When you look at your renovation budget, you want to spend it in a place that will give you the most value for your money. You want to research the most popular amenities renters are looking for and update your units so you can charge competitive rents. At the same time, rents just aren’t rising as fast as they did in 2012, so your window to raise rents post-renovation is diminishing. So which renovations will give you the most impact? Multifamily Executive’s Apartment Renovation Index (ARI) survey examined how multifamily companies are strategically updating to attract renters and drive rent growth.
According to the survey results, renovators are updating the following items to make properties more memorable and appealing to prospective renters:
- Stainless steel appliances
- Fresh color schemes
- Updated kitchens
- Common spaces
Use small-scale renovations to appeal to the average population. In the post-recession economy, not everyone is looking to rent in a luxury apartment community. There’s a large group of renters who are looking for average units that work with their budgets, not brand-new apartments with over-the-top amenities. If you have an outdated apartment building seeing sluggish vacancy rates, take a look at your renovation options to determine what will help you compete with other communities at your price point.
Adding new landscaping, workout machines, or a wireless café can help update a property without costing too much. A new coat of paint gives the building a facelift at a minimal cost. Buying new appliances on a large scale is also cost-effective while having a huge impact on the appeal of individual units.
Completing large-scale renovations where you’ll end up raising rents by $100-$300 presents higher risk for tenant churn. By focusing on updating one area of the property really well, you can raise the rent by a smaller increment, maintaining occupancy rates, while also gaining the ability to “wow” prospects with great common areas or apartment kitchens. Focus on specific areas of your property you can update that will make the biggest difference.
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