Examining the Pros and Cons of Multifamily Asset Improvement
Real estate investors are constantly looking for opportunities to increase their returns in investment. Asset improvement is one effective way to attract buyers and eventually get superior returns on the investment. Like any other investment, real estate investments too have their fair share of apprehensions, such as what if some other form of investment can give you better returns; what if it doesn’t work; or what if your projections fail? The real question that deserves your attention, however, is whether or not to reposition?
What is Multifamily Asset Improvement?
Aesthetics: Any change or improvement that enhances the aesthetic appeal of the property is worth the investment. Landscaping, upgrading interior finishes, painting the property’s exterior, and parking lot resurfacing are some of the ways investors can enhance the aesthetics of a multifamily property.
Structure: Structural improvements require strategic planning and a huge amount of money to implement. The structural improvements in a multifamily property may include mechanical systems and roof replacements, change in floor plans, individual metering of units, and building and/or renovating common area facilities such as gyms, tennis courts, and swimming pools.
Functions: Besides increasing the aesthetic value of the property, you can also upgrade your plumbing and electrical fixtures. You can replace conventional taps and bathroom flush with smart faucets to save water. Installation of various energy efficient appliances and systems will also help in a number of ways, such as attracting low energy bills for tenants, getting a competitive edge in the market, and access to huge tax rebates.
Operations: In commercial property, the changing of operations includes changing the management of the organization. In residential property, however, changing the operations may include re-tenanting the property, increasing occupancy, and incorporating additional revenue sources such as lifts, laundry facility, and covered parking.
- Increase in Income: There is a greater ability to attract and retain tenants that can pay more rent.
- Easy Management: An improved property is more likely to attract more reliable tenants, which results in various benefits such as reduced rent defaults and increased tenancy.
- Instantaneous Rise in Value: Both, the rise in income and the stabilization of functional expenses, lead to a rise in the value of the property.
- Expensive Improvements: At times, investors make improvements that not only cost them a lot but tenants can’t afford as well.
- High Cost: Major renovations can cost up to $20,000 per unit, and while the renovation work is in progress, you will have vacancies, which is all less beneficial to you.
- Redefining the Class of a Property is not always easy: Location determines the value of repositioning that can occur in a multifamily property. A property in one location cannot be repositioned to one in a different location.
Styles and trends in real estate change with time and upgrading a property is one effective way to attract renters and keep its value afloat in the market. For maximum returns on investment, note improvements that can increase your property’s value. If you’re looking for reputable asset repositioning services in TX, contact United Renovations today. For more information regarding our asset repositioning services, leave a message on our message board and one of our team members will contact you, shortly. You can also call us at (972) 432-6922.