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Property owner and operators engaged in the multifamily housing sector have three key goals: generate income, remain competitive, and of course, resident retention. So what must they do to meet their desired outcome? Simple answer: Renovate and Upgrade.
This article will explain three reasons on how a simple property renovation can raise the value of your investment property and how it can benefit large scale property investors in the long run.
Property investors renovate multifamily housing and recover the costs with increased rental rates. After all, these are one of the three goals of a property investor: to generate income. According to experts, renovations with the most significant ROI are the kitchen, bathroom, and flooring. This is regardless of the rental property's location and the current market.
Here is some worthy renovations property investors should consider:
• Kitchens: The kitchen is the hub of the home, so it is suggested to create a light-colored modern space. White or light gray cabinets, light-colored counter tops, stainless steel appliances, and neutral tone walls. Everybody loves a neutral tone when decorating, as it goes with anything.
• Bathroom: Another important space in an apartment that adds value is the bathroom. Great suggestions are light-colored palettes, double sinks, vanity mirror, and other trendy renovating ideas. It's important not to overlook the bathtub and tub surround. A dirty or dingy shower/bath area can be a true eyesore and will scare away prospective residents.
• Flooring: Flooring is another key area to invest you CAPEX dollars. The focus should be on upgrading to hard surfaces such as Luxury Vinyl Plank or Ceramic Tile flooring, instead of carpet. This will create a more modern look that helps you attract even more residents. Also, by upgrading to hard surface flooring you get finishes that are easy to maintain and generally will last longer that carpet.
Upgraded Rental means Upgraded Residents
This means families will look for rental units for a long-term purpose. Property investors benefit from these types of residents because the monthly income is steady and long term.
The good news is that long-term residents mean they are starting to love the property, and they are beginning to consider it their own home. Families start to become comfortable, and it will be harder for them to leave. As far as lasting results is concerned, this is a gateway for an improved community. After all, resident retention is what property investors aim for.
Determining the rental value of a property includes several factors, location, amenities, current condition, and competition. Out of these factors mentioned, only two options can be controlled by the property owner and operator, and that is the condition and amenities of the property.
All the other options like the location, community, and the competitors can't be changed. That is why renovating the amenities, and improving the current condition of the place are the only options to increase property value.
The top 3 significant renovations that can increase a property's value are the bathroom, flooring, and the kitchen (these are the key selling points of most properties). Property owner and operators usually see an increase in 10% - 20% of the rental value of their units after performing upgrades.
So, are renovations worth it? YES! As long as you invest in the right upgrades, and most importantly that you partner with the right vendors.
Looking to renovate your multifamily housing property? Central Pro Services is a leading provider of maintenance and renovation services for some of the largest property management companies across New Jersey, Pennsylvania, Delaware, New York, Connecticut, and Ohio.