Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
Hi Fellow Apartment Investors,
I am currently under contract on a 36 unit apartment complex in Springfield, IL. The property is a class C property, but it is 2.1 miles from the University of Illinois Springfield. The University has a large population of exchange and graduate students, and I am very interested in trying to attract them to this property. I am looking for ways to add value to the property and potentially attract a better class of tenant. Have any of you done the following, and if so how expensive/useful was it?
-Added a fenced in dog run/dog park. The property has a 2.1 acre lot, so I could easily create a fenced area to attract pet lovers.
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
8y
@John Warren You might find yourself in a catch-22 and here's what I mean. Let's see you have those Class C tenants right now. It sounds like you don't really love them. But, well, they're there and paying rent so you can't really give them the ol' boot. I've looked at two apartment buildings with either large courtyard or adjacent lot that came with the deal "free". Of course, the seller agent talks about value add with a picnic table, park-like area, play area for kids, etc. Then after talking to a few people I figure out there USED TO BE a picnic area. What happened to it? Tenants destroyed the picnic tables (who knows how)...in 30 days in one property and less than 90 on the other. I also can't fathom what having a playground would do to your insurance. Along the same lines, I can't imagine having grills with hot coals would fill an insurance company with joy either. Now to be fair, one was in an area I'd like think was C or C- and the other was maybe D+. If you have a solid "C" area and think you can really attract better tenants, surrounding buildings are nicer, etc. then you could have some value add opportunity. But if your kitchens are linoleum instead of tile (for a random example) or there are popcorn ceilings or there is wood paneling on the wall you might be able to better spend some rehab money in the units rather than on amenities.
What I think might be more attractive (with large upfront cost) is looking at how to get super duper high speed wi-fi or wired internet access for the complex. Offering a "free internet" to college students can't be a bad thing. Just make sure it can handle a bunch of 19 years old binging on Netflix at the same time. For them it's a tangible savings but maybe if you talk to the cable company or internet provider they can cut you a deal since it's 36 units.
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
8y
@Jill F. thanks so much for sharing your experience! So are you attracting some students from the University then? Are you getting better tenants because of your marketing in your opinion?
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
8y
Don't add a playground to attract College students - They will only use it when they are drunk! Add Volleyball court, pickleball court, ping pong table, pool table, wifi, cable, any type of game room, bbq grills, picnic tables, etc.
Of the current tenants, I got 1 off Craig's List (Her credit score is higher than mine- never late, plants flowers, shovels the sidewalk, recycles everything so no trash, best tenant evah!!!)
3 word of mouth (most effective-- I offer a $50 rent credit for referrals), 1 campus advertising, 2 were there when I bought the buildings in Aug. 2016. I have one vacancy which I am currently renovating. It costs me about $2000/unit. My "after rehab" cost for the units is $18,700/ unit. The apartments had been nicely maintained but the decor hadn't been updated in many, many years. I have one more to fix up and then they'll all be done. YAY! I don't have any 'bad' tenants in there right now. From campus ads, I get calls galore from May-beginning of August but not much any other time.
I'm thinking of renting the apartment I'm currently working on utilities included since I don't have house electric, gas, or water so that I can add a coin op washer/dryer in the basement.
Rental Property Investor · Providence, RI · Member since 2015 · 1k+ posts · 594 votes
8y
I would have to say the biggest thing is making sure the units are clean. First and foremost that will help you to get the better quality tenant. While I think people here have suggested some great ideas, I think those should come only after the units themselves are squared away to a caliber that can create a rental demand.
If the units aren't at that point, I wouldn't even add a dishwasher as an amenity much less a putting green, bbq, garden, or activity area. Having said that though, if it is up to snuff, a bocce court is key.