From “dated” to “desirable”: Why renovations are smart investments for multifamily properties
According to Rent Cafe, 55% of multifamily properties in the US are more than 30 years old. While multifamily renovation is a significant investment, upgrading your property can increase its value, reduce maintenance costs and boost tenant satisfaction. After 35 years in the commercial design business, Mitsch Design has completed dozens of multifamily renovations across the country. Here’s what we’ve learned.
1. Increased Resident Retention
Modernizing multifamily interiors enhances the living experience, making residents more likely to renew their leases. Updated amenity spaces such as clubrooms, coworking spaces and fitness facilities make a big impact for current and prospective residents. Multifamily developers and managers who invest in aesthetic and functional upgrades often see improved tenant satisfaction, leading to higher retention.
2. Ability to Command Higher Rents
Upgraded interior finishes in units, including flooring and cabinetry, can justify higher rental prices. The cost of these improvements can be offset by increasing rent while keeping units relatively affordable.
3. Competitive Advantage in the Market
In markets with abundant new construction, older multifamily properties can remain competitive by updating their interiors. Model apartments that feature updated interior design finishes and modern furniture are more attractive to prospective residents. Overall, this strategy helps attract and retain tenants who might otherwise opt for newer developments.
4. Enhanced Property Value and Investment Appeal
Renovations not only increase rental income but also boost the overall value of the property. Investors are more inclined to invest in properties that demonstrate a commitment to maintenance and modernization, seeing them as lower-risk and more profitable in the long term.
'Updating your amenity spaces with new furniture, interior finishes, and accessories can significantly impact the profitability of your multifamily community. Can you afford NOT to invest in its future? Let's talk about what's possible.