Adding Value to an Apartment Building
You may wonder about the fact investors’ interest in buying multifamily homes rather going for the single family buildings. There are several reasons for it but the major one is that investors can control the amount of income that comes from multifamily homes. Having that said, if you have a 5-unit multifamily apartment, you can control your income with greater predictability as compared to single family homes and small multifamily building which consist of 2 – 4 units.
If you have an apartment building and you want to increase your income, you will have to show your creativity skills.
Here, it is worth mentioning the types of properties based on the ways they can be valued.
First type of properties involves the smaller ones which mainly include buildings with 2 – 4 units. The value of this type of properties is based on the value of other buildings of same type in the locality. For instance, if you have a property with 2 bedrooms and 2 bathrooms and there is another property, having same criteria as that of your building, in your locality being sold, the value of your property would be the same as that of the property being sold. Hence, you will need to do a bit of research in order to value your property accurately.
Valuing a 5-unit apartment building is a different game. These properties are valued based on the income they generate. To value to the property, you will first need to determine the net operating income (NOI). Then you will need to divide this NOI by the capitalization rate of the area. This is how you can value your property.
Adding value to the property
You will surely like to add value to your property in order to earn something you can call a handsome profit. Consider following things if you want to add value to your apartment building.
1. Sub-metering the apartment building in order to know about the usage of utilities is first and foremost thing you need to do in order to add value to your property.
2. Establishing fully functioning laundry rooms in the apartment building can save you good amount of money on monthly basis.
3. Remember, you can make your properties valuable if you work on energy efficient options. Therefore, you need to add LED lighting in the units of your apartment building.
4. You can give your tenants the paid facility to park their cars by establishing a garage. The benefit of adding a garage is that your building will have an added attraction for the prospective tenants.
5. One of the most conventional ways to add value to the property is to renovate it. the interiors of your apartment building lay big impression to the visitors who look for the apart units for rent. Furthermore, make sure that you have improved the curb appeal of your home.