All advice is not created equal, especially in the world of real estate and renovations. These days, it seems anyone who binges HGTV and feels a close personal connection with Chip and Joanna Gaines has a strong opinion on how to renovate properties. Of course, armchair “experts” are a bit easier to ignore than actual professionals within the real estate market.
Multifamily property investors, especially newcomers to the industry, run the risk of accepting the wrong advice from well-meaning single-family property investors. Multifamily investments are an entirely different beast, so think twice before you make decisions based on the advice of single-family friends and family.
An expert at multifamily property renovation will help you:
Choose wise renovations
Single-family property investors have a tendency to follow a “go big or go home” game plan. When you’re renovating a single-family home that needs to dazzle prospective buyers, that can be a good strategy. Not so in the multifamily property market. You can only charge so much in rent, so adding expensive countertops and high-end finishes to multiple units may not get you the same return on investment (ROI).
Experts in multifamily property renovation are able to identify selective renovations that will appeal to your target market while keeping costs as low as possible. Whereas a single-family property investor may be attracted to granite and stainless steel, a skilled multifamily expert can steer you to less expensive but still attractive options.
Check out this article from Multifamily Executive for a detailed look at how renovation choices can affect your ROI.
Attract renters with the right amenities
Experienced multifamily property renovators have their fingers on the pulse of the market at all times. They can let you in on the hottest upgrades and amenities creating market sizzle today. What amenities are most attractive to your target market, and how can you get your highest return for a low capital investment?
Check out this post for more ways to add value to your rental units without breaking the bank.
The National Apartment Association also has several tips for how to identify the right upgrades for your market. For instance, they suggest that smart home improvements such as Wi-Fi thermostats and smart lighting can be a wise investment. As you consider where to invest your money in amenities, be sure to use information from trusted multifamily sources like the NAA and Multifamily Executive.
Identify new revenue sources at a property
Multifamily property renovators are pros at finding new ways to increase profits at an investment property. Can you repurpose a space to attract more renters from your target market? Could you find a way to profit from a repurposed space through rentals or service fees? For example, many apartment communities offer pet washing stations or bike repair shops in exchange for a small usage fee. Not only does this add value to your residents, it brings in another stream of income.
Here are 6 more ways to generate new revenue at your property.
Beyond that, an expert eye can spot existing features to highlight and maximize. Perhaps the entryway could be spruced up with a quick coat of paint and some simple landscaping. Is there a unique entryway that you could incorporate into your marketing, or an outdoor feature that is particularly appealing?
Spot hidden costs and maintenance pitfalls
A skilled multifamily property renovator will help you identify and budget for costs you may not be aware of. For instance, you may need to plan for the following:
- Lost revenue from vacant units during renovation.
- Management overhead for planning, managing, and inspecting the renovations.
- Disruption to revenue throughout the property – will you have to offer financial incentives for current residents who may lose access to amenities or be inconvenienced by construction noise or equipment?
In addition, a multifamily expert will help you generate a plan for operating and maintaining major building systems. A thorough inspection and maintenance plan of the following systems can help you avoid the disaster of unexpected emergency repairs:
- Boilers and HVAC
- Windows and Insulation
Network for deals and information
Your multifamily property renovation expert has a serious advantage over single-family folks when it comes to networking. Your bottom line will benefit from valuable connections gained from a multifamily insider. They have connections with vendors and service providers who cater specifically to the multifamily industry. Perhaps most importantly, they know reliable contractors and other service providers who understand economies of scale and price their services accordingly.
Naahq.org is a great source for finding experts who have new ideas, solutions, and creativity that single-family experts simply don’t have. Before you get in over your head, make sure you have the right people in your corner. Multifamily investing is a whole new world. If you need help navigating it, we’d be happy to schedule a consultation. Contact us today for more information.
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