There are some amazing ways in which you can increase revenue in multifamily real estate. The way to increase the value of a multifamily real estate is to either increase the revenue or decrease the expenses, which will affect the net operating Income. In this post we will discuss 13 amazing ways to increase revenue in multifamily real estate.
Multifamily real estate is one of the most lucrative real estate options today. A multifamily dwelling is a property complex comprising of multiple housing units. Each unit is structured as an independent property, but at the same time all the units can be collectively managed as a single property. This structure of multifamily real estate creates multiple earning ventures for the investor and the developer. These multiple earning ventures help to increase revenue in multifamily real estate dwelling.
The Most Popular Ways to Increase Revenue in Multifamily Real Estate
There are many ways to increase the revenue in multifamily real estate - some of the most popular strategies of revenue increase in multifamily real estate are as follows:
- Short-term Rentals – Rentals are the best way to earn through the multiple dwelling units in a multifamily real estate. A sure shot way to increase the rental revenue is by turning the rentals into short-term rentals. This allows the rents to be increased after every termination of the rental lease. With so many work-related migrations and a millennial demand for rentals, short-term rentals are a most successful way to increase revenue in multifamily real estate.
- Facilities and Amenities – All multifamily dwellings come with certain facilities and utilities that are offered to the residents. These amenities and facilities are recreational centres like clubs, reading rooms, swimming pool, gym, play area, sports area and so on and so forth. Charging a monthly rental for these facilities and amenities, and adding it to the maintenance cost, opens a doorway to increasing the revenue in multifamily real estate.
- In-house Market or Commercial Centres- Many multifamily real estate offer in-house market centres for daily basic necessities. These include grocery store, salons, pharmaceutical outlet, vegetable shop, stationary etc. Some even offer restaurants. A good idea is to lease out these commercial outlets or shops to interested vendors. To make it profitable, these market centres can be structured in a way that they become independent commercial complexes attached to the multifamily property complex, and hence can be opened to public, wherein even the non-residents can use the market. This allows for greater footfall and allows the developer to annually increase the lease amount of the commercial centres and open it to more profitable tenders. This is a great way to increase revenue in multifamily real estate.
- Charge on Parking Area – Most families today possess a car. Excluding the car parking from the maintenance cost and charging a separate fee for the car parking is not only a great way to generate and increase revenue in multifamily dwelling, but it is also a practical option that works to everyone’s advantage. Many families possess two or more cars, and some are single car families. And some do not possess any car. Especially young students or couples often do not possess a car. Hence it is only fair that the parking space be made into a separate chargeable facility that the residents pay for as per their parking requirement. Also, this fee may be increased in the case of 2nd or 3rd parking requirement of a resident. This is a guaranteed way to increase the revenue in multifamily real estate.
- Cable and Wi-Fi Connectivity – Internet is another necessary requirement that modern families cannot do without. Multifamily real estate can earn by leasing out tenders for cable and internet connectivity. Also, the cable and the internet connection may be made chargeable. This too is a successful way of increasing revenue in multifamily real estate.
- Security Deposit – Another way of increasing the revenues in multifamily real estate is to levy security charges for tenants moving into the complex, as a security deposit against damages. A nominal amount may be deducted as compulsory security, and the rest returned when the tenant leaves.
- Background Security Check – With a high rate of crime, and to protect assets, and maintain the good will of the multifamily property, it is important to have the right profile moving into the complex. Hence a background check of the tenants is a necessity. The multifamily real estate may offer the owner to do a background on the tenant, and outsource the verification services, and earn on it.
- Utility Charges – Utilities like water, electricity, cooking gas, garbage disposal, all may be made individually chargeable and charged on the tenant or resident account.
- Late Fee Charges – This is a charge that can be levied as a fine on all types of late payment, specially so for the late rentals. This is one of the way to increase revenue in multifamily but one need to be careful of the overall customer experience.
