting in a more durable flooring option.
Sub-Meter Utilities
Not all tenants are as aware as they could be about their energy or water use, and if you’re still giving them a flat rate or not asking them to pay for it you’ll be the one getting hit hard in the end. By sub-metering the units of your multifamily property you not only add value for when and if you sell your property but also to the tenants by putting the cost of utilities into their control.
Pet Rent
Aside from service animals, allowing pets on the premises of your apartment premises is a huge bonus for many potential tenants. However, if you are not charging a pet rent you are not protecting your investment as well as you could be. By adding pet rent, you are ensuring that damages done by an animal can be taken care of once the tenant is gone, and additionally, you’ve added another source of income for the good dogs that don’t wreck the space.
How do you plan to add value to your investment property? If you need a multifamily loan then give Capital Fund 1 a call today to get started.