Renovations to Investment Properties Increase Value
After several years of minimal investment in capital expenses spending and property renovations, multifamily apartment operators and property managers are beginning to give the go ahead on property improvements. Most notably, major value-add investments are also likely to see an increase significantly in 2012 and 2013.
According to some, the most significant projects underway by remodeling professionals for the multifamily communities are painting and siding and roofing renovations.
Cap-ex is traditionally divided into two categories by the apartment industry: recurring and nonrecurring expenditures, often considered defensive and offensive spending, respectively, and are characterized by basic asset preservation versus return-focused projects intended to lift revenue.
Soon, however, offensive value-add projects are expected to take off as firms boosts their overall cap-ex expenditures.
Offensive opportunities in markets that have positive job growth expectations, positive absorption, and growing or recovering rents are quite likely, especially in the Washington, D.C., Northern Virginia and Maryland communities.
For apartment firms considering significant kitchen upgrades, they should be aware that the market is changing for up and coming renters. Stainless steel appliances and granite counter tops are not as sure-fire at drawing in tenants as they used to be. Mixing in a healthy dose of black-faced appliances and more sustainable surfacing is what the new generation is looking to see.
Give Elite Remodeling a call today for more information about getting the most out of your capital expenditures on your income properties this year.
The original story can be found at the Multifamily Executive Magazine.