From raising rents to enhancing curb appeal, multifamily investors are always finding ways to increase property value. Dedicating time and money into a reasonable strategy to add value can often be a complicated experience for even the most savvy property owner. Can I increase interest in my property by converting that unused room into a workout space or a laundry facility? Should I refresh my exteriors and raise rents or participate in a 1031 exchange? Each avenue for potential improvement is riddled with pros and cons. For this reason, we asked some of the brokers at ACI to recount their suggestions of increasing the value of your property by asking them this question…
What do you suggest is a good starting point to increase the value of a property?
Chuck Hoffman, President & Broker of Record at ACI Says:
After about twenty years a property becomes dated and in need of upgrades. I suggest to my clients that they are at a crossroads. You can do one of two things. First is to refinance and undertake a complete makeover of the investment which will position the property so that it can endure the next twenty years and have increased cash flow now.
This repositioning is not for everyone and therefore I suggest the alternative that they investigate a 1031 tax deferred exchange that could double their cash flow. In the market today investors will often pay top dollar to be the owner who repositions the property allowing the current owner to use the proceeds for a newer property, better maintained property or one with an increased cash flow.
Dave Savage, Director at ACI Says:
When it comes to increasing property values consider these factors, the laundry room is a direct profit center whereas the gym is indirect. The laundry room will be required in the B and C class apartments while a gym will be better received in the A product.
Terry Moore, Senior Vice President at ACI Says:
Last year San Diego Daily Transcript published my four part series about adding value. Contact me or see our website for that series. Study your ideal tenant. Millennials pay premium rents for elegant finishes in walk-able neighborhoods.
Make the exterior pop! Your property should be the show stopper from the street. Upgrade the interiors more than you think make sense. Some owners have raised rents 50% with $25k of strategic improvements.