How to add value to a multifamily property?
Everybody, Real Estate and Property Management here again today. And today we’re actually going to be going over how we add value to the multifamily property. Right. One of our specialties and our actual specialty is multifamily real estate here in Bakersfield, California. And basically what we’re looking at today is how can we add values to properties that we purchased their multifamily and specifically we’re looking more into the five-plus unit so commercial multifamily aspect, versus the two four-unit.
Right. So, one of the greatest ways to do that when you’re looking at a five-plus unit property is to actually just increase your net operating income, right. If we can increase rents that increase our net operating income if we decrease expenses that again, increases our net operating income. There could be a chance we can combine both where we increase income and decrease expenses and it obviously looks much better.
And there are many ways to do that it just depends on the property. Right. So in some cases, you may have a mom and papa owner who haven’t raised the rents in 7-8-10 years, or at least not significantly right. While on the other side. You may have owners who are paying for, you know, extremely expensive expenses meaning they’re paying for power when that power could be split in charge against two tenants right so they can recoup that expense.
They may be paying for water in some cases where you can split that and reduce that expense as well. There are many different ways that we can look at, you know, bringing the expenses back down right so landscaping could be a good example. We tend to just hire a landscaper and once he’s hired, he stays there as long as the property’s there right and he’s doing a good job.
But in some cases, you may be able to find new landscapers who will give you a better deal and do the same amount of work if not better. Again, looking at the expenses. So that’s one way to add value to your property, increase your income, decrease your expenses. The goal is to increase the net operating income of the property.
The second way to add value to a property is to actually create a more secure environment for the people living in that property, and especially in some properties where the neighborhoods may not be as wholesome as other properties, right.
So, if you have a property that is maybe a little bit more prone to getting broken into or having problems with things being stolen from the outside or things like that then maybe adding a little bit more exterior lighting. Maybe adding a little ring doorbell feature for the tenants if they would like that right maybe adding, you know, a few of those security measures to make sure that the tenants feel safe, definitely will go a long way to make sure that your tenants are taking care of your property. They know that they have something where they can feel safe in a neighborhood that may not be so safe, and it makes them stay a little bit longer as well. It gives a good sense of security.
Right. And then finally, you know, for one, finally, but as a third criteria. So the final criteria for this video at least we’re going to be looking at. Basically, not only creating security but adding amenities for our tenants and adding amenities doesn’t necessarily have to cost us a lot of money doesn’t mean that we have to go for a pool, right, which could cost us 30, 40, 50 or $60,000, doesn’t mean we have to go build-out, you know, an extra bedroom, right, it could mean those things.
However, it could be something as simple as calling a laundry service to come and drop off some laundry machines and an extra room that you have. And we can create, you know an amenity for these people so they’re not having to go down to that laundromat they’re now having on-site laundry which I mean you can even make coin-operated. And now you’re earning a little bit of extra income, increasing that in a lie.
Right. Something else that can be really sought after in some areas would be to have the cleaning service come in on a regular basis right so maybe offering a couple of these side services to these tenants saying hey we have a cleaning service if you’d like them to come in, you know, it’s going to cost X dollars once a week, once a month however often they would like it.
But what that’s doing then is that’s creating kind of stickiness to your community, right, it’s making sure that those tenants are finding an experience at where they live, that is better than anywhere else they could live, allowing you to charge higher rents in keeping your tenants longer and happier so that’s essentially what we’re looking for here in synergy keep our tenants happy and keep our owners happy finding different ways to increase income decrease expenses.
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