UPGRADE PARKING
SET RENTS AT MARKET RATE
One simple yet overlooked way for a landlord to increase the value of a multifamily property is to ensure to collect at or above market rents for each unit. The purchase price of an investment property is largely dependent on the actual cap rate, cash-on-cash return, and overall cash flow. The number one method for increasing all three, while improving the appeal of the property, is to collect maximum rental income.
One of the least-considered areas of an apartment building is the parking garage. It’s typically dark and damp, and there are always pipes leaking onto your freshly washed car. To increase the value of your property, consider spending some effort making this under-appreciated space more appealing. For example:
✓ Fix leaks ✓ Use walls other than cement block ✓ Install appropriate lighting ✓ Paint fresh lines ✓ Provide proper security
There are two ways to make this happen quickly and effectively:
1. Raise rent to market rate upon lease renewals of existing tenants. If the tenant won’t pay, vacate the unit and find a new tenant that will. 2. Improve the condition of the units themselves during periods of tenant turnover to maximize what a new tenant will pay for the renovated unit. Increasing rental income from $3,000 to $4,500 for a multifamily property will increase the value exponentially.
To directly affect value, consider ways to use this as revenue-generating square footage. If the parking is “open,” consider offering “premium reserved parking” areas close to the elevators or stairs for a monthly fee. In the world of ridesharing, many spaces are left permanently empty. Utilize one or two rows and convert them into cages/storage units for rent to tenants - everyone loves extra storage! Turning this typical eyesore into a profit center will drive cash directly to your bottom line.
Casey Denby Real Estate Investor
Allen Artcliff-Cronrod AAOA Brokerage California Connect with Allen
Author of How to WIN In Rental Real Estate AFTER The Deal Read Casey’s Book
PAGE 42
Powered by FlippingBook