When you’re investing in multifamily properties, the top priority is to boost Net Operating Income (NOI) so your investment is more profitable. Basically, this means lowering overhead costs and increasing the value of the property. Of course, it isn’t something you can magically do overnight. Maximizing your multifamily investment will take some time and planning, but the results are certainly worth it. Here are a few ways to dive right in:
Get Your Tools Out
If your building is a bit outdated and could use some cosmetic touches, doing some minor remodeling can help attract tenants and pave the way for a rent increase. An outdated property will yield rents that are in between current rates and the rates of the building’s original era. Upgrading those units with modern fixtures and appliances and improving the facade will allow you to command rents that are closer to the current rates in the market.
Boost The Square Footage For Rent
You can boost a multifamily NOI by increasing the amount of square footage available for rent. If, for example, you have large common areas, it can be tough to capture the value of those spaces in your rents. If you have an unused area for storage in the building, you can open that into another unit to increase that unit’s size and rent, or you can make that a new unit. Whatever you do, make sure those areas are up to the residential rental codes before you let a tenant live there.
Fill Vacancies Fast
Any empty unit you have in your building right now is revenue you are losing daily. Get a plan in place to deal with vacancies as soon as they arise. If you don’t have a person on your team dedicated to marketing and leasing, now is the time to fill that void.
Become More Energy-Efficient
Utilities tend to be a large part of a building’s operating costs, You can lower these expenses and make the property more appealing overall by boosting your multifamily energy efficiency. Water-saving appliances, efficient lighting, better insulation and solar panels will benefit your tenants, boost your property’s value and improve your bottom line.
It will take vision and strategy to increase the NOI of your property and maximize your investment. By upgrading your building, getting vacancies filled and lowering your overhead costs, you can raise the value of your property and improve your return at the same time.