What are ways that you guys know of to add value to apartment buildings? Here are some that I could think of:
- Increase Rents
- Add coin laundry/vending
- Pass utility expenses to tenants (add separate meters)
- Create and rent out storage areas
What are other good ways to do this?
Adding seperate meters in large buildings is often very expensive and not a really good way to raise the building price IMO. You may on a medium sized building spend tens of thousands of dollars, after spending that much money how much did you raise the building price by? Adding coin laundry will help a little but what does it really add up to per month, maybe $10 a unit or so extra income? Increasing rents has the biggest effect and unless they are currently well below market the only way you are going to easily raise them is with at least light rehab. Over time you could easily put a little work into each unit as they turn over and raise the rents after the apartment has been remodeled. Or you can raise before they get remodeled to your final price, if the tenant moves out you can remodel and rerent then, if not they are stuck paying the higher price until they move and you can remodel when they move. Btw, I’m not talking about putting stainless appliances and marble countertops in…just the basics like decent carpet and paint, painting the cabinets and maybe replacing cabinet hardware, etc. Just enough to make it look sharp. Nothing crazy, renters don’t appreciate the really nice ameneties and will just wreck it anyway.
I have created a list, however I don’t have it handy, so let me just see what I can remember.
You can create a contract with the local cable TV company. They would be the exclusive provider for your building.
Cell Towers - is your building a tall one, is there a need? Call the engineers with the large providers and find out
Billboard advertising. Is there a large section of your building that stands out for a major road? Call local billboard companies to see if they would be interested in mounting a sign on your building.
Check with local goverment about offering X % of units to Veterans, or a “class” of individuals that might qualify your building for a lower TAX or Tax exemptions.
Nice list of “outside the box” ideas. I’m sure most people have not thought of those.
For the purposes of selling an apartment buildiing it might be wise for you to consider condo-conversion.
In Edmonton, alot of people have made a killing by buyin apartment buildings and taking the necessary steps to convert them into condominums, and selling each unit individually.
The condo market has softened considerably in the US right now and finding funding to do conversions can be tough. I think your best bet for improving value would be the suggestions above. I think the one about raising the rents bears merit but you would need to rehab.