Improving your multifamily asset’s curb appeal leaves a lasting impression with prospective buyers and tenants. A good first impression often equates to higher property value and helps achieve higher rents. Tactics like slapping a coat of paint on and erecting trendy fencing give you the biggest “bang for your buck.” Whether you’re preparing your property for sale or lease, the maxim holds true - first impressions are everything!
PRE-RENOVATION (scroll down for post-renovation photo):
I know this because I’ve done it: I previously managed and completed value-add renovations for a private equity group with 322 apartment units across 7 complexes. In fact, an updated exterior can achieve a 5-10% higher premium sale price and 10-20% higher asking rent.
There are a number of ways to accentuate your property’s appearance in a cost effective manner:
Paint: A new paint job can work wonders for your property. If this is outside of your budget, you can alternatively power wash the exterior to get rid of dust and dirt.
Recommendation: use a color scheme that compliments other aspects of your property’s curb appeal.
Landscaping: Fresh, mature landscaping will make a dramatic difference. Investors appreciate an artful touch. Tenants also appreciate landscaping, potentially equating to higher occupancy and less turnover.
Recommendation: drought-tolerant/resistant plants, rocks, bark mulch, and a low maintenance sprinkler systems are ideal. Some cities even have tax incentives on these types of drought-tolerant plants.
Fencing: A new stained fence, complimented by a new paint job and landscaping, can be relatively inexpensive and provide an aesthetically pleasing finish to the perimeter of your property and tenants’ backyards.
Recommendation: wood panel fencing with a stained finish or vinyl fencing throughout the entire property.
Slurry Seal and Striping: Again, both tenants and investors love this. And it's a small input with huge output in terms of value.
Recommendation: hiring a licensed, reputable paving contractor to slurry the parking area, fill all potholes, re-stripe parking stalls and install new parking stops.
Signage and Title: This tends to relate mostly to larger buildings in the 10+ unit range. A new sign brings character to your building and giving it a name creates a “brand” for your building. You’ll have a differentiated rental product in the market, so prospective tenants can easily identify the property instead of having to memorize a random address. Signage improves branding, and good branding improves rents and increases leasing lead capture.
Recommendation: a specific name that appeals to your target tenant demographic. A state-of-the-art monument sign would be appropriate for 20+ units, and a smaller wood frame sign for anything less.
Double-Pane Windows: You may need permits for this. Check with the city building department or your contractor for advice on pulling permits for windows. Though somewhat more expensive than the items mentioned above, double-pane windows radiate the aura of a meticulously managed multifamily property. Also, double-pane windows are energy efficient. This allows leasing managers to communicate these benefits and up-sell prospective tenants on lower energy bills.
Recommendation: consult with a contractor to get a quote, but usually the range will be $450-$600 per window for parts and labor.
BONUS: Update the laundry room and lease the machines! A nicely remodeled laundry room can be done hassle-free, and usually without permits. Tenants value a refurbished laundry. So do prospective buyers. Also, with a lease you can set up direct deposit and do not have to worry about maintenance and collections.
Recommendation: replacing the flooring, washer and dryer, and painting the interior.
DOUBLE-BONUS: Get a line of credit! You can usually finance all of these repairs through a line of credit or second-position loan.
Recommendation: give us a call for referrals to private and local lenders.
POST-RENOVATION:
Needless to say, minimal investment in updated curb appeal benefits multifamily owners in many ways. You’ll put more money in your pocket with less turnover and higher occupancy with happy tenants. Planning to refinance? Landlords will benefit from potentially increasing the appraisal value, thereby creating more incentive for lenders to increase LTV. And, although we’re experiencing a hot seller’s market with AS-IS purchases being commonplace, increased curb appeal certainly won’t diminish your chances of netting the highest sale price.
