Adding value to properties for landlords and tenants

Adding value to properties for landlords and tenants

Member since 2020 · 6 posts · 1 vote

Bigger Pockets Community!

Here goes my first post. I am new in the realm of real estate investing and exactly why I am turning to you all more seasoned investors with questions. However, I can relate to most of these questions from renting properties over the years. 

So this is for all real estate owners as well as anyone who has rented or owned property before (I realize this is a majority if not all of the population.. my point exactly)


Real Estate Owners:

  • -How have you over the years tried to add value for existing and future tenants? 
  • -Has this additional value added to the property increased your cash flow on the property? 
  • -What are creative ways you all have increased cash flow to existing properties aside from updating appliances, painting, and other general internal renovations? 
  • -What are other alternative methods of increasing cash flow besides 1. increasing rents and 2. decrease property expenses? Are there even alternatives to adding cash flow to properties besides the 2 options mentioned?
  • -What are ideas you have had to try and generate more cash flow from properties with current tenants that you either have implemented or haven't over the years? If implemented did they work? Why or why not?
     

Renters:

  • -How have your landlords over the years added value to the home or apartment you were living in? Was this additional value added at no cost or did they give you the option to have it at an additional cost? 
  • -Where do you see room for landlords to add value to your current home? Is this additional amenity worth paying an additional amount for it or not?
  • -Have you had any friends or family renting that were provided with additional amenities for additional costs that you wish you could have currently? 

I know there is a lot in here but I think there is a lot of opportunities to give tenants more value to the place they call home as well as add more value to investors' bottom line. 

Thanks!

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  • Investor · New York, NY · Member since 2017 · 36 posts · 6 votes
    5y

    Marlow - these are the perfect questions to start out with, I'll share my experience as an owner. Some responses though I do believe depend on the investor strategy as well as market type (luxury, working class or somewhere in between)

    4 unit and less multifamily, and especially duplexes tend to use sale comparable, so forcing rent say 20% might be great for cash flow but may not actually affect your appraisal and potential sale value all that much. For example, I might put in new floors in my basement rental, add a washer dryer in each unit, and install other new cosmetic upgrades, which might get me 200 to 400 bucks more a month in rent (worth it here in jersey city) but my appraisal will probably not be significantly higher if I requested another.

    Now, if I legally added a bathroom or bedroom, put an addition on a house, converted a garage into livable space, ripped out all the outdated utility infrastructure or other improvement like that (things that inspectors and appraisers work with on their reports) this would definitely add value. but...it all does come down to comps. its a tricky game im still trying to figure out myself as someone prepping to flip/improve a rental for my next deal.

    Regarding cash flow increases, you could potentially rent out parking spaces or a garage if you have them available. The other option I think is obvious to refinance if you have a favorable potential gain from doing so. Another way I have increased my cash flow on a property is renting out by the room, where 2 or potentially 3 tenants live communally in one apartment. This also decreases non-payment risk, but can on the flip side add to headache if they don't get along at some point. Secondly, related to the prior strategy, I have increased cash flow on that same property of mine is renting out a bonus room to one tenant exclusively, which they utilized for an office space. 

    I hope some of this helps, and I'd be glad to learn of other individuals ways of increasing their cash flow!

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