In the case of single-family homes, the process of buying a run-down property, remodeling it, and then selling it for profit, is commonly referred to as fix-and-flip. Your sweat equity and ability to see a diamond in the rough is rewarded monetarily, and the new owner gets an updated, move-in ready home.

Value-add multifamily real estate deals follow a similar model, but on a massive scale. Hundreds of units get renovated over years at a time instead of just one single-family home over a few months.

A great value-add property may have peeling paint, outdated appliances, or overgrown landscaping, which all affect the curb appeal and the initial impression that a potential renter will form. Simple, cosmetic upgrades can attract more qualified renters and increase the income the property produces.

In value-add properties, improvements have two goals:

1. To improve the unit and the community (positively impact tenants)
2. To increase the bottom line (positively impact the investors)

Value-Add Examples

Common value-add renovations can include individual unit upgrades, such as:

• Fresh paint
• New cabinets
• New countertops
• New appliances
• New flooring
• Upgraded fixtures

In addition, adding value to exteriors and shared spaces often helps to increase the sense of community:

• Fresh paint on building exteriors
• New signage
• Landscaping
• Dog parks
• Gyms
• Pools
• Clubhouse
• Playgrounds
• Covered parking
• Shared spaces (BBQ pit, picnic area, etc.)

On top of all that, adding value can also take the form of increasing efficiencies:

1. Green initiatives to decrease utility costs
2. Shared cable and internet
3. Reducing expenses

Right on.  

p.s.  I love the smell of cat urine in a house for sale. 

@Terrell Garren haha Is that the smell of opportunity?