How to Make Aging Units and Complexes Look New Again without Breaking Your Budget
Upgrading your multi-family housing complex from Class B to Class A can result in a sizable increase in rental income. Done smartly, by focusing on specific high value improvements, your long term ROI will be substantial.
Below, you will find a list of 8 targeted improvements you can make on your properties that will upgrade your rating and increase your curb appeal and tenant longevity. But first, a clarifying question:
What’s the Difference Between Class A and Class B Housing?
Broadly speaking, Class A multi-family housing complexes have:
- more amenities
- newer appliances and fixtures
- fewer maintenance issues
- low vacancy
- higher rents
These tend to be the most modern buildings that attract tenants who seek a higher standard of living and are willing to pay for conveniences and luxuries not typical in most complexes.
The good news is, you have control over almost all these attributes except the age of the building. But you can ‘renew’ certain features of your property so it feels new. And that’s the secret to upgrading from Class B to Class A housing – make it look and feel like new.
State Contractors can help you develop a plan to ensure your Class B property gets reclassified at a higher level.
Here are 8 improvements you can make to Class B multi-family housing complexes that will help upgrade your rating.
8 Multi-Family Housing Improvements for Upgrading Class B Ratings
1. Fix Your Maintenance Issues
One of the clearest indicators of a Class B complex is deferred maintenance. Class A buildings are new, which means they generally have fewer large maintenance problems.
To improve from Class B, you must make it a priority to address your backlog.
So if you’ve had a water intrusion problem, for instance, you need to bite the bullet, figure out the causes, and make the required renovations. Roof issues, gutter and drainage problems, new exterior paint – these sorts of things will likely keep you in a lower class, no matter what other improvements you make, because they’re a reminder that your building is aging and that problems are increasing.
2. Upgrade Your Kitchens
The two most scrutinized areas of your units are the kitchens and bathrooms. Thus, improving those two areas will earn you the highest ROI and provides the simplest path toward upgrading your Class B housing.
In your kitchens, upgrading from laminate to granite or stone counters will be a big win. New appliances also pack a big punch.
If you don’t already have them, built-in microwaves also increase the appeal, because they keeps counters clear and eliminate the need for new tenants to purchase one.
The pattern here is simple: new, new, new. New features can give your property and younger and more vibrant feel. Class A property tenants like new appliances and features, because they’re less likely to have any problems for many years, they’re spotlessly clean, and they look great.
3. Upgrade Your Bathrooms
As Mashvisor puts it, there are three areas to focus on for your bathroom renovations, in this order of importance:
- Functionality – if it doesn’t work, no one cares how it looks
- Appearance – new, new, new
- Capacity – more bathrooms allows you to command a higher rent
Drippy faucets, stained toilets, sinks that don’t have a nice smooth flow of water – these communicate age, questionable functionality, and a lower quality of living. Thus, installing new shower heads, new toilets, new sinks, and new counters are the highest ROI bathroom improvements you can make.
Beyond these primary items and their functionality, improving the appearance of bathrooms can impress prospective tenants. This includes upgrades such as new mirrors, fresh paint, new cabinets, and new tile or laminate in the shower.
Finally, a more costly upgrade, but one that also earns the highest boost in rent, is to add an additional bathroom. It’s not always possible, but if you can make this happen, try to upgrade 2-bed, 1-bath units to have two of each, or a 3-bed unit to have two or three bathrooms instead of one or two.
The flexibility of having multiple bathrooms is a major perk for tenants.
4. Increase In-Unit Storage Options
The more space-efficient your units appear, the more appealing. People love storage.
So look for ways to add built-in shelves, cabinets, or new small closets. Storage flexibility makes it easier for people to move in quickly without needing additional furniture.
5. Add Off-Street Parking
Depending on your current property layout, this may or may not be possible, and it might be prohibitively costly. But off-street parking provides a major convenience that busy families and professionals are looking for.
It’s easier to get groceries out without getting rained on, safer for unloading kids, and just makes life simpler.
One argument against parking in some cities is that transit can replace the need for it. But this defies the common experience of the majority of people. Even in places near transit, people who do have cars need a place to store them when not in use.
If a person owns a car but takes transit to work, where would they rather leave their unattended car sitting all week? In a secure parking area, or out in the open on a street, vulnerable to vandals and thousands of passing cars and bikes?
It’s a no-brainer. Every car-owner would choose the secure option.
If you have the ability to upgrade your lot to include parking, it might be a worthy investment. And if you can’t provide spots for all your tenants, you might be able to provide parking for half, and you can charge them a small fee to use it, recouping your investment faster. If you already have parking, consider upgrading to covered parking structures.
6. Upgrade Interior Lighting
Lighting matters. With no overhead lighting, tenants will need lamps and other options. Overhead lighting also simplifies life and just looks better.
If you have no overhead lighting, this is a more costly upgrade, but it may be well worth it. If you have existing overhead lighting, you might be able to improve its appearance with better fixtures or better lights. For instance, switch all your bulbs to LED. Your tenants won’t need to change a bulb for years.
7. Add Amenities
One of the primary differences between Class A and Class B housing is in the amenities. Here, you have extravagant flexibility, depending on your property’s specifics.
One modern amenity with growing popularity is the package delivery system. Package delivery volume and frequency has skyrocketed in the age of Amazon and online delivery. A package delivery system offers a secure way for people to receive their deliveries, and removes the need for you to manage this cumbersome task that often clutters up your front desk and common areas, and annoys your on-site staff.
Other amenities you can consider adding include:
- Fitness center
- Pet grooming and play area (indoors or outdoors)
- Aerobic classes
- Bike storage and maintenance
- Ride sharing service
- Outdoor recreation area with barbecues
- Child play area
- High end coffee bars
Many more options exist. But the more amenities you can add, the easier it will be to upgrade from Class B to Class A housing.
8. Enlarge and Modernize the Clubhouse
Besides their units, the clubhouse is the single most important part of a multifamily housing complex and the first impression you will make on prospective tenants.
Some of the many possible improvements include new floors, better lighting, more flexible seating and usage options, and an open concept floor plan. Your investment will go even further if you can connect your indoor clubhouse to an outdoor private area.
Any one of these 8 upgrades will reward you with more eyeballs and happier tenants. But if your goal is to upgrade from Class B to Class A housing, you’ll want to perform several of these improvements.
State Contractors can help you develop a smart plan that protects your capital and ensures a healthy long term ROI. After the plan is ready, we can also do the work. That’s our favorite part!
We’ve done over 2000 multifamily housing construction projects and upgrades – this is our specialty.
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