The multifamily industry serves millions of people annually and is on track to continue its growth thanks to two major demographics: Millennials, who are delaying the purchase of their first home, and Baby Boomers, who are downsizing. As new multifamily properties pop up across the country to service the growing need, existing properties are faced with the challenge of competing with their newer, more updated counterparts.
Renovating an existing multifamily unit is no small task. There are many pieces to the puzzle that require consideration including your target demographic, trends in your area, current Net Operating Income and the availability of capital to make the improvements and expected Return on Investments for each renovation project.
When identifying a renovation strategy, the ultimate goal should include increased rents, increased demand, and longer, lower turnover. Individual unit renovations to kitchens, baths and flooring heavily contribute to your ability to fetch higher rents. Other property renovations that increase curb appeal and separate you from the competition include clubhouse improvements, fitness centers, pet friendly amenities, and technology. These types of improvements help increase demand, as well as tenant satisfaction, which results in lower turnover.