Adding value to multifamily property without adding staggering cost is a real trick. Investing in the right amenity upgrades can make the difference between struggling to rent out vs. setting up a waiting list for a very in-demand apartment development.
Brokers and property managers are constantly taking the pulse of the renting public, working their relationships with tenants into a deep understanding of what amenities are in demand and what’s ho-hum for the market. They’ve got the human intelligence that needs to be put together with the numbers that add up to an amenity paroject that makes all the difference. When market knowledge meets smart investing, the value-add is underway.
Low Tech Can Mean High Profit
Catching my eye this morning is this month’s post from Tom Brophy and Royce Monroe of ABI Multifamily, Having noticed that high-tech, millennial-pleasing amenities such as Wi-Fi come at a high cost, the writers aim instead at lower-tech projects that bring substance and lifestyle together — as well as the odd shipping container.
Setting out terms of the projects first, the idea is to use $10,000 to best effect in creating multifamily amenities. The two projects: onsite storage units in a shipping container and a dog park.
Enter the highly-stylized, adaptive re-use, multi-purpose shipping container! You’ve probably read that developers have repurposed shipping containers into housing, but what about storage? It’s portable, therefore no building permits, it’s structurally sound and better yet, you can store it on-site. There are quite a few companies out there which will pre-fabricate and drop-ship your storage facility to your location although it can be pricey.
For those a bit more enterprising and want to customize the storage units, below you will find a line-item breakdown to create five (5) separate storage units out of one shipping container. Prices include labor:
20’ Container + Drop Ship: $3,000
(5) Roll-up Doors: $3,000
Internal Dividers/Solar Electric w Backup: $1,000
Paint (local artist to add value): $2,000
Gross Potential Rent per Unit: $65/unit (similarly sized off-site storage units rent for $56/unit/month)
Gross Potential Rent per Month: $325
Gross Potential Rent per Year: $3,900
Return on Investment (ROI)
Number of Years: 2.25 years
Value Increase (based on 6% CAP): $65,000
The Dog Park
Now that the creative juices are flowing, check out the second $10K project, a dog park, complete with cost and appreciation breakdown, at this link.
Standard disclaimer: Take nothing you read here at The Source as legal, accounting, or development advice!
(Photo credit: Wikipedia)