Multifamily Minute Reader Reflections: Renovation Priorities
Most of our subscribers said capital improvements, upgrades, and renovations were at least a moderate priority. Find out why it matters.
Start Your Application and Unlock the Power of Choice$5.6M offered by a Bank$1.2M offered by a Bank$2M offered by an Agency$1.4M offered by a Credit UnionClick Here to Get Quotes!Every apartment building needs upgrades, updates, and some renovation work at some point. Not every apartment building gets it (but most do).
How high of a priority are renovations and upgrades to your multifamily investment strategy? Last week, I asked 45,238 of you (full disclosure: That's all of my Multifamily Minute subscribers) this question.
Survey Results
Let's get straight to the results.
How important is investing in renovations/upgrades? | Percent of respondents |
|---|---|
High priority | 11% |
Moderate priority | 80% |
Low priority | 8% |
Not a priority | 1% |
The vast majority of respondents indicated that renovations are a moderate priority, meaning they plan capital improvements to keep their assets in good condition (even if it isn't necessarily their core business strategy, like the 11% of respondents who are clear value-add investors).
As vacancy rates starts to creep up across the country, investors can rarely afford to sit back and take an "if it isn't broken, don't fix it" approach. Keeping a community in great (note, I didn't say good) repair is a base requirement for maintaining your occupancy and cash flows — let alone for being able to market your vacant units effectively.
It's not just about your property's marketability, though. Investors who defer renovation and maintenance work for too long will often see maintenance costs substantially increase.
Think about in terms of a plumbing system. If you don't keep your pipes in good repair, you'll likely have leaks before long. While fixing a leak may not be as expensive as upgrading from galvanized steel to PEX or copper pipes, leaks aren't always easy to notice — and can lead to extremely costly mold and water damage issues. (Plus, it's hard to rent a unit when prospective renters have to step over a puddle in the living room.)
Capital expenditures — when done wisely and proactively — can improve how your building operates, which helps everyone from you to your residents.
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Our Previous Survey
Last week, we talked cash flow and appreciation — and which is more important to you as an investor. Both are critically important, of course, but check out our survey results to see what your fellow subscribers thought.