You just won the bid on that property you’ve been working towards for the past few months, so what’s the next step? Well, first you celebrate, because it’s no small feat beating the competition to become the new owner(s) of a multifamily property. Once you’ve toasted to your hard-fought victory, it’s time to start making the most of your investment. The most important factor in maximizing return on investment is increasing the value of your property as much as possible.
Looking at it from the most simplistic standpoint, value is affected in two ways: Increasing income and/or decreasing expenses. Having said that, there are an abundance of ways to maximize your property’s income and minimize its required expenses. The most successful properties simultaneously and efficiently achieve both of these goals.
A good starting point to raise the value of your new property is making minor repairs and improvements you noticed when you initially toured the property. Improvements like fixing cracks in sidewalks, replaces window screens, or repainting doors or balconies will give your property the face lift it needs to rejuvenate its curb appeal. This can be an inexpensive way of increasing the marketability of your property and a stepping stone to greater improvements that will elevate it a new level of value.
When it comes to decreasing expenses, one of our first courses of action is implementing water conservation. Toilets use the most water out of all the bathroom fixtures, so installing low-flow toilets can save property owners a fortune in utilities. Also, toilets tend to leak, so proactive maintenance will save money in the long run.
In addition to water conservation, employing the right amount of staff is very important. Employing too many people can be a waste of man power and capital, so don’t be afraid to layoff a few employees if the property doesn’t benefit from their presence. Furthermore, hiring the right employees can greatly increase your properties value. For example, hiring a maintenance crew with a diversity of skills has multiple advantages. Most importantly, a multi-skilled maintenance crew reduces the need of deferred maintenance, thus, lowering overall property expenses. Additionally, being able to perform in-house maintenance means repairs and improvements can be completed much faster.
This post is meant to merely touch on a few examples of increasing value through increased income and decreased expenses, so keep an eye out for our upcoming blog posts as we will be discussing maximizing incomes and minimizing expenses in greater detail.