What Investors Can Do to Bring Value to Their Rental Communities
As investors, many of us buy properties with grandiose dreams of big returns and how this property will be a great addition to our portfolio.
A broker calls us and says he has a deal. We run the comps, complete the due diligence inspections, apply for a loan and make sure the area is not in decline.
We prepare for the transition and begin the on-boarding of the property just prior to closing so we don’t miss a beat in the process. We look at the rent roll to see where we are with each resident and decide whether to increase the rental rates.
The one thing that many investors never tend to consider is what else we can bring to the community that we are now a part of. How can we enhance the experience and quality of life of the residents living in one of our communities? Here are a few things to consider:
- Anonymous suggestion box
- Bike-friendly storage areas
- Barbecues in the open common areas
- After school programs for your residents’ children
- Create activities for the elderly to be involved with
- Have a small business office with internet access for people to come work in
- Have a meeting space for the residents to use
- Have an event space for the residents and your community to use
- Gyms can be good if they are maintained properly
- Offer classes for some of the residents like knitting, computer, cooking
- Child care (part time)
- Create a dog run for their dogs (this also minimizes waste on the property)
- Create a dog/pet wash room
- Community events such as local fair, petting zoos (many local retailers would chip in and help pay if they can have a booth or give items to your residents)
- Hold a community meeting so everyone feels like they have a voice in their community
Some of these may be a bit difficult to immediately implement in your community, but if you can take the time and make an effort, you will find that when you get a vacancy, it will rent faster.
Most likely, it will be from a referral from a resident who wants someone they know to enjoy the experience of living in your community, which will therefore, cut down your marketing expenses and improve your ROI.
As an example, Teruko Springs, a 73-unit multifamily property in Dallas, Texas, has implemented a free after school tutoring/mentoring program for its residents’ school-aged children.
The center has computers with educational software and provides a tutor four days a week. The center is also utilized by the adults in the community to conduct online job searches and complete online educational courses.
During the school year, the center provides after school snacks for the community’s students, and during the summer months breakfast and lunch are served through a local church group.
According to the manager Sheryl Garza, the results of having this facility and these programs for the community have been lower turnover, and when they do get a vacancy, they fill it quickly thanks to referrals from their residents. There’s less on-property crime, and residents who socialize more with one another are both more involved and concerned with their neighbors and their neighborhood.
Garza is a firm believer in having this offering in her community and believes that it not only helps her property maintain quality residents but also helps to improve the entire community due to the fact her residents take pride in the community they live in.
After seeing the positive effects of how these efforts have enhanced the properties they have been implemented, I am convinced that working in a few of the above options will create a higher ROI on your investment and make the assets easier to manage.
By offering amenities that show you as the landlord care about the residents, your residents will in turn be happier and less likely to leave. This can save a property substantial amounts in expenses by minimizing unit turns, and it also increases the overall income by not having to fill a vacancy.
The most basic of these options may not seem like much to you and me, but to your residents, it shows that you are making an effort to make their quality of life better.