4 Tips to Strategically Increase Rental Value
The goal of any property investor is to see their investment increase in value. Keeping in mind that nothing lasts forever (and apartment buildings are no exception to the rule) it is important to continually monitor preventative maintenance programs and look for strategic opportunities to keep the property competitive and attractive to current and prospective tenants.
Like any living thing, a building also needs care and upkeep. Along with the ever changing styles and new technologies – preventative maintenance along with renovation programs are especially important when competing with newly constructed condominiums and apartment buildings.
The Prestige apartment building owned by Globe Capital Management and proudly managed by Emerald Management & Realty Ltd. in Calgary, Alberta is a prime example of an inner city apartment building that has a great building structure and is located in a vibrant neighbourhood at 824 – 13th Avenue SW. With suite layouts consisting of one and two bedrooms ranging in size from 544 to 791 square feet, The Prestige showcases how effective and relevant it is to upgrade units to attract top market rents and quality tenants looking for more than just place to live, but a place to call home.
Here are 4 methods to improve the equity in your real estate investment and ensure you receive top rental rates:
1 – Focus on Kitchen and Bathroom Improvements
Kitchen and bathroom renovations almost always provide the biggest “wow” factor. Focus on improving kitchens, which are usually right off the entrances. Visually, the impact is dramatic and helps set the stage for the entire apartment. To maximize the impact, make sure to outfit these areas with new cabinets, modern finishes, upgraded lighting, quality porcelain features and ceramic tile details.
2 – Update Appliances
Does your rental property come with a dishwasher or washer and/or dryer? While it might be tempting to save some money and not provide these, if the building plumbing allows, popular tenant choice finds that you are typically better off if a full appliance package is part of the deal. Yes, it’s a little extra money, and yes, there’s always the possibility that something will happen to them, but they’re a big plus for residents – and the value of your property. Often today’s modern appliances are not only energy efficient but also small space compliant. They look smart and are an added benefit for the residents and the value of your investment.
3 – Flooring
Hardwood type flooring along with improved vinyl flooring continues to get top ratings for return on investment. Modernizing the color of existing wood flooring or replacing carpeting with vinyl, tile or a wood type product remains a popular choice from the standpoint of aesthetics, preferred choice, maintenance and durability
4 – Curb Appeal
Why? Because it is the first thing that people see and first impressions matter. Curb appeal and common areas provide a quick tip-off to prospective renters about what they can anticipate on the inside of the apartment.
Equally important to interior improvements is the quality of upgrades made to the exterior. This helps inspire customer confidence and is seen as a reflection of the interior condition. Well maintained landscaping, signage, amenities and common areas help a revenue property stand out from the competition.
While its hard to say which of the above improvements or combination thereof produce the better return on investment, it remains proven that tenants see value in newly renovated properties and are willing to pay market rents for them.
The rental market in Calgary remains competitive as we head into 2018 with an average vacancy rate of 9.6%. The importance of providing a quality home at a competitive price remains just as pertinent as it has been during the past two years that the city has struggled with a recession.
The initial result of the upgrades and renovation program at The Prestige has been positive in terms of increasing monthly rental rates, improving tenant retention and longevity of renters. While there are many variables impacting rents, experience has shown that injecting funds to improve properties will generate increased income and ensure properties are able to compete with other new rental communities and condominium-style rentals entering the market place.
 Canada Mortgage and Housing Corporation, Fall 2017
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