MULTIFAMILY – RENO, NV
Repositioning an asset by improving
design and appeal is a work of art & science
Knowing and understanding your market is critical. With real estate, it is a time tested tale that one must understand their asset in order to best serve their resident community.
The Plan
All investments must start with a plan. For this asset, a Paul Revere designed Art Moderne 18 unit multifamily property on the Truckee river front, the challenge was to create an ambience of a water front destination. With views of the river from most of the units, it was primed for repositioning. The challenge was to renovate 100 year old units with it’s dated curb appeal, galvanized pipes, and weaker electrical supply. But the asset was in a location where if you build a better product, they would come.
Curb Appeal
This is the unseen profits. When you can draw in the potential renters and nearby residents, it can drastically reduce advertising and vacancy time. The tours are better leading to a higher conversion rate.
Kitchen
The kitchen is where most individuals investigate as eating is the center of living. But it is not only functional but a destination for the eyes to receive the style and decor of the entire habitacion.
Bathroom
Most residents relate the bathroom with the overall cleanliness of the home. If it’s dated, moldy, smelly, it leads to an instant turn-off which again leads to a more difficult time converting prospects. Moreover, plumbing costs are always the highest during a tenancy. It is best to deal with nuissance fixtures while increasing the design appeal.
Flooring
Carpet leads to more turn costs but also for residents, they prefer not to live on top of a surface that may have stains, mold, or a pre-existing stench. It is a great investment to change floors for better brightness, decor, and durability. When a turn is needed, it is a very simple mopping rather than ordering carpet cleaning.
The Work
Creating the value-add as soon as possible is important to obtain the highest return on investment given it is an Internal Rate of Return metric is correlated with speed of performance.
HOW DO WE COLLABORATE?
The Results
Repositioning is an endeavor that requires a team effort. But the rewards are multifaceted benefiting all participants. The owner’s asset increases in value due to it’s repositioned asset, improved financial performance, and ownership satisfaction. The community receives an elevated product in the marketplace. The property management has an easier time leasing and retaining tenants.
CONNECT
Revenue Increase
Rental increases typically result in a positive Return on Capital (ROC) analysis
Lower Vacancy
The amount of traffic from advertising will significantly increase with the new appeal
Quality Tenants
Typically we see better qualified tenants who also treat a new place with more care
Refinancing Opportunity
This all leads to the ability to refinance, potentially leading to an ability to recapture initial capital