Multifamily Investing: Updating an Older Property for Maximum Profit

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Multifamily investing has never been hotter.  Multifamily apartments that are in great condition are fetching some of the highest prices seen in years.  On the other hand, older dated properties are selling at much lower rates.  If you have an older apartment complex that has become a little dated, now is the time to consider making some strategic upgrades.  It’s time to focus on upgrades that will deliver a big bang for your buck in both rental rates and sales price (when you decide to sell).

However, not all upgrades are equal.  You want to consider upgrades that will give you the highest return and maximize your property’s value.  Before you get started, remember to do your research.  Make sure the enhancements you do are appropriate for your area, tenant base, and property. You need to know what will make the biggest impact in your area.

We’ve put together a list of 5 upgrades that should be considered for your multifamily apartments.  These enhancements have been proven to refresh an older complex and deliver a high return for your investment dollar.

5 Essential Upgrades to Your Multifamily Properties

  1. Paint – There is no other single item that can dramatically change the look and feel of your property for less money than new paint.  Adding color to the interior or exterior of the complex can make your apartments feel fresh, new, and cared for.  It can bring new life to any property, and your tenants and prospective tenants will notice it.  Pick colors that fit your area and that are soothing to your tenants.
  2. Appliances – Residents love new appliances.  If you have old and dated appliances, consider replacing them.  It’s not uncommon for apartments with new or upgraded appliances such as stainless steel or black to fetch a premium rental rate.
  3. Fixtures – Some of the most subtle and inexpensive items that you can upgrade are the fixtures: lights, pulls and knobs, doorknobs, and towel bars.  These items can be very inexpensive, but can deliver a lot of impact.  They can make it easier to lease your apartments and get more money from them.  Nothing says dated like brass.  Consider changing from dated brass to stainless steel, satin nickel, or oil-rubbed bronze.
  4. Countertops or backsplashes – Avocado countertops and dated backsplash colors are also items that can quickly date a property.  Consider changing them out to modern, neutral colors and you’ll be amazed at the transformation.  Both of these items can cost very little to change, but your tenants will love them.
  5. Common area amenities – Here is where you can make a big impact by doing small things.  Consider changing a dated courtyard to a new fire pit or fireplace.  Supplement the old landscaping with new modern plants and color.  Consider changing out the old playground equipment for newer equipment, or adding new planters and chairs to the pool area.  These upgrades can be very cost effective, and really improve the look and feel of your complex.

Now is the time to take advantage of strong multifamily market fundamentals.  But, to do that, you need to maximize your investment.  If your property has become a little dated over the years, it’s a great time to consider a little updating.  These upgrades will allow you to enhance your rental income as well as deliver the highest purchase price when you sell.  Focusing on enhancements that will deliver the best bang for your buck will have your tenants, your property, and your billfold thanking you.  They will also allow you to maximize your property’s value in a hot multifamily market.

Photo: Dieter Weinelt

About Author

Spencer Cullor

Spencer Cullor has spent the last 10 years as a real estate investor and currently owns single family, multifamily apartments, and commercial properties with his investment partners. Currently he is the Director of Acquisitions and Principal of ApartmentVestors, a multifamily real estate investment company.


  1. Steve Sutton on

    Hi Spencer,

    What we have notice is business centers tend to really boost up the upgrade to a property. Adding 4 to 5 desktops with control access does wonders in the attraction of new tenants and the retention rate of current tenants. Offering wireless in the community definitely attracts the facebook users, techies and general surfers to the community. I am amazed at the simple choices people make to acquire housing. Great article, Spencer.

      • Steve Sutton on

        Wireless at the pool is definitely a good idea. Spencer, Have you seen these electrical chargers for cars. I happened to see them downtown and I am wondering has anyone tried adding these installations to multifamily. It could be a potential way to increase the NOI in green multifamily projects now or in the near future. Possible grant funding for them too.

        • I have seen them, but we wouldn’t consider them here in KS and MO. I think they might make sense in CA, but it all depends on your local area. Something to definitely keep an eye on.

  2. Hey Spencer,

    Good article.Doing those items will help keep the occupancy up and choose from the best tenants.

    How is the KS and MO market?? I am doing great here in Georgia brokering multifamily deals.I will say that when you go to sell and astute buyer will look past the cheap upgrades to extract a higher price and will pay more attention to the mechanical systems,parking lots,structure,and other big ticket items.Occasionally a newbie buyer will gloss over these things and the seller will get lucky and land a higher price and the buyer will take a huge cash hit down the road.The sellers are always praying for that uneducated buyer!! LOL

    • The KS and MO multifamily markets have been really solid. We’ve had some decent rent growth and occupancy is very high. Glad to hear things are going well in Georgia as well.

      You’re right, the more astute buyer would rather have the bigger items upgraded and you should definitely look at doing both. The more visual things tend to raise rents more, but the bigger structural and mechanical things can get you a lower cap rate when you go to sell. It’s always a nice balancing act.

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