Multi Family Value add list

[Dennis Williams]

Hello BP members!! Just wanted to start this forum for new and seasoned multi-family investors. Base on your experience, what value adds do you look for when evaluating a multi-family property?

For example (try  not to repeat the items listed below):

- Laundry room or add washer/dryer in each unit

- New roof

- Individually meter each unit electric/water

- Add small park

- Update curb appeal to include paint.

- Add small workout gym to leasing office

- Update pool area with pavers and outdoor furniture

-- List yours below --

[Hadar Orkibi]

Some of the Items you mentioned are good way to add value, but are not key factors.

Main key factors i can think of right now are:

1. Clean up the property.

2. Change the tenant base.

3. Increase rents - this is probably the easiest and #1 factor. if you fined an under rented property and have the opportunity to increase rent you are on winner.

[Henry LiChi]

Value add to me are items that will actually raise rent or lower expenses that ultimately raise the NOI.

- Reducing utility expenses through either separating meters or if you can’t, convert all fixtures to low flow. Low flow toilets, shower heads, aerators for both kitchen and bathroom faucet. Change all light bulbs in common area to LED.
- Better property management
- Communal laundry for additional income
- Renovating common areas
- Rehabbing units as they become vacant to raise rents

[Henri Meli]

If you consider as value-add, anything that lowers the expenses and add to the income (at reasonable costs)

You could add storage area

Paid preferred parking (depend on area)

Billboard with ads on the property (depends on property)

Energy efficiency /Utility efficiency (common areas/responsibility of owner)

Coin operated beverage machines

[Mike Taravella]

Hello Dennis Williams

I think the previous posts about having high efficiency appliances and storage are huge value adds for a multifamily unit.

I think partnering with local businesses to showcase a sense of community could be an interesting way to leverage the common areas, such as fruit markets, coffee tastings, or other communal activities. Could charge the business rent for the space for the event and proceeds and brings everyone together.

[Rod Khleif]

@Dennis Williams

Hi Dennis, great list you started and others have added onto. A few things I'd add to it are:

- Pet deposits & pet rent

- Reduce turn time

- Add washer & dryer hookups if possible

- Covered parking

- Depending on the location & market; rent one unit as a short term rental

- Reducing common area electric

[Todd Dexheimer]

@Dennis Williams one of the biggest value adds, especially in A and B areas will be the amenity packages. People will pay more for the bells and whistles. The bigger property you have, the easier this is to accomplish. Putting $500k in the amenities on a 500 unit complex is only $1000/unit, which is easy to justify, but $500k on a 50 unit is going to be hard to justify. 

[Dennis Williams]

@Hadar Orkibi

@Henry LiChi

@Henri Meli

@Mike Taravella

@Rod Khleif

@Todd Dexheimer

Excellent value add guys.  I think this is a good start.   Thanks for being open to share a few items you feel are good value add opportunities.  If you think of anything else, feel free to add on.  The goal is to get the list big enough that it helps anyone that is looking to buy deals and may not have thought of the items listed.

[Amy Hu]

Originally posted by @Henri Meli:

If you consider as value-add, anything that lowers the expenses and add to the income (at reasonable costs)

You could add storage area

Paid preferred parking (depend on area)

Billboard with ads on the property (depends on property)

Energy efficiency /Utility efficiency (common areas/responsibility of owner)

Coin operated beverage machines

I'd love to find out more about the storage area. Has anyone done that?

There's a small unit in our apartment building, no kitchen. I wonder if I could turn it into storage. If so, how?

any suggestions would be appreciated. thanks