- Storage or Warehouse Spaces – This is another great way to earn and increase revenue in multifamily real estate. The multifamily property complex may offer certain general spaces as storage spaces and make it chargeable.
- Community Centre and Community Guest House – Everyone receives house guests. This is specially so in case of big family occasions. A great way to generate and increase revenue in multifamily property is to take out rooms and banquet hall to be booked for celebrations and for guests.
- Pet Facility Charges – This is a unique way of increasing the revenues in multifamily property. For pet owners, their pets are their family. It is a great idea to create walking and playing area for pets and make it chargeable. This is a sure way to increase revenue in multifamily real estate.
- Vendor and Service Providers – Outsourcing certain amenities and utility management to vendors and service providers is a great way to take the management stress away from the developer, and at the same time help generate and increase revenues on the property. The services of the vendors and service providers may be reviewed periodically, and the tenders can be opened at new increased rates intermittently. This helps the services to remain good and updated, the competition to be healthy, and it increases the revenue in multifamily real estate without creating management stress for the developer.
Some services that can be outsourced to vendors can be:
- Insurance providers
- Accounting and Ledger
- Technology and Software Providers
- Internet Providers
- Garbage Disposal
- Pest Control Providers
- Property Management
- Leasing and renting services through Property agents
- Utility Service Providers like
- Painting, masonry flooring, carpentry
- Market Management.
You might also like to read the benefits of multifamily investment.
An insightful tip on increasing revenue in multifamily real estate
There are multitudes of ways to increase the revenue in multifamily real estate property. These above listed are just to name a few.
The idea is to offer facilities, amenities, utilities, recreational options and make them chargeable. Also, it is imperative to ensure that all areas and facilities in the multifamily dwelling are in good condition, well maintained and efficiently functional. If the Multifamily property is a well-maintained property, then the residents or the tenants do not cringe from paying extra charges for the upkeep of the property, and for the use of the various utilities and facilities.
Key factors influencing revenue increase in multifamily real estate
Location is of utmost importance. The Location of the multifamily real estate directly impacts the value of the property, and its popularity. This in turn decides the revenue rates on the rentals and other services. The better the location, the higher the property value and consequently the better the price the Multifamily real estate commands on all fronts. If the multifamily property is in an upscale location, the property becomes more desirable and attracts a better monetary profile, thereby creating more avenues for increasing revenues in multifamily real estate.
It is always a good strategy to provide amenities and facilities that make the multifamily real estate a desirable asset for the renter or the buyer.
Today, when travel time and work obligations take up so much of time, providing facilities to make day-to-day home and personal management easy for the resident, helps to generate and increase revenue on the multifamily dwelling. People have no problems paying a little extra if it goes a long way in bringing ease of existence and better time management for them.
Good amenities and facilities help to upgrade the value of the multifamily property, making it possible for the developer to levy higher charges for their property and services. Amenities that make a multifamily property better its ranks are:
- Recreational Centres
- Water Recreation like Swimming Pool
- Community Clubs
- Sports and Play Area
- Lawns and Open sitting areas
- Utility management
- Market Complex
Maintenance of a property is at the core of the attractiveness of a property. What use is it to provide amazing facilities but not keep it maintained? A multifamily property that is in shambles, with dirty environment, dysfunctional facilities, with unused and accident-prone spaces, is definitely not a property where anyone would like to move in. How well-maintained the property is, directly impacts the property’s image and high valuation, thereby deciding upon the price rates that help the developer increase the revenue on the multifamily real estate property.
Outsourcing the services to good and professional vendors automatically helps in ensuring good property management and maintenance of the property. It ensures that the resident issues are promptly and successfully addressed and attended to, thereby keeping the residents happy and open to investing in the property, through the charges they pay on various services. The goodwill and efficiency of the vendors directly impacts the image of the multifamily real estate, which in turn establishes the value of the property in the market, and its attractiveness. Everyone wants to live in good surroundings and wants value for their money.
