You could be losing hundreds to thousands of dollars per month on your investment property if you have below market rents. Something needs to be done to maximize your investment, this can be difficult and complex or quick, simple and easy. Of course every area has a rental ceiling, a market rent, as does every asset type "A+" through "D-", your job as an investor and asset manager is to find it.
This is What You Need to Do.
1. Evaluate the space.
- At a minimum your apartment has 4 walls.
- Whats common in the same asset class buildings within 3 miles of you?
- Do you want to reach a higher tenant class, increase rents or both?
2. Double Check Codes, keep apartments safe for the tenants.
- Make sure your are currently up to your local codes throughout the property.
- Keep basic tenant safety a top priority when maintaining and upgrading.
3. Ask yourself what you would pay extra for, what would make an apartment a home?
- These don't have to be expense features like fire places and granite counter tops.
- See our list below.
4. Build it.
- Take your design, make it a reality and profit.
- Accent Walls are very cheap and simple way to add depth and style to any room
- Upgrade the kitchen faucet, something like a goose neck looks much better then a standard faucet
- When the appliances go upgrade to Stainless Steel or black appliances instead of white, keep on top of current trends
- If carpet is still in good shape be sure to have it professionally cleaned
- If you are removing carpet, tile or other flooring consider replacing it with LVT (luxury vinyl tile) in certain rooms
- Next toilet install go for the elongated version provided you have the space
- Add trim or moldings if this is missing
- Paint goes a long way, paint the walls, trim and ceilings for a fresh looking apartment
- If installing new outlets upgrade to ones with USB ports, for higher end turns you could even consider smart outlets
- Install WiFi thermostats, these add convenience but can also allow for greater customization leading to energy and money savings
Keep Codes and Safety in Mind.
1. Are all smoke detectors working? You should be sure to have smoke detectors in all required locations, they should have a 10 year battery back up and they should be checked often
2. Adding fire extinguishers in either the kitchen or laundry area boosts safety and in turn can make perspective tenants feel better about an apartment
3. Make sure to have good working locks on all doors, nice finishes give apartments an added splash of style
There are a lot of big and small upgrades that can be done to apartments in order to command and achieve the market rent. Be sure to understand your town and understand what your competition is. It is entirely possible to over do an apartment turn and not be able to get the rent that you expected. At the same time you do not want to leave money on the table, a loss to lease each month adds up and rents are part of the equation to valuing your property, so the higher the rents the more your property is worth (assuming you are working on a commercial building).