By the time this is posted, the New Year will already be weeks old – and in that time, many personal resolutions will have been tossed, amended, and forgotten. That fresh start gusto is difficult to maintain unless you have the drive and a great reason to keep it going.
As much as the New Year is a time to reassess personal goals, it’s also a great time to do the same with real estate investments – including your goals for a specific property and looking at ways to increase its value. And because the added value will increase your return, property resolutions may be a whole lot more successful and easier to measure than the personal ones.
Here are some suggestions to get your CRE off on the right foot in 2019:
1. Is it time for a facelift?
Cosmetic changes to property generally come in two sizes: great and small. They can range from improved security measures or new exterior paint to a remodel of the lobby or a completely new facade. They can also be as simple as new landscape plantings and lighting, or even getting creative with local artists – and in a place like South Florida, these last three items can go a long way.
2. Gaining value through efficiency
In examining previous operating expenses, there may be a few areas where money can be saved. Two major ones that can be addressed are electric bills and water usage. Switching to energy-efficient bulbs and replacing windows could lower monthly electrical bills, while changing out flush valves on commercial toilets can mean water savings without replacing the fixtures. It’s also better for the environment, and this, in turn, is more attractive to the mindset of many of today’s tenants.
3. Sub-metering utilities
This third item goes hand-in-hand with number two. Most tenants understand that they will have to pay for utilities, and for many, the monthly total is divided up among all of the tenants. By installing a sub-metering platform, however, each tenant will have his or her own meters. This makes tenants responsible for managing their own utilities rather than an average by square footage based on the entire building – and this can be a huge selling point for prospective tenants who are looking to control costs.
4. Change the intended usage
Neighborhoods always seem to be changing, especially in fast-growing South Florida. What was once an industrial area becomes an arts center, and then that may transform again into retail and residential. If the neighborhood in which a property is located is becoming something other than for what it was originally zoned, then perhaps it might be time to get a zoning variance so the property can keep up with a changing location.
5. Rent to reflect improvements
The quickest way to raise value is to raise rents, but there really needs to be an asterisk next to this final suggestion. Before upping the rent, it’s important to look at the data on the property, as well as that of surrounding properties to discern whether or not your tenants are paying a market rate and if there is even the potential for a reasonable increase. A great way to make an increased rent more palatable for a tenant is to have it specifically reflect tangible improvements made to the property.
When coming up with property resolutions for the coming year, it’s important to remember that you’re not in this alone. The Morris Southeast Group team is skilled at not only property management but also help you devise ways to make your property achieve the most value.
For a free consultation or to learn more about our property investment opportunities and/or other services, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at firstname.lastname@example.org.