- Budget Allocation
Finance is at the core of any successful venture. A good and well thought of Budget allocation helps to manage the multifamily property better. And it is a good strategy to have an accurate assessment of income, profit, and investment. It is a great thumb rule to take off 10% from the expected rents. This helps to balance out the deficit during unexpected vacancies, market declines and various other financial deficit situations.
- Qualified Professionals
Qualified professionals are of utmost value and importance when it comes to the successful execution of plans, management issues, providing services and in setting up an efficient organisation. Qualified professionals are the face of a multifamily property. They are the first direct contact that prospective renters and residents have with the multifamily property administration. Their efficiency and their conduct add positive value to the multifamily dwelling property image and goes a long way in adding value to the property, thereby justifying the revenue increase on all levied charges. Qualified professionals are critical to strategies that help increase the revenue in multifamily real estate.
- Property Improvement
Property improvement is an integral part of property maintenance. All property degenerates over time and demands basic repair and face uplift. Timely property improvement steps go a long way in not only saving costs on major damage that may occur, but it also helps in keeping the multifamily property up and shining, adding to its value, attracting more investors, vendors, renters, buyers, and thereby justifying all the developer strategies to increase revenue in multifamily real estate.
- Technological Support
Technology is an integral part of modern lifestyle. Technologically supported multifamily property helps in creating smart spaces that are automated, safe, convenient, and efficient. They improve sustainability and make the space more functional. Technological support helps to detect mechanical faults to equipment, malfunction, suspicious tenant, or resident activities, and hence allows the issue to be addressed before it becomes a full-blown problem.
Simple technological support like back-up electricity, automated elevators, intercom, visitor confirmation and detection at the entrance, CCTV cameras in public spaces, email support, in-house TV coverage etc, all help in making the multifamily property a well-managed, efficient, and smart space, ready for the smart millennials and baby boomers. It turns the multifamily dwelling into a smart property in a technologically smart world. This adds to the value of the multifamily property manifold and opens multiple ways to increase revenue in multifamily real estate property.
- Environment Friendly Smart Spaces
Environment is a major concern for the sustenance of the planet. Smart living is all about creating sustainable solutions that are environment friendly and reduce the environmental footprint in the society. A good technological support aligned with green earth supported technology helps in making the Multifamily real estate property minimise its environmental footprint and reduce waste at multiple levels. It also leads to a major reduction in the cost of lighting, cooling, and heating etc and makes the property budget friendly for the prospective renter, owner, or investor. Rain harvesting, recycling of waste, all are integral to creating smart spaces for a smart world.These ideas are great ways to increase revenue in multifamily rea estate in long run.
Last but not the least is the aesthetics of a visually beautiful design and beautifully landscaped property layout. We all like to live in beautiful surroundings. And nature is integral to the holistic well-being of all. Hence the design and lay-out of the Multifamily real estate adds to the value and attractiveness of the property. Adding green spaces, gardens and lawns is a great value addition to the multifamily real estate property and creates new revenue generation platforms for the developer.
There are innumerable ways of revenue increase in multifamily real estate property. However, it all boils down to one fact and that is that people do not have any issues spending extra cash. The developer only must be committed to providing a smart, environment friendly, budget friendly living solution, that is efficiently and professionally managed, and aligned to the smart and technologically supported green earth solutions of the new modern world.
Hope you enjoyed this post on the ways to increase revenue in multifamily real estate, let me know what you think in the comment section below.
You should also explore below external contents on the ways to increase revenue in multifamily real estate:
- 33 Ways to Generate More Property Income - multifamilyinsiders.com
- How to Increase the Net Operating Income of a Rental Property - realestateinvesting.org
- Five Non-traditional Ways to Increase Revenue for Your Multifamily Property - forbes.com
- 30+ Ways to Create Revenue in Your Multifamily Property - theresabradleybanta.com
- 15 Ways to Increase Revenue in Your Multifamily Property - jakeandgino.com