Make Your Multifamily Property Even More Lucrative with Forced Appreciation
Learn how you can make improvements to boost your return on investment
When you own a multifamily property, your investment will naturally appreciate over time. Natural appreciation, however, can take a long time. So if you are looking to increase your return on investment a little quicker, there’s no better option than to force appreciation.
Forced appreciation is the process of carrying out improvements that will make your property more valuable to buyers and attractive to lenders. You can charge higher rent for units within an improved property, and you’re more likely to maintain a high occupancy level, with tenants wanting to stay for a long time. By increasing your income via forced appreciation, you also increase the value of your property. Therefore, being able to identify opportunities for forced appreciation is one of the most valuable skills you can learn as a multifamily investor.
Improve and update
Unlock your multifamily properties earning potential by making your units more attractive to tenants. Improving or modernizing key areas is a great way to achieve this, as tenants are prepared to pay more for updated amenities. If you are looking to make big changes you could consider remodeling bathrooms and kitchens. Alternatively, making smaller changes — such as painting walls or freshening up the landscaping — needn’t cost a lot but can dramatically boost the appeal of your property.
Revitalize your space
Take a close look at your property to see if there are any unloved areas you can capitalize on. Consider revamping your outdoor space, or find the room for a communal area that residents can use to get together and socialize. Improvements like these will give your property the edge on attracting tenants over others on the market, and the chances are that once those tenants move in they will want to stay for a long time. You can also command a higher rent because of the added amenities.
Focus on safety
Residents want to feel safe and secure in your multifamily property. Installing security cameras and keeping well-maintained fences and boundaries will give your existing tenants peace of mind, and you can advertise these features to prospective tenants too. You could also consider updating your units to feature smart technology. According to a recent report, multifamily renters — millennials, in particular — are interested in home technology and are willing to pay more for smart upgrades. In fact, 86% of millennials are willing to pay about one-fifth more for a smart apartment with automated or remotely controlled devices, such as a smart lock, automated thermostat or lighting controls.
Whether you are looking to sell soon or planning to keep hold of your investment for the foreseeable future, you can make a big difference to the value by forcing appreciation. If you need advice, the team at 100Units.com is ready to help. As trusted multifamily property advisors, we have helped thousands of clients see the best returns. Contact us today to maximize the potential of your multifamily investment.