As a real estate investor in the North Dallas, Plano, Southlake or Keller areas, you may already be satisfied with the consistent growth in the value of your properties. However, there is always room for growth. Additionally, with this region being identified as one of the hottest in the real estate investment market for 2017, chances are there will be additional properties to come into your portfolio in the coming year. Naturally, you want all of them to have the greatest value possible.
In order to accomplish that goal, we give you three key ways of adding value to a multifamily purchase, and will also have a short list of tips at the end, as well.
1. Reconsider Common Areas
Whether it is a new purchase or one you’ve had for a while, you can increase the value in terms of actual, appreciated value as well as curb value by redoing the different common areas. Take a look at the entire exterior of the building(s). Do they appear appealing and attractive? Are they spaces that residents may want to use or just pass through on their way inside? Boost value by sprucing things up with landscaping, painting and general repairs.
Also, consider signage. While many building owners boost value with a “rename” of a recently purchased property, even a redo of your signage and logo can increase the curb value and appeal. It is also important to keep in mind that “review” websites can haunt you if your purchase was in need of rehab. Though you might refurbish a multi-family property and turn it into a wonderful spot, old negative reviews can be a problem. Renaming the building, and putting up new signs can erase a lot of the problems with the old brand.
Many landlords say they are nervous about changing the status quo in a multi-family property and billing renters for utilities. This, however, is common place in the rental market. These are, however, resources that can be used at wildly variable levels by the different renters, so it just makes sense that they should pay the bulk of the expense. While a building may not already have the infrastructure necessary for sub-metering, it is not difficult to make the shift and do so. There are entire industries dedicated to helping real estate investors pass and allocate these expenses fairly and legally.
3. Get rents to market ASAP
Another thing that many landlords fear is the backlash of a plan for raising rents. However, as the owner of investment real estate in the Dallas area, it is imperative to reevaluate your market and begin to increase rates to the most current levels. There are many simple ways to gauge the fairest rental rates, but you do have to take any of your improvements into consideration, the ways you may have lifted renter satisfaction since purchasing the property, and there are the legalities of current leases.
Test the waters on a few vacant rentals to gauge whether you can succeed with your increases. You may hear some complaints from renters about the raise in rent, and the best policy is to allow them to explain their concerns, but also let them know that you are bringing the building to market – not exceeding it. They will quickly discover that any increases reflect the pricing throughout the region.
By doing some basic improvements, reworking the utilities, and getting apartments to market as soon as the lease is due to renew, you can almost immediately add value. Don’t forget alternative income streams as another rapid-fire way to increase value. This might mean adding a coin-op laundry room, redoing a common space to be used as a rental, adding premium or fee-based parking beneath a car port or making storage space available for a monthly rent to create simple streams.
A multi-family property is one of the savviest investments, and these tips can help you make it even more profitable as soon as you have purchased it.