Multifamily Property Repositioning: Here’s All That You Need to Know
Asset repositioning could be an ideal way to add value to a property and increase its rental price. In addition to value addition, a carefully planned multifamily asset repositioning process also enables the owner to effectively manage the property and control the expenses. If you too are thinking along the lines of introducing changes in the multifamily unit that would eventually lead to higher profit, take services of an asset repositioning specialist. Before you get started, it is better to know the basics of repositioning so that you would make calculated decisions. The blog post will briefly guide you about repositioning of multifamily property and its pros and cons. Read on.
Three Aspects of Multifamily Asset Repositioning
A multifamily property repositioning project could comprise one or all of the following aspects:
— Operational Changes
You can make operational changes, which means bringing new people into management team to give a different direction to how the property functions. Start with hiring a good property manager, finding new tenants, setting policies for timely payment of monthly rent, increasing the occupancy percentage, and adding more sources of revenue such as laundry, gym etc. in the property.
— Aesthetic Makeover
An aesthetic makeover involves improving the curb appeal of the property by landscaping, changing signage, upgrading interiors of living units, painting exterior areas and walls of the property and similar improvements. It is the easiest of the three options and would make a huge impact on how tenants would look at the property.
— Structural Renovation
Renovating the entire structure is the most expensive and time-consuming option, yet promises the highest return. You will have to replace the roof and mechanical systems, change floor plan layout, and add clubhouse, pool etc. to increase the value of the multifamily property.
Pros and Cons of Asset Repositioning
The property will attract tenants who are willing to pay more rent
Increased occupancy and less rent delinquency would make property management easy
The value of the property will be increased immediately
The high cost is the only major disadvantage of multifamily asset repositioning. If you opt for structural improvement, it would mean a significant investment and vacant units for several months.
If you want to add significant value to a multifamily property, there could be no better option than asset repositioning. Make sure that you hire an experienced repositioning specialist for the job to ensure that the money is spent on the right things and defined goals are accomplished.