I’m down in North Carolina giving a tour of the 198-unit building that we just purchased. I’m going to show you three easy and simple renovations that we’re implementing to increase the value of this property.
Keep in mind that these same renovation techniques can be used on smaller multifamily properties as well.
Related: How to Beat the Coming Housing Slowdown With a Value-Add Multifamily
3 Easy Multifamily Renovations That Give the Best Bang for Your Buck
1. Make exterior renovations to improve curb appeal.
Making small improvement like paint and new landscaping will give your property curb appeal. As the saying goes, “You never get a second chance to make a first impression.” Well, we believe that making that first impression will spark interest and desire for potential new tenants to want to move into our properties.
2. Add new flooring to create that “wow” factor.
Adding new floors is an easy way to create that “wow” factor when new potential tenants walk into the unit. This is a simple method to impress new tenants and provide that new, modern look and the feeling of easy maintenance. The type of flooring that we use is laminate vinyl planks.
3. Opt for new appliances.
Let’s face it, people want new. By adding a new appliance package to your kitchens, will you be able to command more rent and become the best choice for new potential tenants. This simple addition can command you anywhere from $50-$100 extra per unit, creating a great return on investment.
In today’s video, I share more about these three renovation tips as I walk through our newly purchased apartment building. I would love to get into a discussion with you, as always!
What are the most important renovations you implement with your multifamily properties? What has worked? What has not worked?
Thanks for watching!
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35 Comments
Great advice Matt.
We have been big fans or the luxury vinyl plank in our units. Long life, great ROI, tenants love it and extremely low maintenance. We put it in every new investment we purchase.
Agree on exterior updates too. We just focus on single family but all of your advice applies in that area too. We pay the nominal cost to have service contractors provide weed/feed services on our yards and they always are the best looking on the block. Great looking, well maintained properties usually attract better tenants too.
With SS appliances basically on par with black/white on cost now we will typically go SS when appropriate.
In addition we have been renovating our properties one-by one with all LED light fixtures. Tenants love the cost savings and it helps save us a little utility cost when vacant too. They look great too.
Lastly we tend to update kitchen counters to granite, or at least a nice looking Ikea style modern laminate, and sometimes paint cabinets and change hardware to give a newer modern look.
Hey Deryk,
Great tips. You had me till you said Granite countertops LOL! I’ve never gone there as I’m concerned that the tenants can damage them beyond repair and also beyond what their security deposit can handle. Have you ever had this problem?
Matt
How is it possible to damage a rock? LOL Sorry, I couldn’t resist.
You… Very funny. They are not damaging the stone itself, it’s the coating thats on the outside of it. The coating is there because the stone has pores, which will soak up liquid and stain. If they put a pot of boiling water on it they can burn off that coating, then any liquid will stain the stone.
But I like the thought of a tenant taking a hammer to it and trying to actually damage it physically lol.
Matt
Hi,
I only install granite countertops in my B-C rentals. I have found them extremely durable, and they definitely set our units apart from the market.
I appreciate the information about using luxury vinyl plank flooring. Had not thought of this but will certainly look into it.
You are welcome Marjorie!
Would have loved to see a before and after of the exterior to get a feel for what “make it pop” means to you.
Thanks Bernard, I will have to post and update when the exterior renovations are done!
Thanks for the great tips. I have just started using the LVP in some of my 2 bedroom units. So far, I have only done first floor units. Do you use it in second floor units and if so, have you had any issues with noise complaints from the tenant below? Thank you.
Hey Tracey,
We do use it on the 2nd floor units but we make sure that the subfloor is solid first, and we only install in the common areas not the bedrooms.
Matt
Hi Matt,
So what kind of flooring do you use for bedrooms? And what about bathrooms? What kind of flooring do you use there? Thanks.
Hey Pinaki,
Good question!
We use a thick multi colored carpet in the bedrooms and the same vinyl tile in the baths, because it’s waterproof.
Matt
Love LVP! Why not install LVP throughtout? Wouldn’t it lower costs on turnover in the long run? Pros vs Cons? What’s your thoughts?
Hey Matthew,
The LVP is more expensive than carpet and we had to trim the budget a bit. Also, tenants tend to complain about cold surfaces in their bedroom, especially when it’s chilly out!
That said, you are correct that the turn costs will be less in the long run but we are limiting the carpet to the areas that get the least amount of stains and traffic, just the bedrooms. The hallways and dining area get all the abuse, we use LVP there.
Matt
Great tips. Would you be willing to provide a few more specific examples of the numbers on business plan? For example, we put X amount in per unit(with breakdown of what) and expect to increase rents by X amount?
Hey Bill,
Here are some rough numbers:
Total renovations were $8800 per unit including interior and exterior renovations, plus amenities
$1,742,000 in total renovations
Rent increase on average will be $140 per month per door, x 198 doors = $27,720 per month or $332,640 per year in increased revenue
at a 7% Cap Rate that equates to a building value increase of $4,752,000.
Once all renovations are complete we will refinance to recapture the construction costs and part of investor equity which will be returned to them to increase their IRR.
Matt
Good stuff! I’d love (as mentioned above) to see an ‘after’ video on the exterior, see the changes, cost, before rent amount, after, ect. Thanks!
Stay tuned Eric!
Love your videos, alway good information. One thing I would add with the appliance package is to change the doors on the refrigerator, so they open to the kitchen side. Most of that style refrigerator has reversible doors.
Hey Judy,
Good point, I didn’t notice that! I will let our team know to turn the doors around.
Matt
Those apartments look familiar! I live in Fayetteville and believe they are the Glendale Townhomes. I live close by and jog by them daily. They are in a great location with some of the best schools in the district.
Would you mind telling me how you acquired them? I hadn’t seen them on Loopnet or the MLS.
Good luck and if you need a contact in Fayetteville let me know!
Hey Carl,
They were on Loopnet briefly but mostly circulated by the broker I work with.
I will shoot you a PM with more info.
Matt
Matt,
I was actually going to say the same. I have been looking at investment opportunities in North Carolina for a client for a couple months now and did not see this come on Loopnet. If you have any suggestions for mixed use or multifamily properties it would be much appreciated.
Jake
Great video Matt!
Thanks Andrew! Hope you are well.
Great information and very true…
Thanks Alex!
Thanks, Matt.
Just did my first deal (14 units) in Winston Salem, NC. Doing everything that you are suggesting!
Happy to know you’re doing deals in my home state.
Peter
Peter,
Will you share your lender with me? I tried to do a deal on a 17 Unit as a first deal and lenders told me that I needed to get experience with single-family homes or smaller multifamily.
Matt,
Great info and video on maximizing rehab dollars….remodeled unit looks awesome as well!
When you are getting your appliance package discounts are you going though a big box store like Home Depot or HD Supply or some other route? Same with flooring?
Stephen
Hi Matt,
Love the info. Who do you use for large flooring buys and appliance packages.
Jerrie
Just joined BP,
Have enjoyed your video. Great take aways. I’m into SFH.
Jon
Berks County PA
Great article! Do you provide your tenants will all of the appliances they need or do you have them bring some of their own?
We always give a full appliance package in the kitchen, but normally don’t give a washer or dryer. We do lease them back to the tenants on larger sites.