Renovations to increase ROI in your multifamily unit
If you are a property owner, you’re probably thinking what renovations you can do that will cause a return on investment (ROI) for your multifamily unit. There are several renovations that can help you increase your rent significantly. We have made a list of them for you, so you don’t have to think about which ones to choose.
Read on to learn more about what you can do to increase the ROI on your multifamily property.
Exterior Renovations to Improve Curb Appeal
Curb appeal is everything when it comes to getting new tenants into your building. Small improvements like painting the exterior and new landscaping will give your property great curb appeal. Having great curb appeal will help make a good first impression with potential clients, which can help spark interest and desire for tenants to move in. It is a major influence on a potential tenant’s decision to rent because it’s the first thing they see when they arrive.
New Flooring Will Create a “Wow” Factor.
Changing the flooring to newer materials is an easy way to create a “wow” factor because it is the first thing a tenant will notice when walking into a unit. By providing a more modern and cleaner look, it is easy to impress the potential tenant and make them feel like the unit is new and easy to maintain. A good choice is using laminate vinyl planks or some variation of that because it looks like wood, but it is easier to maintain and cheaper to install.
Tenants like new things. By adding new appliances to your kitchens, like a new fridge or stove, you will be able to charge $50-100 more in rent and become the best choice for new potential tenants. This, in turn, will help cover the expenses of buying the new appliances and create a greater return on investment.
Offering amenities doesn’t have to mean offering big things like a gym or a pool. By simply adding washers and dryers (or hookups for these) to your units, you can increase both the value and convenience of your unit because you are eliminating a resident’s need to leave the unit to take care of laundry. Even adding more electrical outlets to an apartment unit counts as an amenity and believe it or not, tenants will move out of places where they don’t have enough outlets, especially in the bathroom and kitchen.
Kitchens & Bathrooms
As any realtor will tell you, kitchens and bathrooms sell homes, and this is also true for the rental market. Renovated kitchen and bathroom spaces are a great way to increase your rent, because tenants spend a lot of time in these spaces. Having these places look modern and updated, including finishes and amenities will go a long way, making it possible for you to charge more in rent price. You could even bump it up by an extra 10-30%, depending on the quality of the work and the finishes. Updates to be done here could include: upgrading the flooring, energy-efficient appliances as discussed above, LED lighting and added prep space.
In the long run, these renovations will only be for the better. They may help you to:
- Decrease Turnover: High tenant turnover is expensive and the turnover rate for multifamily units is around 50%. It’s important to retain tenants, which renovations can help you do.
- Increase Revenue: Like discussed during this article, making renovations will help you increase revenue. They can add value to your property and increase your monthly income from rent.
- Keep Your Property in Working Order: Adding renovations not only to the inside of units, but to the exterior of your property, only adds value to your property because you are extending its working life. Regular maintenance like adding new roofs and upgrading plumbing and HVAC systems can help avoid unexpected repairs when the property deteriorates, which are usually more expensive.
- Ensure Resident Convenience: Modern tenants expect modern convenience and are willing to pay for it. So, convenience matters when it comes to multifamily units. Investing in renovations that will make your tenants’ lives easier will only help increase your revenue.
These are just a few tips in helping you decide which renovation projects you can do to increase the interest and the rent in your multifamily space. Renovation projects can help create a better living space for your tenants, without the added time or cost involved in new construction. But, you don’t have to do them all. The trick is to pick and choose. With some research, you can select the renovation projects your tenants want most.