Networx

Posted by Caryn Colgan | Sep 22, 2009

Enhancing the Value of Multifamily Properties

Raise the Value of Your Real Estate with Simple Renovations

Owners of multifamily homes want to maintain or increase the property's value for two primary reasons: to increase the sales price and to attract higher rents from stable tenants. While these property owners share some of the challenges faced by single family home owners, owners of duplexes, multiplexes and apartments face some unique issues.

Storage Areas

Curb appeal is just as important for duplexes and apartment buildings as it is for the single-family home. This is even more critical with multifamily because a messy yard disturbs not only neighbors but the other tenants of the property. Toys, bikes, or out-of-season tires stored in the yard are an eye sore for anyone. If a landlord allows one tenant to store items in common areas, it is only a matter of time before others follow their lead.

If a garage is available, hire a contractor to bump out a small locker for each unit or do it yourself. Hardware stores often sell stand-alone sheds starting in the low $300's. If your tenants still have too much stuff, direct them to a local storage facility.

Be sure to add a clause in all leases prohibiting the overnight storage of items in the yard without prior permission from you.

Soundproofing Between Units

Any landlord who has dealt with repeated noise complaints knows the value soundproofing. Vinyl sound barriers can also be installed either during construction or by retrofitting the walls and ceiling. If you own existing structures, see if thick floor coverings solve the problem before attempting the retrofit. Thick carpet and pads muffles sounds between units. Watch for sales at local flooring retailers and wholesalers. Their end cuts and remnants will save money and you don't have to worry about matching the colors between units. As a bonus, your tenants and prospective buyers will appreciate the rich feel of thicker floor covering.

Separate Utility Meters for Each Unit

Nothing will turn a potential renter off faster than having to share the cost of utilities with other tenants. Whether it is a water, gas, or electric bills, being dependent on the resource usage of others is a potential deal-breaker for tenants.

Water Meters

Water meters are generally a big deal to install. In most localities, monthly water and sewer charges are not high enough to warrant the trouble and expense of installing separate meter for each unit. Consider paying the bill yourself and raising the rent by the average monthly cost.

Gas and Electric Meters

Due to their hazardous nature, power meters should either be installed by employees or contractors certified by the local power company. Often a permit is required but the installer will generally be able to pull it for you.

While they can be pricey at around $2,000 per box, separate gas and electric meters will make tenants responsible for their own usage and add to the property's value to investors.

By investing some money in the multifamily property, landlords can enhance its appeal to current and prospective renters while they increase its value to future investors. Any landlord knows: happy tenants pay the rent.

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