Investing in older apartment buildings can be a smart move for your portfolio. But there are risks that come with an older apartment building, as well. The first is the market appeal. If your older building is competing against newer, more modern multifamily properties, you’ll end up at the bottom end of fair market value. The other big issue is operating costs. A lot of older apartment buildings look like a good buy until you look at the cost of lighting, heating, and maintaining them.
But that shouldn’t scare you away from purchasing an older building. There are many profit-maximizing makeovers you can do to your property. These updates will help increase the appeal and decrease operating costs. Plus, you’ll be able to use “green” and “eco-friendly” in your marketing. And that’s a feature becoming more important to potential residents.
Here are some important updates you should consider for your older multifamily property.
Upgrade the design aesthetic
The design aesthetic of your space is your building’s first impression. An aged impression can turn off potential renters. It can leave your building feeling drab and dated. Upgrade the look with designs that fit your building’s brand.
- Go for modern, sleek lines for an instant upgrade.
- Lobbies should be intimate or sleek and stocked with new furniture.
- Update your signage, inside and out, and keep it on-brand.
Modernize the kitchen and bath
Kitchens and bathrooms can make the difference between a rented unit and one that sits empty. The trick is to update these rooms at the same time. If you do one and not the other, the one you don’t update will look even worse by comparison. Sparkling clean is the name of the game here.
- Use light color palettes in these spaces.
- Go for stone or concrete for durable and low-maintenance surfaces.
- Install touch-free fixtures for resource savings.
- Replace all old hardware and lighting fixtures.
- Refurbish cabinets.
- Reglaze or replace the tubs.
Install new lighting and lighting controls
New lighting and lighting control technology will help reduce energy consumption within your multifamily property. That’s good news for you as the property owner of an older apartment building, as common areas won’t cost you as much to light. But it’s good news for your residents, too, who can look forward to lower monthly energy bills.
- Replace all traditional lightbulbs with LED bulbs.
- Install dimmers and timers to decrease energy consumption. Learn more about the benefits of these devices from Energy.gov.
- Use motion, occupancy, and photosensors in public areas to lower operating costs. The U.S. Department of Energy has more information on the benefits.
Embrace green building strategies
There is a reason green building strategies are so popular. They are good for the planet and the people living in your buildings. But sustainable practices reduce operating costs, too. They also appeal to renters, who feel good about their living space and are more likely to renew (and be referrers, too!).
- Research LEED certification for ideas about how to make your building more sustainable. You can find information on the U.S. Green Building Council website.
- Reduce water waste with ultra-low-flow showerheads and toilets.
- Use healthy, energy-efficient materials when doing any remodeling or upgrades to your building.
Install building automation systems
Smart home technology and building automation systems (BAS) are great for residents and property owners alike. These systems help reduce operating costs and energy consumption, even in older apartment buildings. They can also increase security by giving tenants and owners more control over the property even when they aren’t on-site.
- Smart locks provide more control over who goes in and out of the property. Additionally, they end the need to rekey the property after a tenant moves out.
- Smart thermostats. Smart thermostats learn when to raise and lower the temperature, providing huge energy savings.
Add in-demand amenities
Tenants care about the amenities available in public spaces. Adding in-demand amenities can be a huge boost to your appeal on the rental market. Research amenities available in similar properties in your area and see where you are lacking. Also, look at what amenities are in the most popular properties and see where you can improve.
- Create natural spaces for a park-like atmosphere close to home.
- Build community gathering spaces available to everyone.
- Invest in recycling programs.
- Set up a fitness center.
- Provide modern amenities like docking stations, building-wide WiFi, and package delivery systems.
Replace aging building systems
As you upgrade aging building systems, look for energy efficient replacements. Make sure you also work on preventative maintenance planning. This will help you mitigate costs associated with your older systems and work towards replacing them.
- Replace your roofing with something more energy-efficient. Duro-Last® offers a commercial roofing system. It’s certified sustainable and great at lowering cooling costs.
- Replace older boilers, plumbing systems, and windows with energy efficient options. Sometimes the energy savings will help offset the installation costs.
Research your funding options for older apartment buildings
Don’t assume these updates are going to cost you a fortune. There are funding options available at both the local and national level. They offer cost-cutting incentives like rebates, tax credits, and low-interest loans.
Below is a list of national funding resources that may offer incentives you can use. Be sure to research funding options with your local and state government agencies as well, as they may offer extra resources.
National funding sources:
- Center for Rural Affairs Commercial Property Assessed Clean Energy (C-PACE)
- Energy Star’s Rebate Finder
- Fannie Mae’s Green Financing Loans
- EPA’s Green Infrastructure Funding Opportunities
- HUD’s Green Retrofit Program for Multifamily Housing
Looking for more ways to increase profits from a multifamily property?
Struggling to turn your older apartment building to a profit center? Contact the Theresa Bradley-Banta team. We offer a free initial consultation to multifamily property investors. We can help you uncover new ways to maximize your property and get the most from your investments. Discover more about how we can help by getting in touch with us today to schedule your free consultation.
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