The Return of the Value-Add Strategy

Let's talk about value-add.

After a few challenging years of higher interest rates, rising insurance and construction costs, and tighter underwriting, we're starting to see investors take another look at value-add multifamily opportunities.

Berkadia's 2026 Multifamily Investor Sentiment Survey found that Value-Add and Core-Plus were tied as the strategies investors considered most attractive for risk-adjusted returns. The survey also found that 72% of investors planned to moderately expand their portfolios.

So, is value-add coming back?

Maybe. But there's another question that's even more important:

Can you actually execute the plan you're underwriting?

It's Easy to Make a Renovation Look Good on Paper

Walk into an older property and it's easy to start making a list. New kitchens. New flooring. Updated amenities. Better landscaping. New signage. But should you do all of it?

Not necessarily.

Value-add isn't about spending the most money. It's about figuring out which improvements will actually make a difference to residents, leasing, and the property's overall performance.

Every property is different.

Then Construction Starts...

This is where things can change quickly.

You may uncover water damage, outdated electrical or plumbing systems, roof problems, code requirements, material delays, or other issues that weren't obvious during the initial walkthrough.

That's why understanding the property's condition before finalizing the renovation budget is so important.

And don't forget about time.

If a unit was supposed to take 20 days to renovate but takes 45, those extra 25 days can mean lost rental income. The same applies to delayed amenities, tenant improvements, or other revenue-producing spaces.

The construction schedule is part of the investment strategy.

Ask the Questions Before You Spend the Money

Before moving forward, ask:

• What really needs to be fixed?

• What improvements will residents actually value?

• What will the work realistically cost?

• How long will it take?

• What could go wrong?

• Does the expected return justify the investment?

Those questions may not be exciting, but they're important.

Because there's a big difference between saying, "We think we can increase the value of this property," and having a realistic plan for how you're going to do it.

The opportunity isn't just in buying a value-add property. It's in being able to execute the plan.