Despite the
current market conditions, opportunities to invest in a multifamily
apartment building in Los Angeles exist if you know where to look (and
who to talk to). Having a solid multifamily broker, commercial lender
and property management company on your team can aide your search
incredibly. This real estate team will provide you with market and
financial analysis, pre-qualification for funds and critical operations
insight into potential multifamily investment deals.
Once an apartment
building has been located, you will want to asses the potential value
that can be unlocked from it. Creating value in multifamily apartment
buildings in Los Angeles (or any other city for that matter) can be
accomplished by asking on question: "what about this building can I
change to make it better?" In other words, how can you increase the
income, decrease the expenses and/or increase curbside appeal and aesthetics? The
location of the property is very important, however it is not considered
a variable that can be changed in an effort to add value.
Of all the
variable components of a multifamily income property, we – as property managers
and investors - have identified 10 that have the greatest potential
value impact:
- Increase rental
rates. - Electrically
sub-meter the apartment building. - Add vending
services (Coin-op laundry, soft drink and snack machines). - TV service
providers: contact local TV companies and offer exclusive rights with
revenue sharing. - Satellite service
providers: contact local satellite TV companies and offer exclusive
rights with revenue sharing. - Cell service
providers: open your building's rooftop space for the installation of a
cell phone relay tower. - Own two or more
apartment buildings? Consolidate like services to achieve efficiencies. - Convert unused or
excess storage areas into rentable living units. - Install water
saving shower heads and low-flow faucet aerators in all units. - Have a tax attorney protest tax valuations to have them lowered.
Do you have additional ways to create value in your apartment
complexes? I would love to hear others experiences in nationwide
markets!
(PS – In forth coming blogs, we will explore each of these
variables in greater detail)
