Lately as I drive and listen to the radio I hear more and more commercials about businesses reducing prices on items they are selling. One commercial that sticks out in my mind is regarding a local grocer, which has reduced prices as much as 20 percent on food items. This goes to show that in tough economic times businesses and people are looking for ways to save money. This frugality applies to apartment owners who are looking to save money on apartment renovations.
It is easy to forget that behind a paying tenant lies an apartment owner who is responsible for a mortgage, property taxes, property insurance and a litany of other expenses that must be paid on a monthly basis. Therefore, it is important for an owner to keep units occupied. One of the problems apartment owners face when a unit goes vacant is renovating or updating the unit so it shows well for new perspective tenants.
Even in tough economic times it is possible to do minor updates to a unit that can make the apartment more marketable. An owner should always paint a unit if it has been occupied for more than a couple years. Painting a unit does a tremendous amount to freshen up the appearance of the apartment at a minimal cost. If a unit has recently been painted it may be possible to simply patch any holes and paint over any marks on the walls and ceilings. An owner should keep in mind that the best color to use when painting is white. It is up to the owner to allow the tenant to paint walls, but at the time the tenant leaves all walls and ceilings should be returned to their original color.
After the painting is done, an owner should not place the old light and electrical outlet covers back on the walls, but instead replace them with new clean white covers. Electrical and outlet covers are inexpensive and a small detail that stand out on a clean, newly painted wall. One benefit is that these items are available in bulk, usually 10 packs, which normally run less than $15 a box.
Once the walls are painted and the outlet covers are replaced, the owner should look up at the light fixtures. As I have stated in multiple past articles, ceiling fans are a great way to cool an apartment along with adding light. Furthermore, a ceiling fan is an amenity that many tenants enjoy and look for in a unit once they have experienced the pleasure and low cost of a ceiling fan in comparison to using an air conditioner.
Again, the idea is to stay neutral and choose white ceiling fans. It is easy to get lost in ceiling fan options, but staying with a white ceiling fan will keep the room looking clean at an approximate cost of $70 a fan. Another item an owner should look at are the blinds. Older blinds should always be cleaned, but replaced if necessary after a tenant moves out. Painting, changing the outlet covers and installing ceiling fans will do a great deal to improve the look of a room, but there is still the floor that needs to be addressed.
When it comes to bedrooms, there are basically two options for flooring: carpet or hardwood. By hardwood flooring I am including laminate hardwood or any type of hardwood flooring-like product. Since the idea is to keep costs down, if carpet exists in the unit and is in good condition, have a professional come out and steam clean it. A quality professional can take many stains out of carpet, but an owner should not fool themselves if the carpet needs to be replaced. Remember tenants are looking at multiple units, so an owner should replace carpet if it needs to be replaced. Usually after five years of normal wear and tear it is time for new carpet.
If an owner is going to replace carpet, they should think about installing a hardwood floor product instead. Many hardwood laminate floors are extremely durable and have warranties that last 10 years or more. Some high quality laminate hardwood floors also come in at a price point near high-end carpet, making it an easy decision for apartment owners.
Once the walls have been painted, the light fixtures have been changed and the flooring has been dealt with an owner should change all old bathroom fixtures such as faucets, knobs, etc. These small details, once again, make a big difference.
They say the devil is in the details and that is true with the kitchen as much as it is with the bathroom. With $40 and a screwdriver, an owner can change out cabinet knobs and really add that extra something to an older kitchen. New knobs really add that “pop” to old cabinets that are still in good condition.
With the right perspective an owner can turnover an apartment within a couple of weeks at a relatively low cost. An apartment owner should remember that a quick apartment update is not going to yield the highest market rent, but it will help to get a tenant in the unit faster than no update at all. Sometimes a $40 set of new kitchen cabinet knobs can make the difference between renting a $1,500 apartment two weeks versus two months after it is vacant — the difference is significant in terms of a loss of income. An apartment owner should remember that they can be pennywise without being foolish when it comes to apartment unit updating.
Mike Heayn is a real estate investor and commercial loan consultant, specializing in multi-family lending. He can be emailed at firstname.lastname@example.org.