Keeping an older, smaller residential apartment building updated is essential for it to remain competitive in its niche. When budgets and square footage don’t permit the array of bells and whistles that bigger, fancier buildings offer—kitchens with chef-style equipment, huge walk-in closets, and some type of outdoor living space—you can still take other steps to attract attention and new residents.
Today, renters value an affordable monthly lease and clean, safe unit in a location near mass transportation and shopping. Additionally, they know that many hot trends can’t be duplicated in their units. So it makes sense to focus your attention on a few noteworthy improvements that make a good first impression, and to make improvements between tenants. Ultimately, this will allow you to spread out the costs over time.
But, which in-unit changes to undertake first? According to Doug Miller, president of SatisFacts Research, a Baltimore-based company that conducts customer satisfaction surveys for the apartment industry to boost satisfaction and retention, there are a variety of ways to answer this question. In one survey, SatisFacts asked residents why they weren’t “very likely” to renew. Respondents cited unit washer/dryers and kitchen appliances and cabinets, but didn’t provide more details.
RadPad, a mobile rental marketplace that has listings nationwide, asks renters what they want most, but its data also reveals very different responses by locale. In one survey, for example, it found that renters in Los Angeles put a refrigerator as their fourth most important criteria while those in other markets scarcely mentioned that appliance.
So, what’s your best strategy? Glean clues by checking out what changes other apartment buildings with similar size units and at similar price points in your zip code are making. Read trade publications for national trends that may become prevalent in your area. And survey current and former tenants about their detailed likes and dislikes. Here are eight changes worth considering, according to several real estate experts with their pulse on the multi-family market:
- Cleanliness. Diana Pittro, executive vice president of RMK Management Corp. in Chicago, which renovates one to two buildings a year, places a clean appearance at the top of most renters’ wish lists. “Nobody wants to walk into a unit that doesn’t look or smell fresh. You’d be surprised how many places I’ve seen that don’t present well. You can’t take back a bad first impression,” she says. Moreover, if potential renters don’t think a unit is clean, they may decide the entire building isn’t well cared for, says Benjamin Benalloul, principal and co-founder of RLTY NYC, a real estate agency.
- Kitchen and bathroom fixes. While a totally gutted kitchen and bathroom may not be economically feasible, you can make changes in both rooms that provide significant visual and functional improvements. Mark Nusbaum, a partner in Wellington Realty, a property development firm in Dallas, considers many improvements in these rooms a key value-added component.
- Kitchen appliances. Pittro touts the advantage of sleek new appliances and fixtures in the same color palette, even if not from the same manufacturer. For a luxury building, that might mean stainless steel appliances, while for a less expensive building it could be less costly white or black. Tenants also like the latest technology such as a refrigerator with water and ice-cube maker. Brendan Aguayo, senior vice president and managing director at Terra Development Marketing/Halstead Property, a consulting firm for developers in New York, cites a microwave and dishwasher as important to include, even if it means scaling back on the size of a range and refrigerator. Making selections from a manufacturer’s top line is also more important than opting for the most high-end brands, Pittro says.
- Kitchen countertops. Good durable counter tops without scratches and dings are important. Granite still holds wide appeal, particularly for more affordable units while buildings with bigger budgets now favor quartz, which is considered equally practical but offers the advantages of being more novel and having lighter palettes and less busy patterns. Whatever choice you make have it reflect a similar quality to other finishes rather than be much more up- or downscale, says Benalloul.
- Bathroom walls and floors. Bigger tiles (6-by-8 inch bath tiles, for example) are considered more current. Porcelain tile is replacing ceramic as a favorite because it’s highly durable and able to mimic other materials such as marble and even wood.
- Cabinet choices. New cabinets can make a huge favorable impression and those becoming front runners today have little or no embellishment on the fronts for a more modern aesthetic and are finished in lighter colors, from white to off-white, beige, and even pale gray. They also are paired with sleeker knobs and pulls, says Pittro. For variety and when budgets permit, some buildings outfit larger kitchens with two shades of cabinets, placing the darker ones beneath countertops and sometimes adding glass fronts to upper units. Good storage remains a priority, especially as square footage of newer units is downsized. When space allows in a kitchen, include a pantry-style cabinet with pull-out shelves and cabinets below the countertops with slide-out drawers that are easier to access than cabinets. In a bathroom, pick medicine cabinets and vanities with ample storage.
- In-unit laundry equipment. The convenience of having individual equipment, even if smaller and stacked, is considered a huge plus if plumbing permits. Making this improvement can allow you to tack on an average of $40 a month to a lease, Pittro says. For those buildings where there isn’t room, new equipment in a clean, safe location (such as the basement) is the next best—and important—option.
- Flooring. Hardwood floors—either real wood, laminate, or porcelain tile—have advantages over wall-to-wall carpeting, and can help justify higher rents, says Nusbaum. When it comes to the bedroom, Aguayo says wood is also preferable, though others prefer the warmth of carpet underfoot.
- Natural and artificial light. In newer buildings, bigger windows, sometimes even almost floor to ceiling, are the new style. In older buildings, where it’s probably impossible (and costly) to change window dimensions, install the best insulated windows you can afford, and include at least one light fixture in every room. As for styling the fixtures, Pittro favors a pendant and even slimmed-down track lighting to recessed cans to give a ceiling a cleaner, more modern look. Install dimmer switches whenever possible.
- Good closets. With tight closet space in older buildings and new buildings being downsized, having sufficient storage throughout is a challenging, yet important feature. “Most tenants would rather give up space for a chair or two than space in a closet,” Pittro says. While those in mid-priced and even some upscale units don’t expect their closets to be fitted with elaborate shelving systems, they like having some wire systems as well as painted closet interiors. “It helps make the closet look cleaner and better maintained,” Pittro says.
- Color palettes. Color forecasters may predict different trendy hues annually. Pantone’s “it” color this year was “Marsala.” But such predictions are more for accents and homeowners who have the luxury of changing paint colors more freely. For rental units, go with neutral tones like white,off-white, cream, and pale gray, but choose the exact shade to work with the color of the flooring so it pops, Pittro says. Also, factor in the amount of light in a room and choose a color that complements it, Benalloul says.
- Safety. Safety remains a top concern, with good lighting essential for the parking lot and the corridors. A controlled access system, like an intercom, is also a safety plus, Miller says.
Finally, as Miller explains, the guiding principle of any improvements you make should be to help your tenants take pride in where they live and want to stay put. What are some of the ways you’ve made minor improvements to your properties to make residents more comfortable? Share it with us in the comments!Read more on Maintenance & Improvements