Beyond selling your property, there are other reasons to get an appraisal such as refinancing, appealing tax assessments, or applying for other loans. Before getting a an appraisal, you may want to work on strategies to raise your multifamily property’s value so that you can get the best price for selling or get the best loan terms when refinancing.

The best part is that working to increase property values doesn’t only mean potential profit in the event you sell, but it could also lead to making your property more attractive to tenants which translates to increased cash flow and higher levels of profitability. Here’s how to increase property values for multifamily properties:

1. Make aesthetic improvements to add curb appeal

Making aesthetic improvements go beyond focusing on necessary repairs such as cracks in the floors in public areas. Think about curb appeal and the visual that welcomes tenants and visitors as they drive up to the property and walk into the common areas. New paint is one of the simplest ways to freshen up the property. Considering installing new siding. Other ways to give your property a cosmetic makeover are through attractive lighting and landscaping.

2. Offer Amenities That Can Increase Income or Lower Expenses

A smart landlord will keep an eye out for changing trends in apartment rentals. For instance, 20 years ago dishwashers were very popular in units; however, recent trends show that renters prefer to have in-unit laundry instead of dishwashers. If a unit has a dishwasher already, it is easy to replace that with a self-venting washer/dryer, and most tenants are willing to pay an additional $25-$35 / month to have this amenity. The one time cost of the machines with installation is about $1,500, but the increase in value to the property based upon an average CAP Rate of 5.0% is $6,000 to $8,400.

Updating major appliances so that they are more efficient can save you money, and at the same time due to the positive impact in your NOI increase the value of the property as well.

3. Renovate or freshen up interior units

At some point, you should also make improvements to the interiors of each apartment. For obvious reasons, you may have to wait until tenants have vacated – allowing you to give each unit a fresh coat of paint. Replace or fix anything that’s broken or worn down, such as flooring, hinges, door knobs, and handles. Consider replacing aging windows, which are not only unsafe but can waste energy. Replace old and yellowed electrical outlets, switches, and plates.

If your units have carpeting, assess their condition. Some carpets will only require a thorough cleaning by a professional carpet cleaning service while other carpets may need to be completely removed and replaced due to excessive staining and age. Rather than completely renovating kitchens, consider replacing or refacing old cabinet doors. Dingy bathrooms should be given extra attention as bathrooms are one of the first rooms that people assessing an apartment will look at. Replace old and rusty fixtures. Give tiles thorough cleaning or replace outdated tiles for a more modern look. Alternatively, you may only need to re-grout the tiles to make the floors look good as new.

When making replacements, look for items that may lower costs down the road, such as installing waterproof vinyl wood plank flooring instead of carpeting. There is a less chance of damage, and instead of having to replace an entire room if it is damaged, you can just replace the plank that was damaged.

3. Reduce Expenses

Consider items that can lower your expenses. Installing solar panels provides benefits for both property owners and tenants. You save money on energy and pass down these savings to your tenants. You also increase your attractiveness to potential renters and buyers who value eco-friendly practices.

Pass-through other expenses as leases come due. For instance, many properties sub-meter the water use (typically one water main, so historically owners have paid this bill 100%). By sub-metering the unit, the tenant is now responsible to pay for their actual water use, which in turn will likely cut the overall water use down, but also save the landlord on their monthly operating costs, thereby impacting the value and NOI positively.

For other tactics on increasing the value of a property, please do not hesitate to reach out to info@cbicommercial.com.