Multifmaily Investment Real Estate Upgrades for BIG Profits
Multifamily real estate plus key upgrades equals BIG profits. The fastest ways to increase the value of your investment real estate is by performing key upgrades. However, the upgrades don’t have to be physical in nature. There are three ways you can reposition or “upgrade” your investment real estate. By doing these upgrades, it will help you to raise rents, lower expenses, and explode the value of your investment.
Three ways to upgrades your multifamily investment real estate:
- Operational: This upgrade consists of changing the way the property operates or is managed. Typically it can include changing management companies , on-site managers, or by making your operations more efficient. However, it can also include removing troubling tenants, bringing in a different type of tenant with more disposable income, increasing occupancy, or adding additional revenue opportunities such as laundry rentals, carports, etc. This is one of the fastest way to change a worn apartment complex’s attitude and breath new life into your investment.
- Cosmetic: When operational upgrades won’t allow you to increase your revenue and value alone, it might be time to consider changes to the appearance of the real estate or cosmetic upgrades. Cosmetic changes consist of changing the aspects of the property to increase its appeal to potential tenants. Painting the apartment complex or the interiors of the units is one of the most dramatic and inexpensive ways to upgrade your property, but there are many other cosmetic changes you can make as well. These upgrades can include upgrading landscaping, restriping and resurfacing parking lots, adding signage, or changing interior or exterior finishes. It is the easiest and least involved strategy to physically improve your property. It can have a dramatic impact on how your tenants feel when they arrive at your property. This allows you to charge more rent, attract a higher quality tenant, and keep the ones you have. People want to live places where they can see that the owner is going to reinvest in it and there is no other way to do it than small or inexpensive cosmetic changes.
- Structural: The last and most involved strategy for upgrading your investment real estate is structural. When doing a structural repositioning or upgrade it can involves some of the following: changing mechanical systems, adding decks, changing the layout, or constructing new amenities such as pools,exercise rooms, or fire-pits to capture additional revenue. You can also just replace old systems such as HVAC systems that are constantly breaking down to lower your repairs and maintenance expenses. Structural changes are typically much more involved and can have a dramatic impact on the property, but usually has the highest cost and is the most disruptive to your current tenant base. You want to make sure your tenants will pay more if you perform this type of upgrade before you do it.
Key upgrades can help you make a dramatic improvement to your investment real estate and also your pocket book. Changing your investment property’s operations and increasing the efficiency is one of the least disruptive and easy ways to upgrade your apartment complex. However, when changing the operations alone aren’t enough, you should consider making cosmetic or structural changes to your investment property. The key is to make a dramatic impact that will allow you to charge more rent or attract a higher quality tenant to your property. When done right, key upgrades can have a huge impact on the value of your investment and your pocket-book.