Most people are familiar with Return on Investment (ROI), but a lot of people are not familiar with Net Operating Income (NOI). NOI is defined as the difference between total revenue and total operational costs. This is correlated with being the key determinant of the health of a property in the multifamily industry. NOI is experiencing an upward trend across the industry because of the strong fundamentals in demand and pricing. In short, more NOI means more cash that is readily available for renovations and capital improvement projects. This information translates into more perceived value in the eyes of current and potential residents.
The exterior of the apartment building is not just the first impression for potential residents but it’s also the first element that welcomes current residents home. The outdoors surrounding your community needs to have the landscaping looking fresh and well-maintained. Having functional outdoor communal areas will also help keep potential tenants interested in your property. Invest in picnic areas, a garden area, or even a small dog park for your resident furry friends. Renovating your current curb appeal is a great way to improve your current residents’ and potential residents’ admiration of your apartment complex.
Did you know that adding some irresistible amenities to your units and apartment complex can yield an additional $77 per month in rental income? Consider placing “smart” technology that can improve energy efficiency, add additional security, or add USB receptacles throughout the units. Larger closets (walk-in closets), deluxe kitchens, and bathroom fixtures are great additions to bring in more interest around your complex and its variety of units. Currently, there has been an influx of residents requesting preferential parking, pet-friendly spaces, and pack solutions. These are great additions for you to look into as you look at increasing the happiness and quality of life in your apartment complex.
It’s important to keep in mind that you don’t need to break the bank on the improvements to boost your NOI. In-unit washers and dryers, updated flooring, new appliances, and better lighting are affordable and impactful upgrades for your units. Pursuing these particular upgrades will lead to an increase in resident demand at a higher rental rate. As an example, 49% of residents are willing to pay up to $75 more each month for hardwood floors. Look into adding more common areas for your residents to mingle, it’s easy, economical and your residents will love it!
Interested in renovating your apartment complex to boost your NOI? Contact Alterra Multifamily Renovations through our website or call 615-438-5734 for immediate assistance.