Today we’re talking about how to increase the value of your apartments or multi-Family. One of the great things about apartments and MultiFamily is that the value is not based on comparatives of properties that sold around them that are similar. It’s actually based on income and how much income the property is generating.
So, the great thing about that is the things that you do that directly impact that NOI (Net Operating Income) increases or decreases the value of your property. There are several things that you can do depending on the property, the condition, and things of that nature to increase that NOI:
The number one thing that almost everybody does that is pretty common, right? – Raise the rents. You just raise the rent; it automatically increases the income. On the flip side though, by raising the rent, sometimes if you raise them above market rents, you could be pushing out good tenants so that you’ve lost income. So, there’s a risk versus reward. Those are things we have to keep in mind when we’re actually doing this. That’s where our experience comes into play.
Another thing that is very common to do is a lot of properties like to allow pets, but they’re not charging for those pets. There’s an added expense when you have pets on your property, there’s a cleanup, there’s a maintenance side of it, there’s wear and tear on units, damages, etc. You’ll want to have Poop stations and things of that nature. So, charging pet rent and larger pet deposits is definitely a must. And in doing so, it can actually generate more income as well.
Sometimes properties have hookups for washer dryers, but they don’t have actual units in them. They just have the capability. So, if the residents wanted to come and say rent or lease equipment from you, then in those situations they can just pay additional fee and then they rent or lease the equipment from you. Obviously, that’s another way of getting more income for the property. Sometimes properties will have community areas, barbecue areas and things like that. Putting vending machines in that area that sell drinks and candy and such is another possibility for increasing the income.
These are just a few ways you can increase the income on your multifamily properties. Stay tuned for part 2 which covers ways to reduce expenses on your multifamily properties, both of which increase the value of your community.